The new high of BTC is just the prologue; on-chain dollars and a structural bull market have just begun.
On May 22, 2025, the price of Bitcoin officially broke through the $110,000 mark, setting a new historical high. Under the combined effects of policy, macroeconomics, capital flow, and investor structure, a wave of structural bull market is unfolding. The core driver behind this round of price increase is the substantial progress of the U.S. "GENIUS Stablecoin Act" and the accumulation of multiple favorable factors. This article will comprehensively analyze the deep logic behind this round of BTC's new high from five dimensions: policy breakthroughs, macro environment shifts, on-chain and ETF capital structures, evolution of trading behavior, and key beneficiary sectors, while also looking ahead to potential trends in the market for the second half of the year.
1. Policy: Stablecoin Legislation Breakthrough, the "GENIUS Act" Releases Trillions of "Dollar-like Liquidity"
On May 14, 2025, the U.S. Senate passed the motion for the "GENIUS Act" stablecoin regulatory bill with a vote of 69 to 31, marking the formal entry of the bill into the final amendment and full chamber voting process. This is a significant breakthrough in U.S. history, as it is the first time stablecoins have been incorporated into the federal legislative system, which means the crypto industry will welcome unprecedented incremental liquidity within a compliance framework. The essence of this bill is to provide a clear and legal operating mechanism for the current approximately $200 billion dollar stablecoin market, which has long been in a gray area, effectively bringing a large amount of off-chain dollar capital into the on-chain system and opening the main channel for "dollar-like liquidity" for the entire crypto ecosystem.
The legislative background of the GENIUS Act is filled with real urgency. On one hand, stablecoins, as a form of "on-chain dollars," have become the foundational assets for crypto trading and DeFi finance, but they have long been in a regulatory vacuum in the U.S., with institutions like the Treasury and SEC even shifting responsibility back and forth. On the other hand, global digital currency initiatives like China's digital yuan and the EU's MiCA legislation are accelerating, and the U.S. urgently needs to provide its own answer in the "financial geopolitical competition," making the compliance of stablecoins a frontline battlefield for maintaining the global dominance of the dollar. Therefore, the GENIUS Act is endowed with strategic significance; it is not only a regulatory response to financial innovation but also a digital extension of the dollar's financial infrastructure.
From the perspective of the bill's design, it requires all stablecoins to be issued by banks or registered trust institutions at the federal or state level in the U.S., backed by 100% cash or short-term U.S. Treasury bonds as reserve assets, with daily public disclosure of reserve status and oversight from the Treasury, SEC, and CFTC. In other words, in the future, stablecoins must not only be "compliant" but also "on-chain auditable," which directly targets the credit risks and audit opacity issues present in traditional stablecoin models like USDT. The bill also includes a CBDC exclusion clause, clearly stating that its goal is not to promote central bank digital currencies but to build a market-driven "stablecoin free competition system," which is highly relevant in the current political climate and clears obstacles for the long-term development of market-oriented dollar stablecoins.
It is noteworthy that the GENIUS Act has not only received strong support from the Republican Party but also gained tacit approval from some moderate Democrats. The Trump camp views it as a core of future digital financial strategy. Trump's crypto advisor David Sacks publicly stated that once the bill is passed, it will release "trillions of dollars" in on-chain demand for short-term U.S. Treasury bonds, indirectly achieving the digital digestion of U.S. debt and alleviating refinancing pressure. Meanwhile, the Federal Reserve and the Treasury have begun to open data interfaces and auditing mechanisms for compliant stablecoins, and the SEC has already started drafting accompanying regulatory rules for cryptocurrencies, indicating that government agencies are actively paving the way for the implementation of this bill.
This series of institutional and capital preparations means that once the bill is passed, a legal, transparent, and deeply interconnected on-chain dollar ecosystem with traditional finance will quickly take shape. Large fintech companies like Circle, PayPal, Visa, and JPMorgan are likely to participate in the issuance and clearing system of the new generation of stablecoins, becoming pioneers in the global expansion of dollar digitalization. The crypto market will also reach a turning point under this mechanism, especially as short-term U.S. Treasury bonds will be injected on-chain in large quantities, becoming the standard collateral asset for stablecoins, with their low volatility and high credit characteristics providing a new "risk-free interest rate anchor" for the entire on-chain financial system.
