May 2025 Crypto Market Analysis Report

Macroeconomic Situation

In May 2025, the US 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. Against this backdrop, the crypto market demonstrates strong resilience, and the global risk asset structure may be poised for a new round of revaluation.

inflation trend

In April, the seasonally adjusted CPI year-on-year fell to 2.3%, the lowest since February 2021, indicating that price pressures continue to ease. The seasonally adjusted CPI month-on-month recorded 0.2%, showing insufficient momentum for inflation to rebound in the short term. At the same time, the U.S. Treasury Department initiated a $40 billion Treasury bond repurchase operation, regarded 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 2025, non-farm employment rose by 177,000, far exceeding market expectations and reflecting the resilience of the job market. This provides a basis for the Federal Reserve to maintain a wait-and-see policy. Continuous strong employment has alleviated market concerns about a recession, but it has also weakened the likelihood of multiple unexpected rate cuts within the year.

monetary policy dynamics

The Federal Reserve Chairman stated that they will re-evaluate the current monetary policy framework and may abandon the "average inflation targeting" mechanism. In the future, they may extend the period of high interest rates and even increase holdings of medium to long-term government bonds through balance sheet expansion to control the rise in long-term interest rates. The policy tone will be more flexible, and there is no urgency for preemptive rate cuts in the short term.

Trade Policy and Global Economic Outlook

In early May, the United States announced tariffs on EU goods, which were later postponed, but this has already impacted market sentiment. China has implemented a combination policy of "reducing the reserve requirement ratio + interest rate cuts," releasing a large amount of liquidity. This move is seen as the beginning of a new round of easing cycle, with market expectations for improved Sino-U.S. relations heating up and risk appetite increasing accordingly.

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, indicating a sustained recovery in capital activity. The overall market exhibited high volatility characteristics, with multiple instances of daily trading volume exceeding a 50% increase. In early May and late May, trading volume surged significantly, with daily trading volume once breaking through $180 billion. During this period, the price of BTC surpassed $100,000 and $110,000 respectively, and market bullish sentiment significantly intensified.

Market Capitalization Analysis

As of May 27, the total market capitalization of cryptocurrencies has rebounded to $3.56 trillion, up 17.0% from last month. Among them, BTC's market share is 62.6%, and ETH's market share is 9.6%, the latter having increased by 29.7% compared to the previous period, indicating a continued preference for fund allocation towards ETH. Since May 8, after the total market capitalization surpassed $3.3 trillion, it has been steadily rising, with a clear trend of structural market recovery.

New Trending Tokens

Among the popular tokens launched in May, VC-backed projects still dominate, including Layer 2 projects like SOPH and B2. In addition, USD1 has emerged as a hot narrative in May, with related projects such as B, Lista, and Staketone also receiving widespread market attention.

On-chain Data Analysis

ETF capital flow

In May, BTC ETF net inflows were $5.77 billion, and ETH ETF net inflows were $317 million. The price of BTC increased from $94,212 at the beginning of the month to $108,969, a rise of approximately 13.5%. The price of ETH rose from $1,794 to $2,635, an increase of 31.9%.

stablecoin market

In May, the stablecoin market continued its strong growth momentum, with a total circulation increase of approximately $7.28 billion. USDT, USDE, and DAI became the main drivers of growth.

Mainstream Currency Price Analysis

BTC

Bitcoin is striving to maintain above $109,588, showing that there is buying interest with each small pullback. If it breaks above $111,980, it could soar to $130,000. The key support level below is $104,886.

ETH

Ethereum rebounded from $2,425, and bulls will once again attempt to break through the $2,738 resistance level. If successful, it may rise to $3,000. The support levels below are at $2,323 and $2,111.

SOL

Solana found support at $169, and the bulls will attempt to break through $188 again. If successful, it could rise to $210 or even $220. The support level below is at $151.

Hot Events

USD1 ecosystem

In mid-May, the popularity of USD1 skyrocketed, with a market value surpassing $2.1 billion as of the 28th, making it the seventh largest stablecoin. Its core advantage lies in being issued under the leadership of the Trump family, making it the first stablecoin project backed by a president. The prices of several tokens related to USD1's partners have surged significantly, driving the market's high demand for the "WLFI+USD1" concept.

The rise of the Believe platform

The core token of the Believe platform, Launchcoin, rose from $0.014 at the beginning of the month to a peak of $0.36, with a market cap approaching $310 million at one point. The platform focuses on the concept of "social assetization," allowing users to trigger token issuance by tweeting with $TICKER and @launchcoin on the X platform. However, after the excessively supported token $YAPPER was launched, it plummeted over 66%, raising doubts within the community.

Future Outlook

Stablecoin Act

The "GENIUS Act" has entered the amendment process through a debate motion. The core of the bill includes issuance qualification restrictions, reserve requirements, compliance obligations, and more. The legislative process is expected to be completed by Q4 2024, and stablecoin projects with strong compliance are likely to gain greater market recognition in the future.

Ethereum ETF pledge approval

The SEC has postponed its decision on the Ethereum Trust ETF to June 1, with a final deadline at the end of October. Hong Kong has approved Ethereum ETF staking, and the US market expects regulators to reach a framework on related mechanisms soon. Once realized, it will drive a new wave of market enthusiasm for Ethereum and related assets such as Lido and Eigen.