TL;DR
In May 2025, the U.S. macroeconomic environment enters a critical turning point: continuous inflation decline, resilient employment, Federal Reserve's policy shift to a wait-and-see approach, fiscal-side "quasi-QE" operations lowering interest rates, coupled with trade policy disruptions and China-U.S. relations restoration, jointly driving market risk appetite recovery, potentially opening a new structural capital repricing cycle.
In May, the crypto market's fund activity significantly rebounded, with daily average trading volume rising nearly 16%, total market value increasing to $3.56 trillion with a structural recovery trend, led by BTC and ETH, with USD 1 ecosystem narrative projects continuing to attract attention.
Macro policy easing in May boosted market sentiment, with BTC and ETH spot ETFs recording net inflows of $5.77 billion and $317 million respectively, stablecoin total circulation increasing by approximately $7.28 billion, with funds continuously flowing in supporting crypto asset appreciation.
In late May, Bitcoin maintained its position above key resistance levels, rising for seven consecutive weeks and attracting significant institutional fund inflows. If breaking $111,980, it may challenge $130,000. Ethereum and Solana also showed strong buying pressure, with short-term targets of $3,000 and $220 respectively if breaking current resistance, maintaining an overall structurally bullish market trend.
In May, USD 1 gained traction due to multiple narratives like "presidential endorsement + RWA + stablecoin bill expectations", with stablecoin market cap breaking $2.1 billion. Ecosystem project tokens like Lista and StakeStone also surged strongly, with market closely watching potential policy dividends. Meanwhile, Believe platform rapidly rose in the MEME market through social token issuance mechanism and Launchcoin's surge, but its ecosystem heavily depends on platform token performance, with community doubts about long-term sustainability.
The 'GENIUS Act' progressed rapidly, marking a bipartisan consensus on stablecoin regulation. The bill sets strict issuance qualifications, reserve, and compliance requirements, aiming to strengthen the global dominance of USD-pegged stablecoins and limit overseas issuers and large tech companies' participation. Simultaneously, Ethereum ETF staking approval in the U.S. was delayed due to regulatory mechanism disputes, but Hong Kong has already approved staking services, with market generally expecting U.S. follow-up, benefiting ETH and staking-related assets.
In the popular tokens launched in May, VC-backed projects still dominate, including Layer 2 projects like SOPH and B2. Additionally, USD 1 was one of the hot narratives in May, with stablecoin USD 1 and its associated projects such as B, Lista, and Staketone gaining widespread market attention.
3. On-chain Data Analysis
3.1 Analysis of BTC and ETH ETF Inflows and Outflows
BTC ETF Inflows of $5.77 Billion in May
In May, as the United States reached a temporary tariff policy suspension agreement with multiple countries, market sentiment significantly improved, driving Bitcoin's price to a strong rebound and a new historical high of $111,959. As of May 28, Bitcoin's price rose from $94,212 to $108,969, an increase of about 13.5%. Meanwhile, Bitcoin spot ETF funds showed an overall net inflow trend, with a cumulative inflow of approximately $5.77 billion in May.
ETH ETF Inflows of $317 Million in May
For Ethereum, benefiting from the expected Pectra upgrade and eased macroeconomic policies, the price increase was more significant. As of May 28, ETH rose from $1,794 at the beginning of the month to $2,635, an increase of 31.9%. Ethereum spot ETF also attracted capital inflows, with a net inflow of about $317 million in May.
3.2 Stablecoin Inflow and Outflow Analysis
Stablecoin Inflows of Approximately Billions of Dollars in May - Mainly from USDT and USDC
In May, with the US suspension of tariff policies and eased macroeconomic policies, the crypto market experienced a significant pullback. The stablecoin market continued its strong growth momentum. USDT, USDE, and DAI became the main drivers of growth this month, with the total stablecoin circulation increasing by approximately $7.28 billion.
4. Price Analysis of Mainstream Currencies
4.1 BTC Price Change Analysis
Bitcoin is striving to maintain above $109,588, indicating that buyers intervene during small pullbacks. Bitcoin has been rising for seven consecutive weeks, and if buyers can extend this trend to the eighth week, it will pave the way for further increases. Institutional investors see long-term opportunities and continue to inject funds into Bitcoin exchange-traded products. CoinShares reported on May 26 that Bitcoin ETP saw $2.9 billion in inflows last week, accounting for a quarter of the total inflows in 2024.
Bitcoin bulls are working to push and maintain the price above $109,588, showing that each pullback is bought. The rising moving average and RSI approaching the overbought zone indicate that the easiest resistance direction is upward. If buyers can push the price to $111,980, the BTC/USDT trading pair might surge to $130,000.
On the downside, the 20-day EMA ($104,886) is a key support level to watch. If the price breaks below and closes under the 20-day EMA, it might tempt short-term investors to take profits, potentially causing the price to drop to the psychological level of $100,000, where buying pressure is expected to form strong support.
4.2 ETH Price Change Analysis
Ethereum rebounded from the 20-day EMA ($2,425) on May 25, showing strong demand at lower prices. Bulls will again attempt to break through the resistance at $2,738. If successful, the ETH/USDT trading pair might surge to $3,000, although bears may try to stop the rise near $2,850.
If the price pulls back from current levels or encounters resistance and breaks below the 20-day EMA, it would indicate weakening bull control. In this case, the price might drop to $2,323 and then to $2,111.
4.3 SOL Price Change Analysis
Solana found support at the 20-day EMA ($169) on May 25, indicating positive market sentiment with traders buying during minor pullbacks. Bulls will again attempt to break through the resistance at $188. If successful, the SOL/USDT trading pair might surge to $210 and potentially reach $220.