It is foreseeable that once the bill is officially legislated, the U.S. stablecoin market will transition from an unregulated state to a new paradigm of "strong regulation + high transparency," with non-compliant stablecoins like USDT and DAI potentially facing pressure to restructure their models, while U.S.-based stablecoins like USDC and PYUSD are expected to dominate the compliant landscape. In terms of capital, according to estimates from multiple institutions, the first phase alone is expected to introduce $200 billion to $400 billion in new stablecoin issuance into the on-chain market, which will not only reconstruct the on-chain payment and clearing mechanisms but may also directly enhance the valuation anchor of Bitcoin and mainstream assets. In the past, Bitcoin's market was mainly driven by spot and futures capital, while in the future, the "on-chain dollar deposit" mechanism carried by stablecoins will become a new cornerstone of the Bitcoin price system.
The advancement of the GENIUS Act marks a historic turning point in the transformation of stablecoins from marginal tools to core financial infrastructure. It releases not only liquidity but also a rebalancing of the U.S. dominance over on-chain financial order. In this new framework, stablecoins will become a strategic weapon for the "on-chaining of the dollar," and crypto finance will truly transition from a gray laboratory to an institutionalized track. With compliant capital flooding in on a large scale, the market may enter a new round of "macro bull market" in the second half of 2025, with the stablecoin sector becoming the "policy-driven main line" leading this round of market activity.
2. Macro Environment: U.S. Treasury Yield Declines, Capital Environment Marginally Eases, "Invisible QE" Enters a New Phase
The current crypto market is undergoing a capital repricing process driven by changes in the global macro environment, with the core of this trend being the rebalancing between the structural contradictions of U.S. debt and interest rate policies, as well as the transition of the capital environment from tight to loose under the linkage of fiscal and monetary policies. Recent market changes have clearly reflected this turning point signal. The yield on the U.S. 10-year Treasury bond has significantly declined from its peak, now falling to 4.46%, and market expectations for the long-term interest rate path have loosened, reflecting a re-evaluation of the balance between U.S. economic growth and inflation, which is a favorable premise for the valuation reconstruction of all risk assets, including Bitcoin. The recent decline in Treasury yields is not purely a result of market trading but rather a product of active intervention by the Treasury. This month, the U.S. Treasury announced the initiation of a $40 billion Treasury bond repurchase operation. Although it does not explicitly operate under the name of "QE" like traditional quantitative easing, its core mechanism is essentially similar to QE: actively buying back issued Treasury bonds to relieve liquidity pressure and refinancing new debt at low interest rates. Wall Street generally views this as a form of "invisible QE" or "quasi-QE operation." More importantly, this operation does not require the Federal Reserve's cooperation, achieving suppression of the actual interest rate level without expanding the Fed's balance sheet. As a result, since the start of this repurchase, the volatility index of the bond market, the MOVE index, has rapidly declined, reflecting a stabilization of market expectations for future interest rate paths, and this stability is precisely the "gentle monetary environment" signal that crypto assets need most on the macro front.
At the same time, U.S. inflationary pressures are marginally easing, with both CPI and PPI data showing month-on-month declines, and the consensus within the Federal Reserve regarding the continuation of high interest rates is beginning to loosen. Previously, the market was concerned that "high interest rates would last longer," suppressing the valuations of risk assets, but as inflation cools and fiscal burdens increase, the Federal Reserve has gradually released signals that it may adjust its policy stance in the second half of the year. Recently, some voting members have also stopped emphasizing "continuing to raise interest rates" in their speeches, focusing instead on "flexibly responding after observing data," indicating that the Fed's next phase will shift its tone from "controlling inflation" to "stabilizing growth" and "maintaining debt sustainability," and this process of policy adjustment essentially constitutes a driving factor for the marginal easing of the capital environment.
As the macro economy begins to slow down and the policy adjustment window opens, the other end of the global financial system—the crypto market—is experiencing a rare structural turning point: the on-chain capital structure is increasingly optimized, and the proportion of long-term holders has reached a new high. Data from Glassnode shows that currently, 97% of Bitcoin addresses are in profit, and the on-chain non-liquid supply has also reached a historical high. This means that Bitcoin's price is not only driven by short-term speculation but is also being repriced in an environment where liquidity is gradually tightening and market confidence is strengthening. In this context of structural holding, once the macro environment releases easing signals, risk appetite will quickly recover, and the valuation space for mainstream cryptocurrencies will be reopened.
