Global Macro Review of the First Half of 2025: New Landscape of the Crypto Market under the Reconstruction of the Dollar System

1. Summary

In the first half of 2025, the global macro environment continues to be highly uncertain. The Federal Reserve has paused interest rate cuts multiple times, reflecting a shift into a wait-and-see tug-of-war phase in monetary policy, while the Trump administration's increase in tariffs and escalation of geopolitical conflicts further tears apart the global risk appetite structure. We will approach from five major macro dimensions, combining on-chain data and financial models to systematically assess the opportunities and risks in the cryptocurrency market for the second half of the year, and propose three core strategy recommendations covering Bitcoin, stablecoin ecosystems, and the DeFi derivatives track.

2. Review of the Global Macroeconomic Environment (First Half of 2025)

In the first half of 2025, the global macroeconomic landscape continues to exhibit multiple uncertainties that have characterized the end of 2024. Under the intertwining of various factors such as sluggish growth, sticky inflation, unclear monetary policy prospects from the Federal Reserve, and escalating geopolitical tensions, there is a significant contraction in global risk appetite. The dominant logic of macroeconomics and monetary policy has gradually evolved from "inflation control" to "signal games" and "expectation management." The cryptocurrency market, as a front-line field for global liquidity changes, also shows typical synchronous fluctuations in this complex environment.

First of all, looking back at the Federal Reserve's policy path, there was a consensus in the market at the beginning of 2025 that there would be "three interest rate cuts within the year," especially against the backdrop of a significant decline in the month-on-month growth rate of the PCE in the fourth quarter of 2024. The market generally expected that 2025 would usher in the beginning of a loose monetary cycle under "steady growth + moderate inflation." However, this optimistic expectation was soon met with a reality check during the FOMC meeting in March 2025. At that time, although the Federal Reserve stood pat, the post-meeting statement emphasized that "inflation is far from reaching the target" and warned that the labor market remains tight. Subsequently, the CPI exceeded expectations in April and May with year-on-year increases, and the core PCE year-on-year growth rate has consistently remained above 3%, reflecting that "sticky inflation" has not dissipated as the market expected. The structural causes of inflation have not fundamentally changed.

Faced with renewed pressure from rising inflation, the Federal Reserve once again chose to "pause interest rate cuts" at the June meeting, and revised down the expected number of rate cuts for the entire year of 2025 through the dot plot, from three adjustments at the beginning of the year to two. The year-end expectation for the federal funds rate remains above 4.9%. More critically, Powell hinted at the press conference that the Fed has entered a "data-dependent + watchful waiting" phase, rather than the previously interpreted "confirmation period of a loosening cycle" by the market. This marks a shift in monetary policy from "directional" guidance to "timing" management, significantly increasing the uncertainty of the policy path.

On the other hand, the first half of 2025 also shows a phenomenon of "increasing divergence" between fiscal policy and monetary policy. As the Trump administration accelerates the promotion of the "strong dollar + strong border" strategic combination, the U.S. Treasury announced in mid-May that it would "optimize the debt structure" through various financial means, including promoting the compliance legislative process for stablecoins, attempting to leverage Web3 and fintech products to spill over dollar assets, and achieve liquidity injection without significantly expanding the balance sheet. This series of fiscal-driven measures to stabilize growth is clearly decoupled from the Federal Reserve's monetary policy direction of "maintaining high interest rates to curb inflation," making market expectation management increasingly complex.

The tariff policy of the Trump administration has also become one of the dominant variables driving global market volatility in the first half of the year. Since mid-April, the United States has gradually imposed a new round of tariffs ranging from 30% to 50% on Chinese high-tech products, electric vehicles, and clean energy equipment, threatening to expand the scope further. These measures are not merely trade retaliation; more importantly, they are aimed at creating inflationary pressure through "imported inflation" to force the Federal Reserve to cut interest rates. Against this backdrop, the contradiction between the stability of the dollar's credit and the interest rate anchor has been brought to the forefront. Some market participants have begun to question whether the Federal Reserve still possesses independence, leading to a repricing of long-term U.S. Treasury yields. The yield on the 10-year U.S. Treasury bond once surged to 4.78%, while the yield spread between the 2-year and 10-year bonds turned negative again in June, raising recession expectations once more.

