May 2025 Crypto Market Analysis Report

1. Macroeconomic Environment

In May 2025, the U.S. economy is at a critical turning point. Inflation continues to decline, the labor market remains resilient, monetary policy enters a wait-and-see period, and trade policies bring new uncertainties. On the fiscal side, operations similar to quantitative easing and adjustments in debt ratings affect market expectations. Against this backdrop, the crypto market demonstrates strong resilience, and the structure of global risk assets may undergo a new round of reevaluation.

inflation trend

The year-on-year CPI in April dropped to 2.3%, the lowest since February 2021, indicating that price pressures are continuing to ease. The U.S. Treasury has initiated a $40 billion Treasury bond repurchase operation, which the market views as a "quasi-QE" measure aimed at releasing liquidity and refinancing at low interest rates. This has become an important force supporting the prices of risk assets.

labor market

In April, non-farm employment increased by 177,000, exceeding expectations and reflecting the resilience of the job market. This provides a basis for the Federal Reserve to maintain a wait-and-see approach to policy. Strong employment alleviates recession concerns and also weakens the possibility of multiple unexpected rate cuts within the year.

monetary policy dynamics

The Federal Reserve Chairman stated that they will reassess the current monetary policy framework and may abandon the "average inflation targeting" mechanism. Frequent supply shocks are changing the traditional policy environment, prompting a greater focus on structural inflation risks. In the future, the period of maintaining high interest rates may be extended, and they may even control the rise of long-term interest rates through balance sheet expansion. Policies will be more flexible, and there is no urgency for preemptive rate cuts in the short term.

Trade Policy and Global Economy

In early May, it was announced that tariffs would be imposed on EU goods. Although this was later postponed, it has already impacted market sentiment. The People's Bank of China implemented a "reserve requirement ratio cut + interest rate cut" combination policy, releasing 1 trillion yuan in liquidity, which is seen as the start of a new round of easing cycle. Market expectations for improvement in China-US relations have heated up, and risk appetite has increased.

2. Crypto Market Overview

Trading Volume Analysis

As of May 27, the average daily trading volume in the market was $117.4 billion, an increase of 15.8% compared to the previous period. During the two phases from May 6 to 12 and from May 21 to 22, the trading volume surged significantly, with a single day exceeding $180 billion. During this period, the price of BTC broke through $100,000 and $110,000, and market bullish sentiment was significantly noticeable.

market capitalization change

As of May 27, the total market capitalization of cryptocurrencies reached $3.56 trillion, an increase of 17.0% compared to last month. BTC's market share is 62.6%, and ETH's market share is 9.6%, with the latter increasing by 29.7% compared to the previous period. Since May 8, after the total market capitalization broke through $3.3 trillion, it has been steadily rising, showing a clear trend of structural repair in the market.

emerging popular tokens

In the popular tokens launched in May, projects with VC backgrounds dominate, including Layer 2 projects SOPH and B2. Stablecoin USD1 and its associated projects such as B, Lista, Staketone, etc. are also receiving widespread attention.

3. On-chain Data Analysis

BTC, ETH ETF capital flow

In May, the net inflow of BTC ETFs was $5.77 billion. The price of BTC rose from $94,212 to $108,969, an increase of 13.5%. The net inflow of ETH ETFs was $317 million, and the price of ETH rose from $1,794 to $2,635, an increase of 31.9%.

stablecoin market changes

In May, the total circulation of stablecoins increased by approximately $7.28 billion, mainly driven by the growth of USDT, USDE, and DAI.

4. Mainstream Cryptocurrency Price Analysis

BTC price trend

BTC is trying to maintain above $109,588, showing buying interest during pullbacks. It has risen for seven consecutive weeks, and if it continues into the eighth week, it will pave the way for further increases. Institutional investors continue to inject funds into BTC ETP, with an inflow of $2.9 billion recorded last week.

ETH price trend

ETH rebounded from the 20-day EMA ($2,425) on May 25, indicating strong demand at lower levels. Bulls are trying to break through the $2,738 resistance, and if successful, it could rise to $3,000.

SOL price trend

Solana found support at the 20-day EMA ($169), and market sentiment is positive. Bulls will attempt to break the $188 resistance again, and if successful, it could rise to the $210-$220 range.

5. Hot Events

USD1 ecological development

In mid-May, with BTC reaching new highs and Binance's launch, the popularity of USD1 soared. As of the 28th, USD1's market capitalization surpassed 2.1 billion USD, making it the seventh largest stablecoin. Its core advantage lies in being issued by WLFI, led by the Trump family, making it the first stablecoin project endorsed by a president.

The rise of the Believe platform

The core token of the Believe platform, Launchcoin, has surged significantly this month, with its market value close to $310 million at one point. The platform focuses on the concept of "social assetization," allowing users to automatically trigger token issuance by posting on the X platform. However, after the overly supported token YAPPER was launched, it plummeted, raising doubts within the community.

6. Future Outlook

Progress of the Stablecoin Bill

The "GENIUS Act" has entered the revision process and is expected to complete legislation by Q4 2024. The bill stipulates issuance qualifications, reserve requirements, compliance obligations, etc., aiming to strengthen the international position of dollar-pegged stablecoins.

Ethereum ETF pledge approval

The SEC has postponed its decision on the Ethereum ETF staking until June 1st. In contrast, Hong Kong has approved some Ethereum ETF staking. The market expects that US regulators will soon reach a framework for the relevant mechanism, advancing the final approval of the Ethereum spot ETF.