More importantly, the continued decline in U.S. Treasury yields is reshaping the positioning of the "risk-free return anchor" in global capital markets. Over the past two years, U.S. Treasury yields have exerted a suppressive effect on digital assets, but as the yield curve shifts downward, the opportunity cost of holding crypto assets versus holding cash is rapidly decreasing. In fact, during certain time windows, the yield on on-chain stablecoin investments has even surpassed that of Treasury bonds of the same duration, and this micro-spread rebalancing is driving some capital back into on-chain assets. In a low real interest rate environment, stablecoin holders are more willing to participate in DeFi to obtain excess returns, thereby driving the prices of mainstream assets represented by Bitcoin and Ethereum to continue rising.
The continuous inflow of funds into spot Bitcoin ETFs further confirms the change in the pricing logic of crypto assets due to the macro shift. Even when U.S. stocks experienced volatility due to concerns over fiscal and credit ratings, Bitcoin's price broke through the historical high of over $110,000 over the weekend, demonstrating significant resilience in the market. The inflow of funds into ETF products is essentially a "vote" of confidence in the stability of the macro fundamentals: institutional investors believe that Bitcoin possesses long-term value anchor properties in the current environment, capable of hedging against uncertainties in traditional financial markets. As the interest rate decline cycle approaches and market expectations for "re-inflation of financial assets" strengthen, Bitcoin's logic as "digital gold" for hedging and value appreciation will become increasingly attractive.
In summary, the macro environment is entering a new phase of "structural easing + policy adjustment + capital repricing." From the Treasury's repurchase operations to market expectations for the Fed's shift, to the overall decline in bond market yields and the continued stability of ETF inflows, all variables are collectively driving crypto assets into a bull market trajectory with inherent resilience. In this context, Bitcoin is not only the engine of the market but also the cornerstone for the repricing of the entire digital asset ecosystem, while key sectors such as stablecoins, DeFi, and RWA (real-world asset tokenization) will welcome larger-scale capital and user dividends under this macro catalysis.
3. On-Chain Structure: BTC Non-Circulating Supply Hits New High, ETFs Continue to Attract Capital, Chip Structure Stabilizes
The reason Bitcoin can continue to strengthen and break through the $110,000 mark to set a new historical high in the current environment of intertwined macro and policy variables lies in the deep restructuring of its on-chain structure. On one hand, data from on-chain analysis platforms like Glassnode shows that the non-circulating supply of BTC has reached an all-time high, indicating that more and more Bitcoin is being firmly held and locked in wallets by long-term investors, rather than flowing into the trading market. This phenomenon is not just a change in technical indicators but reflects an enhancement of structural market belief: more investors view Bitcoin as a long-term store of value rather than a short-term speculative tool, willing to exchange time for space and wait for long-term value to be released.
Behind this trend is the result of mainstream capital continuously flowing into spot Bitcoin ETF products over the past few months. As of now, the cumulative net inflow of multiple Bitcoin spot ETFs in the U.S. has exceeded $10 billion, especially with the participation of asset management giants like BlackRock and Fidelity. This capital is not for short-term arbitrage but more likely represents the "formal allocation" of traditional institutions such as pension funds, sovereign funds, and family offices to BTC. Their participation not only provides strong buying support but also has a profound impact on the market liquidity structure of Bitcoin. Compared to the previous market pattern dominated by retail investors on exchanges with extreme price fluctuations, the current Bitcoin price exhibits a more "institutional style": converging volatility, clear trends, limited pullbacks, and stable inflows.
More importantly, from the perspective of chip structure, Bitcoin is gradually breaking free from its historical fate of being "stuck at high positions in every bull market." This round of price increase is not driven by scattered hot money but is jointly propelled by institutional investors with long-term capital backgrounds and "new long-term holders" who have a deep understanding of the macro environment and monetary system. On-chain data shows that while the number of active addresses remains stable, the proportion of short-term chips moving frequently has decreased, indicating that there is no urgent cash-out behavior among short-term investors, and market sentiment remains in a rationally optimistic range. Meanwhile, the average holding time of coins in the hands of long-term holders (LTH) continues to lengthen, showing that the consensus foundation of Bitcoin is further solidifying.
ETF inflows, non-circulating supply hitting new highs, and the increasing proportion of long-term holders' chips together form the "anchor" of the current Bitcoin price, which is also the fundamental reason it can achieve independent growth and resist declines amid many uncertainties in traditional markets. Unlike the previous cycle, Bitcoin is gradually moving towards recognition of its "reserve asset" attributes, no longer merely serving as a price barometer for the crypto industry but gaining strategic asset status on par with gold and bonds in the context of global capital allocation.