At the same time, the ongoing escalation of geopolitical tensions has had a substantial impact on market sentiment. Ukraine successfully destroyed the Russian strategic bomber TU-160 in early June, triggering a high-intensity rhetorical exchange between NATO and Russia; meanwhile, in the Middle East, key Saudi oil infrastructure was reportedly attacked by Houthi forces at the end of May, leading to a deterioration in crude oil supply expectations, with Brent crude oil prices surpassing $130, reaching a new high since 2022. Unlike the market response in 2022, this round of geopolitical events has not driven a simultaneous rise in Bitcoin and Ethereum; instead, it has prompted a significant influx of safe-haven funds into gold and short-term U.S. Treasury markets, with the spot price of gold briefly exceeding $3,450. This change in market structure indicates that Bitcoin is still viewed more as a liquidity trading instrument rather than a macro safe-haven asset at this stage.

From the perspective of global capital flows, there is a clear trend of "de-emerging market" in the first half of 2025. IMF data and JP Morgan's cross-border capital tracking show that net outflows from emerging market bonds in Q2 reached the highest level for a single quarter since the pandemic began in March 2020, while the North American market experienced a relative net inflow of funds due to the stability brought by ETFization. The crypto market has not been completely insulated from this. Although Bitcoin ETFs saw a cumulative net inflow of over $6 billion this year, demonstrating strong performance, small and mid-cap tokens along with DeFi derivatives have faced large-scale outflows, indicating significant signs of "asset stratification" and "structural rotation."

In summary, the first half of 2025 presents a highly structured uncertain environment: sharp tug-of-war over monetary policy expectations, fiscal policy intentions spilling over into dollar credit, frequent geopolitical events forming new macro variables, capital flowing back to developed markets, and a restructuring of safe-haven funds, all of which lay a complex foundation for the operating environment of the crypto market in the second half of the year. It is not merely a question of "whether to cut interest rates," but rather a multi-faceted battlefield revolving around the reconstruction of credit anchored by the dollar, the contest for global liquidity dominance, and the integration of digital asset legitimacy. In this battle, crypto assets will seek structural opportunities within institutional gaps and liquidity redistribution. The next phase of the market will no longer belong to all currencies, but rather to investors who understand the macro landscape.

3. The Systemic Evolution of the Dollar System Reconstruction and the Role of Cryptocurrency

Since 2020, the dollar system has been undergoing the deepest structural restructuring since the collapse of the Bretton Woods system. This restructuring is not rooted in the evolution of payment tools at the technical level, but stems from the instability of the global monetary order itself and the crisis of institutional trust. Against the backdrop of severe fluctuations in the macro environment in the first half of 2025, dollar hegemony faces both internal policy consistency imbalances and external challenges to its authority through multilateral currency experiments, profoundly affecting the market position, regulatory logic, and asset roles of cryptocurrencies.

From an internal structural perspective, the biggest problem facing the U.S. credit system is the "erosion of the monetary policy anchoring logic." Over the past decade, the Federal Reserve has acted as an independent inflation target manager, with a clear and predictable policy logic: tighten during economic overheating, loosen during downturns, and prioritize price stability. However, by 2025, this logic is gradually being eroded by the "strong fiscal-weak central bank" combination represented by the Trump administration. The Biden administration's insistence on fiscal looseness and monetary independence has gradually been reshaped by Trump into a "fiscal priority" strategy, the core of which is to leverage the global dominance of the dollar to export domestic inflation and indirectly prompt the Federal Reserve to adjust its policy path in line with the fiscal cycle.