However, sellers need to break the price below the 20-day EMA to prevent further increases. After breaking below this support, the price might drop to the 50-day SMA ($151), which could serve as strong support. If it rebounds from the 50-day SMA, it might lead to consolidation between $153 and $188.
5. Hot Events of the Month
USD 1 Ecosystem
In mid-May, with BTC's price breaking its historical high and Binance listing USD 1, causing its popularity to soar, USD 1 ecosystem partner projects also gained market attention. As of May 28, 2025, USD 1 stablecoin's market cap has exceeded $2.1 billion, rising to the seventh-largest stablecoin. Although USD 1's mechanism design is not significantly different from other mainstream stablecoins like USDT and USDC, its core advantage is being issued by the Trump family's WLFI, making it the first presidential-endorsed stablecoin project.
Currently, USD 1's main narrative revolves around "presidential endorsement + RWA track + stablecoin bill expectations". WLFI officially positions USD 1 primarily for institutional users, while retail investors may find better opportunities in USD 1 ecosystem projects. Recently, multiple USD 1 partner tokens such as Buildon, Lista DAO, StakeStone, Haedal, and Cookie have seen significant price increases, driving market enthusiasm for the "WLFI+USD 1" concept. If the US stablecoin bill is successfully passed, USD 1, as a presidential-endorsed stablecoin project, and its deeply integrated partners may occupy a more important position in the future crypto ecosystem.
Believe Rises as a New MEME Platform
As of May 28, Believe platform's core token Launchcoin rose from $0.014 at the beginning of the month to a high of $0.36, with its market cap briefly approaching $310 million, becoming one of the highest-rising MEME coins recently. The platform, created by Ben Pasternak, focuses on the "social asset" concept, where users can automatically trigger token issuance by tweeting with $TICKER and @launchcoin on X platform.
With its innovative token issuance mechanism and Launchcoin's surge, Believe platform's activity rapidly increased, with tokens like Dupe and Goonc following suit, pushing the platform's new token count to third among MEME platforms. However, the official over-supported token $YAPPER crashed over 66% after listing, triggering community FUD and causing a sharp decline in ecosystem heat. As of May 28, Believe has issued over 27,000 tokens, with a total market cap of about $290 million, of which Launchcoin contributes nearly 63% and accounts for nearly 72% of the ecosystem's total trading volume. It's clear that the platform's token heavily depends on Launchcoin's market performance. However, the platform token is criticized for lacking dividends and actual application scenarios, with the community having significant doubts about its long-term sustainability. Once market heat cannot be maintained, investor confidence may rapidly decline, posing a potential stampede risk.
Overall, the current MEME market is highly homogeneous. While Believe simplifies the issuance process through X, it has not fundamentally changed the MEME issuance logic. Its future sustainability will depend on whether it can continuously innovate or create projects with genuine wealth-generating effects.
6. Next Month Outlook
Stablecoin Bill Approval Progress
This month, the GENIUS Stablecoin Bill passed the debate motion with 69 votes in favor and 31 votes against, entering the revision procedure. With the rapid advancement of stablecoin bills in the House and Senate, the rare bipartisan consensus on crypto asset regulation suggests the bill may complete its legislative process in Q4 2024.
The core of the GENIUS Bill includes key contents such as issuance qualification restrictions, reserve requirements, compliance obligations, user protection, and international applicability. The bill stipulates that only specific financial institutions can issue payment stablecoins, all stablecoins must be 100% backed by high-liquidity assets, and customer assets must be strictly segregated. Issuers must disclose reserve situations monthly, undergo certified public accountant audits, and senior management bears legal responsibility for information accuracy. Issuers must establish comprehensive anti-money laundering and sanctions compliance systems and record and monitor transaction activities. The bill also sets limits on overseas issuers and large tech companies, requiring them to follow equivalent US regulatory standards to prevent systemic risks and market monopolies. In terms of consumer protection, token holders enjoy priority repayment in case of issuer bankruptcy, and officials are prohibited from participating in stablecoin business during their term. Additionally, the bill clarifies that payment stablecoins are neither securities nor commodities, excluding overlapping SEC and CFTC regulations.
The GENIUS Bill is not just a regulatory framework for stablecoins, but a strategic move by the US to promote US dollar-anchored compliant stablecoin issuance, attract global capital to US Treasury bonds, restrict overseas issuers, and comprehensively strengthen the international dominance of digital dollars. Hong Kong has already passed the Stablecoin Issuer Ordinance Draft, setting the first comprehensive regulatory framework for its stablecoin market. Based on the previous Bitcoin spot ETF experience, the US is highly likely to subsequently pass related bills. In this context, stablecoin projects with strong compliance are expected to gain greater market recognition.
Ethereum ETF Staking Approval Progress
On April 14, the SEC postponed the decision on Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF until June 1, with the final decision deadline being the end of October, delayed due to regulatory issues involving staking and physical subscription/redemption mechanisms. In contrast, Hong Kong's Ethereum ETF staking progress is faster. On April 11, Bosera Fund announced that the Bosera Hashkey Virtual Asset Ethereum ETF received regulatory approval, allowing staking of up to 30% of Ethereum holdings starting from April 25, 2025. On April 18, Huaxia Fund is set to launch staking services for its Ethereum spot ETF, becoming the second fund to offer such services in Hong Kong.
Based on previous Bitcoin and Ethereum ETF approval experiences, Hong Kong typically leads the US. Therefore, after Hong Kong first approves staking, the market generally expects US regulators to soon establish a regulatory framework for related mechanisms and advance the final approval of the Ethereum spot ETF. Once achieved, this will not only promote the institutionalization of Ethereum as an asset class but also potentially bring a new wave of market enthusiasm for Ethereum and Ethereum staking-related assets like Lido and Eigen.
