As far as the optimistic, hopeful, dreamy stuff goes… The first half of 2025 has been a wild ride for the crypto world. From Bitcoin reaching new all-time highs to Ethereum experiencing significant volatility, and the surge in stablecoin adoption, there's a lot to unpack. Even Circle, another major stablecoin issuer, went public. Li Wei, a blockchain content strategist, explains what’s driving the big changes that have created today’s market and why it’s so different from before.

Bitcoin's Ascent and ETF Influence

Bitcoin had a very bullish year, retaking its all-time high of $112,000, set during the 2020 bull run. This massive pump was driven by institutional adoption primarily coupled with mainstream acceptance. The subsequent launch of U.S. spot ETFs in July 2024 turned out to be one of the most bullish catalysts around. Those nine funds combined have roughly $33 billion in AUM. They have indeed exceeded even the growth trajectory of Bitcoin benchmarks throughout their inaugural year. This institutional capital factor has been a major reason for the upsurge in Bitcoin’s price.

Institutional confidence is demonstrably on the rise. From January to June 2025, 54 other private and public companies purchased more than 8,400 BTC, deepening Bitcoin’s emergence as a traditional treasury asset. This discouraging trend shows a disconcerting conviction throughout institutions. To them, Bitcoin is a brand-new and unique asset that functions as a store of value through inflation hedging. Conglomeration of Bitcoin by corporate entities indicates a long-term bullish sentiment towards the cryptocurrency.

Despite the dreamlike atmosphere, macroeconomic factors continue to cast a long shadow over future projections. Strong institutional demand led by ETFs is providing strong price discovery and market momentum. Future growth is on track to achieve even greater targets. In the immediate term, we are targeting $3.85 trillion, with the macro target for Q3’25 between $3.85 trillion and $4.0 trillion. These projections reflect our continuing optimism that the favorable trends that developed in the first half of the year will continue. We expect to see that upward momentum continue into the second half.

Ethereum's Volatility and the Road Ahead

As Bitcoin basked in the glow of a largely unbroken positive trajectory, the Ethereum price ride was much more tumultuous. After starting the year on a massive upswing, climbing to a peak of nearly $3,700 in January, instead, by April, the price had dropped through the floor to below $1,400, a decrease of more than 60%. Despite the positive development for the long-run Ethereum ecosystem, this dramatic price correction sparked fears about Ethereum’s short-term health.

Several factors contributed to Ethereum's volatility. Subsequently, broad market-wide corrections, in conjunction with worries about their scalability and competition from other Layer-1 blockchains, continued to weigh the price down. The good news is that Ethereum developers have been hard at work to mitigate some of these challenges. The Dencun hard fork is scheduled to go live in March of 2024. It will be the launch of EIP-4844, aka “proto-danksharding,” that slashes Layer-2 data costs by 90%. This upgrade, known as the Shanghai upgrade, is intended to enhance Ethereum’s scalability and make it a more appealing ecosystem for developers and users.

Ethereum’s ultimate fate is tied to whether or not it can keep its lead in the race to dominate the smart contract platform ecosystem. Prepare for the long awaited Firedancer class upgrade! Notably, it intends to hit a lofty 100,000 TPS and plans to deploy in H2 2025. If all goes well, this upgrade has the potential to cement Ethereum’s place as the largest and most widely used smart contract platform. If the upgrade is slow to arrive or comes up short on expectations, Ethereum’s opponents could eat the network’s lunch.

Stablecoins Surge and Regulatory Developments

The average supply of stablecoins in circulation soared by about 28% y/y, attesting to their increasing popularity. In 2022, global stablecoin transfer volume reached an astounding $27.6 trillion. This number was more than the total transaction volume of Visa and Mastercard combined in all of 2024. This is an early indicator of the growing utility of stablecoins as a payment and settlement medium.

Regulatory clarity is fast becoming another major force impacting the development of the stablecoin market. Europe’s MiCA “stablecoin” framework is already enacted, meaning any exchange servicing EU residents will need to get a CASP license. This regulatory framework establishes a predictable set of rules for stablecoin issuers and service providers operating in Europe. In the US, there’s significant momentum in favor of integrating stablecoins. The government isn’t just sitting idly by either to craft legislation to regulate US dollar-based stablecoins. Proponents say that legitimizing the asset class is just what it needs. They claim it will prevent competitors—such as the euro—from further encroaching on the US dollar’s dominance of financial systems.

Circle’s IPO on June 5, 2025, will be remembered as a landmark moment for the cryptocurrency industry. The company's decision to go public reflects the growing maturity and acceptance of digital assets in the mainstream financial world. As the prospectus notes, the IPO reflects increasing investment interest for digital assets. Read more about the Chief Product Officer of crypto index provider CF Benchmarks, Sui Chung, on why this interest is coming from all corners. As analyst Jacob Zuller notes, Circle isn’t the only crypto company that could be going public soon. If so, that would be an interesting harbinger of a longer-term, increasing trend of more IPO activity within the crypto sector.

Altcoins and Sector Highlights

In early July, the total market capitalisation of all cryptoassets exceeded $4 trillion USD for the first time. This extraordinary growth was driven almost entirely by a rally in altcoins and the momentum of robust legislative product coming from the US to regulate the space. The alternative market cap’s positive momentum reflects an increasing investor appetite for risk-on plays beyond Bitcoin. Several sectors have shown particular strength:

  • Ethereum, Solana, and Cardano: Driving DeFi-led gains, reflecting the continued growth and innovation in the decentralized finance space.
  • Gaming & NFT tokens: Rebounding on renewed interest, indicating a resurgence in the popularity of blockchain-based gaming and non-fungible tokens.
  • ETF capital: Inflows continuing to support Layer-1 and infrastructure tokens, highlighting the positive impact of institutional investment on the underlying infrastructure of the crypto ecosystem.

The resurgence of the US IPO market, exemplified by Circle's debut, further underscores the growing confidence in the crypto industry. It's important to note that regulatory developments, such as the GENIUS Act and Federal Reserve Chair Jerome Powell's testimony to Congress, may impact Circle's earnings and the broader crypto market.