Crypto 2025: Four Pillars of the Market, From Policy to Finance Flows

The year 2025 marks a special period in crypto history—not entirely a hot bull market, nor a gloomy bear market, but an unusual market season dominated by policy decisions, Wall Street interests, and inevitable FOMO syndrome when opportunities arise. To understand the overall picture, we need to analyze four main factors shaping this year.

Origin from the Government: Trump Effect and Clear Legal Framework

When Trump took office as US President in January, the crypto market immediately saw a new light. Not only did BTC approach the $100,000 mark, but a surprising event also caused a “wealth explosion”—TRUMP, a meme coin claiming to be “the President’s official currency,” skyrocketed from a valuation of $4 billion to $80 billion within a few weeks. Many Chinese traders made tens of millions of USD from this meme frenzy.

But the deeper influence lies in policy. Changing SEC leadership to Paul Atkins, appointing David Sacks as the coordinator for AI and crypto at the White House—these steps signaled a new era of legal clarity. Especially, pushing the GINUS stablecoin regulation bill showed the US government’s readiness to clearly define regulatory boundaries.

However, not all promises became reality. The plan to build a “National Strategic Bitcoin Reserve” based on seized assets, which had raised high expectations, was ultimately judged as not implemented on Polymarket. Despite this, the Trump effect was confirmed as whales outside the market made millions from these policy moves.

The Fight for Legitimacy: Tokenizing Real Assets and Stablecoins

By the end of Q2, a significant event occurred—Nasdaq proactively proposed to the SEC about on-chain tokenized stock trading. Prior to that, platforms like xStocks and MyStonks paved the way, allowing traders to trade AAPL, TSLA, NVDA as tokens on the blockchain. This was not just a technical advancement but a recognition from traditional finance that fractionalized, on-chain assets are the future.

At the same time, stablecoins entered the mainstream. Circle’s IPO on the US market, along with support from major corporations like JD.com and Ant Group, elevated stablecoins from speculative tools to a full-fledged financial sector.

But alongside that, ETH treasury companies (DAT) appeared as an undeniable “craze.” From Consensys leading Sharplink to become the first listed ETH treasury company, to Tom Lee of Bitmine joining, the number of ETH treasury companies grew to nearly 70. Data shows Bitmine holds 3.86 million ETH, far surpassing Ethereum Foundation’s (230,000 ETH).

However, the FOMO phase quickly turned into harsh reality. Many DATs faced NAV below 1, meaning their market cap was lower than the value of their holdings. The temporary wealth came at the cost of long-term collapse.

Market Predictions Become a New Playground

Polymarket and Kalshi, once niche platforms, became focal points in 2025. After Kalshi received a Series E funding round led by Paradigm with a valuation of $11 billion, Polymarket was valued at $12-15 billion in a funding round from ICE Group. These platforms not only provided clarity on political decisions but also became places where crypto traders expressed their hopes and fears.

The importance of these platforms lies in providing a gauge of market sentiment. When everything else is uncertain, betting on outcomes can become the primary trading method.

Unpredictable Volatility and FOMO Syndrome

Although Q1 was marked by optimism and Q2 by the collaboration between traditional finance and crypto, Q3 and Q4 were seasons of volatility. In April, trade wars erupted, causing BTC to fall below $80,000 and ETH down to $1,540. The amount of money evaporated from the US stock market reached $6 trillion.

Strangely, amidst this chaos, the massive Hyperliquid airdrop and Aster Perp DEX generated fourfold returns. Plasma blockchain stablecoin, which once attracted investors with FOMO, and the 900x returns from sending $1 to receive XPL worth $9,000(, were only temporary. Currently, XPL has plummeted from a peak of $1.67 to $0.17, nearly a 90% drop.

October marked the lowest point. After Trump announced a 100% tax increase, BTC dropped to $101,516 )down 16%(, ETH fell to $3,400 )down 22%(, and SOL lost 31% of its value within 24 hours. The actual liquidation scale ranged from $30 billion to $40 billion, surpassing historic liquidations on 3.12, 5.19, 9.4.

Lessons from a Year Full of Twists

2025 is not just about individual wins or losses but about continuous evolution. From the policy effect )Trump(, to the legalization of )asset tokenization(, to the wisdom of choosing the right timing )market prediction(—crypto has developed from an isolated component to a core part of global finance.

However, the hidden opportunities in volatility are not for everyone. Those who succeed are those who learn from collapses to prepare for recovery. FOMO syndrome still exists, but lessons from XPL, Plasma, and DAT have shown that not all soaring prices are “golden opportunities.”

As 2025 approaches its end, the crypto market stands at a crossroads. US regulation, traditional finance, and the crypto community will jointly decide the direction. The remaining players must continuously adapt—not to get rich quickly, but to survive long-term.