At the same time, a series of on-chain infrastructure surrounding the Bitcoin ecosystem is also maturing. The number of products pegged to BTC stablecoins is continuously increasing, on-chain DeFi tools combined with Bitcoin assets are becoming active, and some high-net-worth users are even using Bitcoin as collateral for on-chain lending and investment operations, which has released some capital efficiency for Bitcoin. Projects like BTC Staking on the HTX public chain or the TUSD and USDD stablecoin models promoted by the Tron network, which are pegged to Bitcoin, further reinforce Bitcoin's role in the on-chain financial system. Bitcoin is no longer just an "asset to watch the price" but is gradually becoming a "used asset," and this structural logical change will provide more solid support for the mid- to long-term market.
It can be said that Bitcoin has completed its transformation from a "trading tool" to an "institutional asset," and the significance of this structural change far exceeds short-term price fluctuations. From the perspective of on-chain data, the current Bitcoin market is more mature, more stable, and possesses greater long-term potential than any previous cycle. This not only provides a solid foundation for further price increases but also establishes a "valuation anchor" for the entire crypto asset market, becoming the true engine of a structural bull market.
4. Trading Behavior: Healthy Long/Short Structure, Market Not Overheated, Limited Pullback Space
As Bitcoin breaks through historical highs under the support of macro easing expectations and favorable policies, the most pressing question for investors is: Is the current market overheated? Will there be a sharp pullback? From a trading perspective, the answer is "not yet." Although this round of price increase has been rapid, the trading structure and capital sentiment have shown a relatively healthy rhythm control, with neither panic buying nor obvious signals of excessive leverage accumulation. The funding rates in the futures market remain in a reasonable neutral range, with no significant positive premiums, indicating that while bullish sentiment is strong, it has not spiraled out of control; the price difference structure between spot and contracts also remains stable, further confirming that the current price trend is more driven by spot buying rather than derivative leverage.
From the options market perspective, the call/put ratio in mainstream exchanges remains biased towards bullish levels, especially in the mid-term contracts from late June to September, where call options have been actively built, indicating that investors still hold bullish expectations for the coming quarters. Additionally, the options volatility curve shows a gentle upward slope, without becoming steep due to price increases, indicating that the market has not excessively priced future volatility. In this context, any technical pullback is likely just short-term bulls taking profits rather than a trend reversal. This "gentle pullback, slow bull pattern" is a typical characteristic of a structural bull market.
Moreover, on-chain indicators also support this view. Although the average holding profit rate of Bitcoin has risen to a high level, the "profit-taking" behavior is not concentrated; the activity indicators and capital inflow data are rising in sync, with no typical top characteristics of price increases diverging from user activity. Meanwhile, although the Fear and Greed Index has risen to "extreme greed," it is still distant from the highs of the 2021 bull market. Importantly, there has not yet been a large-scale outflow of funds or institutional reductions observed on mainstream trading platforms like Binance, HTX, and Coinbase, indicating that core participants in the market are still holding or even increasing their positions rather than retreating.
It is worth noting that the current healthy and stable trading structure of the market is also due to the "deep deleveraging" of the previous liquidation cycle. Events like the FTX collapse, LUNA wipeout, Three Arrows liquidation, and Genesis bankruptcy, although causing panic in the short term, cleared a large amount of excessive leverage and fragile chains, allowing the market to enter a more robust upward channel. This has also laid a clean foundational environment for the steady breakthrough of Bitcoin's price in this round.
From the retail perspective, on-chain data shows that while the number of new wallets has rebounded, it is far from the "FOMO-style explosion" levels seen during bubble cycles. Search interest, social media discussion volume, and the popularity of crypto-related content on YouTube and TikTok are rising, but have not yet formed a nationwide frenzy. In other words, the current market is more driven by structural capital and professional investors, far from reaching the level of widespread participation and frequent top signals. In other words, the "mass base" of this bull market has not yet fully activated, leaving significant room for price increases, and the extent and depth of pullbacks will be strongly supported by chip structure and professional capital, making extreme corrections of 40% to 50% like those in 2021 unlikely.
Therefore, in terms of trading behavior, whether from futures funding rates, options building behavior, on-chain activity, or from capital structure and trading platform trends, the current market is not in a state of "irrational exuberance," but rather exhibits a calm, healthy, and rhythmic upward path. In this state, the pullback space is relatively limited, leaning more towards "strong consolidation" rather than "trend reversal." Investors should also align their strategy choices with the structural slow bull rhythm, avoiding excessive chasing of highs and lows, and are more suited to "buying on dips" rather than "high-level speculation."