The most intuitive manifestation of this policy fragmentation is the Ministry of Finance's continuous strengthening of the shaping of the internationalization path of the US dollar, while bypassing traditional monetary policy tools. For example, the "Compliance Stablecoin Strategic Framework" proposed by the Ministry of Finance in May 2025 clearly supports the realization of global spillover of US dollar assets through on-chain issuance in the Web3 network. Behind this framework is the intention for the US dollar's "financial state machine" to evolve into a "technology platform state". The essence is to shape the "distributed currency expansion capability" of the digital dollar through new financial infrastructure, allowing the dollar to continue providing liquidity to emerging markets while bypassing central bank balance sheet expansion. This path integrates US dollar stablecoins, on-chain government bonds, and the US commodity settlement network into a "digital dollar export system", aiming to reinforce the network effect of US dollar credit in the digital world.

However, this strategy has also raised concerns in the market about the "disappearance of the boundaries between fiat currencies and crypto assets." As the dominance of USD stablecoins in crypto trading continues to rise, their essence has gradually evolved into "digital representations of the dollar" rather than "crypto-native assets." Correspondingly, the relative weight of purely decentralized crypto assets such as Bitcoin and Ethereum in the trading system has been continuously declining. From the end of 2024 to Q2 of 2025, data shows that the proportion of USDT trading pairs against other assets in the total transaction volume on major global trading platforms has increased from 61% to 72%, while the spot trading shares of BTC and ETH have both seen a decline. This shift in liquidity structure signifies that the dollar credit system has partially "devoured" the crypto market, with USD stablecoins becoming a new source of systemic risk in the crypto world.

At the same time, from the perspective of external challenges, the dollar system is facing continuous testing from multilateral currency mechanisms. Countries such as China, Russia, Iran, and Brazil are accelerating the promotion of local currency settlement, bilateral clearing agreements, and the construction of commodity-linked digital asset networks, aiming to weaken the dollar's monopoly in global settlements and promote the steady implementation of a "de-dollarization" system. Although an effective network to counter the SWIFT system has not yet been formed, its "infrastructure substitution" strategy has already put marginal pressure on the dollar settlement network. For example, the e-CNY, led by China, is accelerating cross-border payment interface connections with multiple countries in Central Asia, the Middle East, and Africa, and exploring the use cases of central bank digital currencies in oil and gas and commodity trading. In this process, crypto assets are caught between two systems, and their "institutional affiliation" issue is becoming increasingly ambiguous.

As a special variable in this pattern, Bitcoin's role is shifting from "decentralized payment tool" to "sovereignty-agnostic anti-inflation asset" and "liquidity channel under institutional gaps." In the first half of 2025, Bitcoin is being widely used in some countries and regions to hedge against local currency depreciation and capital controls, particularly in currency-unstable countries like Argentina, Turkey, and Nigeria. The "grassroots dollarization network" formed by BTC and USDT has become an important tool for residents to hedge risks and achieve value storage. On-chain data shows that in the first quarter of 2025, the total amount of BTC flowing into Latin America and Africa through peer-to-peer trading platforms increased by more than 40% year-on-year, and these transactions significantly avoided domestic central bank regulation, reinforcing Bitcoin's function as a "grey hedge asset."

However, it is important to be vigilant, as Bitcoin and Ethereum have not yet been integrated into the national credit logic system, their ability to withstand "policy stress tests" remains insufficient. In the first half of 2025, the US SEC and CFTC continued to intensify their regulatory efforts on DeFi projects and anonymous trading protocols, particularly launching a new round of investigations targeting cross-chain bridges and MEV relay nodes within the Layer 2 ecosystem, prompting some funds to withdraw from high-risk DeFi protocols. This reflects that during the process of the dollar system re-establishing market narratives, crypto assets must reposition their roles, no longer symbolizing "financial independence," but more likely becoming tools for "financial integration" or "institutional hedging."

The role of Ethereum is also undergoing a transformation. Along with its dual evolution into a data verifiable layer and a financial execution layer, its underlying functionality is gradually evolving from a "smart contract platform" to an "institutional access platform." Whether it is the on-chain issuance of RWA assets or the deployment of government/enterprise-level stablecoins, an increasing number of activities will incorporate Ethereum into their compliance framework.