In the post-bull market era, the shadow of the trade war is gradually fading, and it may rebound in the second half of the year

Chapter 1: The Global Crypto Market Landscape in the Post-Bull Era

Since the first half of 2025, the crypto market has entered a "post-bull market" stage, showing the characteristics of high volatility and structural differentiation as a whole. Although Bitcoin managed to hit new highs driven by the halving cycle, it immediately entered a correction channel, coupled with the Fed's monetary policy not turning accommodative as expected and the intensification of trade tensions between China and the United States, which once again shrouded the crypto market in the shadow of macro uncertainty.

The market during this period is not a bear market in the traditional sense, nor does it continue the massive rally in a bull market, but is in a transition zone after the cycle high. Risk appetite has declined and capital activity has weakened, but there has not been a systemic liquidity crisis similar to that seen in 2022. Core assets such as Bitcoin and Ethereum still have institutional allocation, and on-chain activity has declined slightly, but has not deteriorated significantly. At the same time, some new narrative sectors, such as AI chain, Restaking, and meme coin ecology, continue to attract capital games, presenting a situation of "strong themes in a weak market".

From a macro perspective, in the first half of 2025, the global economy will be in a complex state of "unstable disinflation and pressure on growth". The Fed maintains a cautious stance in a high interest rate environment, the market is divided on whether to start cutting interest rates this year, and uncertainty about the path of interest rates continues to suppress the upside of risk assets. A new round of trade frictions between China and the United States over new energy, high-tech, and digital infrastructure has become a new variable. Crypto assets are not directly involved, but geopolitical risks increase market volatility and pose additional disruptions to investor sentiment. However, it is worth noting that the crypto industry has become significantly more global and resistant to interference than in the past. In 2024, many jurisdictions such as Hong Kong, Japan, and the United Arab Emirates will successively release supportive policies to promote the launch of crypto ETFs, the implementation of stablecoin regulation, and the accelerated operation of Web3 sandboxes, providing a clearer path for traditional funds to participate in compliance. This international support posture partially hedges the negative impact of the tightening of US regulations, and also makes the overall market ecology present a pattern of "local downturn and global equilibrium".

On the whole, the "post-bull market" is not the end of the bull market, but has entered a new stage - the market is more focused on value judgments, users are more focused on practical scenarios, and funds are more long-term. In the short term, macro variables will still dominate market expectations, but in the medium to long term, the market is in a critical period of transition to the next round of technology-application resonance cycle. Only in the diversified evolution of the global pattern, looking for sectors and targets for deterministic growth is the core logic of the "post-bull market era".

Chapter 2: The Gradual Decline of the Shadow of the Trade War and the Macroeconomic Implications

In the first half of 2025, the resurgence of trade frictions between China and the United States has become an important disruptive factor in the global market, especially in the context of the approaching US election and the intensification of policy games, involving many sensitive areas such as new energy, AI chips, key rare earths, and digital technology export controls. However, compared with the peak of the trade war in 2018~2020, the current round of trade disputes is more "symbolic", and its actual economic impact and long-term structural impact are relatively mild, showing the characteristics of gradual "decline".

On the one hand, the new round of tariffs in the United States is clearly limited by domestic inflationary pressures and voter interests. Against the backdrop of high interest rates and high prices, a large-scale increase in tariffs on Chinese goods will further push up import prices and weaken the momentum of consumption recovery, so the Biden administration's use of tariff tools in an election year is more of a tactical "statement" rather than a comprehensive escalation at the strategic level. China, on the other hand, continued to exercise rational restraint and was guided by stabilizing exports and attracting foreign investment, and did not carry out large-scale reciprocal countermeasures, leaving the overall trade friction in a state of "limited confrontation".

From the perspective of macro data, although the disturbance of Sino-US trade friction has triggered an increase in short-term risk aversion, it has not led to a reassessment of systemic risk in the global financial market. The S&P 500 and Nasdaq indices stabilized quickly after the shock, and the U.S. dollar index and gold maintained strong shocks, indicating that market participants' broad expectations for the current round of trade disputes have been reflected in prices, and the crypto market has also recovered quickly after a brief decline, and the overall resilience has increased significantly compared with the past.