5. Key Sectors and Investment Logic: TRX Ecosystem and Stablecoin Payments as Major Beneficiaries
In the context of the significant progress of the "GENIUS Act" stablecoin bill, the marginal easing of the macro capital environment, and Bitcoin breaking historical highs, the next focus for investors is not just whether BTC can rise further, but which "sectors" and "assets" will truly absorb new capital and become the structural dividend winners in the next phase. From policy context to on-chain data, from capital movements to technological evolution, it is clear that the stablecoin payment sector, particularly the on-chain dollar payment system represented by TRX (Tron), is becoming the biggest beneficiary of this round of policy dividends and capital shifts.
First, the policy logic is very clear. The "GENIUS Act" aims to provide a federal regulatory framework for the stablecoin market, opening a positive channel between U.S. Treasury bonds and crypto dollars, essentially "legitimizing the dollar on-chain." It does not directly benefit high-volatility assets like BTC and ETH but rather benefits the infrastructure public chains and protocols that build payment networks and dollar-denominated asset settlement networks around stablecoins. The current factual leader in this sector is undoubtedly the TRON network. According to DefiLlama data, over $42 billion of USDT is circulating on the TRON network, far exceeding that on Ethereum. On-chain tracking shows that TRON currently accounts for over 75% of the global stablecoin cross-border transaction volume, making it the most widely used "on-chain dollar highway" in the real world. This means that once regulatory dividends and legalization channels are opened, TRON will be the most direct beneficiary, naturally enjoying the status of "the first chain for compliant stablecoin applications."
From the perspective of capital behavior, market attention has also quietly shifted to key assets within the TRX ecosystem. TRX, as the Gas Token of the TRON mainnet, also serves as the underlying value support for the entire TRON financial system, and has been steadily rising for several weeks. Compared to other mainstream public chain tokens, while TRX's price increase has not been extreme, its volatility is minimal, and the main capital holdings are stable, indicating a characteristic of "structural capital continuously accumulating." Ecosystem tokens around TRX, such as JUST (a DeFi lending protocol on Tron) and USDD (a native stablecoin of Tron), are also becoming key focus areas for high-net-worth investors and VCs. The frequency of technological updates and external collaborations within the TRON ecosystem has also noticeably increased—recently, Justin Sun emphasized during his visit to the U.S. and interactions with the Trump family that his goal is to promote the global payment popularization of "on-chain dollars," aligning closely with U.S. policy directions. This "policy resonance + technological implementation + reasonable asset pricing" pattern is a rare "triple resonance" that few crypto projects can achieve in the early stages of a bull market, and its scarcity constitutes the core support for TRX's current valuation.
More importantly, compared to other Layer 1 ecosystems, TRON does not pursue high-frequency speculation or narrative-building but steadily advances around the clear main lines of "stablecoin payments" and "on-chain financial efficiency." This coherence in narrative is key to its ability to traverse cycles through multiple bear markets. As global demand for on-chain payments, cross-border settlements, and tokenized dollars continues to rise, coupled with U.S. policy gradually shifting towards "maintaining global financial dominance with dollar stablecoins," the stablecoin payment mainline represented by TRON is likely to complete a "strategic repricing" from the margins to the main stage within the next 1 to 2 years.
In summary, with the advancement of the "GENIUS Act" and the gradual shift in global policies, the entire crypto market is about to welcome the explosion of the "on-chain dollar era." Those ecosystems that truly undertake dollar payment functions and already have application foundations will become the biggest winners. TRON not only possesses real payment data and usage foundations but also has a clear technological path and policy strategic alignment, making its ecosystem tokens TRX, USDD, USDJ, TUSD, SUN, BTT, and others the core assets to watch in this round of macro liquidity and policy dividends.
6. Conclusion: The New High of BTC is Just the Prologue; On-Chain Dollars and the Structural Bull Market Have Just Begun
The advancement of the "GENIUS Act" marks a paradigm shift in the U.S. regulatory approach to crypto assets—from "suppressing speculation" to "embracing digital dollar infrastructure." This is a profound restructuring of the global capital market. Bitcoin, as the purest "non-sovereign anti-inflation asset," is not only achieving a technical breakthrough but also completing a "cognitive upgrade" and "status elevation." Its $110,000 mark is just a starting point; larger capital channels have just begun to open.
For investors, the real opportunity lies in positioning early in the structural trend and laying out ecological infrastructure, rather than merely speculating on prices. In the second half of 2025, we have reason to believe that Bitcoin's next target is $150,000 to $180,000, while the real explosion will be the billion-dollar spring of the "on-chain dollar ecosystem."
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