For the crypto market, the indirect impact of the trade war is mainly reflected on three levels:

First, short-term contraction in risk appetite. Trade tensions can temporarily dampen market confidence and trigger the strengthening of safe-haven assets (e.g., gold, U.S. Treasuries), while highly volatile assets such as cryptocurrencies can easily become "liquidity reservoirs" for sell-offs. Second, cross-border capital flows are deformed. Trade and technology sanctions, often accompanied by tighter financial scrutiny and cross-border payment regulation, have led to the on-chain transfer of some funds through stablecoins, BTC and other means, stimulating the increase in on-chain trading volume and driving the interest in crypto assets in some Asian markets. Third, the medium- to long-term de-dollarization trend has intensified. Trade frictions have strengthened emerging market countries' doubts about the stability of the dollar system, and more and more countries are exploring cross-border clearing paths for digital currencies and tokenized assets, which has also indirectly enhanced the strategic position of public chains such as Ethereum in the global financial infrastructure.

It is worth noting that since Q2 of 2025, as global inflation gradually falls, central banks in many European and Asian countries begin to brew interest rate cuts, the Fed's shift expectations are gradually heating up, and trade negotiations are returning to rationality, the sensitivity of the crypto market to geopolitical frictions is decreasing. The return to stable net inflows into Bitcoin ETFs suggests that institutional investors have come to view trade risk as a "background fluctuation" rather than a decisive variable.

Overall, although the current round of trade war has caused emotional disturbances, its actual impact on the crypto market has been significantly weakened. The global macro environment is undergoing a transition from the "tail end of tightening" to a "moderate recovery", and the risk pricing logic of the crypto market is also transitioning from "geopolitical tensions" to "interest rate inflection point". At this stage, the importance of macro impact cannot be ignored, but the real driving force of the market may be quietly returning to the internal cycle of technological innovation and on-chain ecological evolution.

Chapter 3: Potential drivers of the market rebound in the second half of the year

After experiencing the suppression of factors such as the global macro environment, trade frictions, and crypto regulatory policies in the first half of 2025, the crypto market ushered in a series of rebound signals. The rebound potential of the market in the second half of the year is mainly due to the following key drivers, which work together to bring the possibility of recovery to the crypto market.

3.1. Changes in the interest rate cycle and a rebound in risk appetite

In the first half of 2025, the global economy will gradually get rid of the high inflation situation after the epidemic, and major central banks will gradually adjust their monetary policies, especially the Federal Reserve and the European Central Bank will slow down the pace of interest rate hikes, and the market is widely expected to start the interest rate cut cycle in the second half of the year. This trend has a particularly far-reaching impact on the crypto market. First, a low-interest rate environment often reduces the rate of return on traditional financial assets, further driving capital flows into high-risk, high-reward asset classes. Second, the interest rate cut makes it possible for institutional investors and high-net-worth individuals to re-increase their allocation to crypto assets while seeking higher returns, which in turn will drive up the prices of major crypto assets such as Bitcoin and Ethereum.

In addition, as the U.S. government and other global economies seek to stimulate economic vitality through monetary easing, the crypto market as an "alternative investment asset" may become part of the capital market. This will attract more institutional capital and retail investors to participate.

3.2. Decentralized finance (DeFi) continues to innovate and expand

Although decentralized finance (DeFi) has undergone complex market adjustments in the past two years, with the continuous maturity of technology and the expansion of application scenarios, the DeFi ecosystem is expected to usher in a new flashpoint in the second half of 2025. With the continuous advancement of Layer 2 solutions, cross-chain interoperability, and privacy-preserving technologies, DeFi has achieved significant improvements in scalability, cost-effectiveness, and security, attracting more institutional participants.

Especially in the field of decentralized lending, derivatives trading, and synthetic assets, the DeFi market is gradually beginning to penetrate the "gray area" of traditional financial markets. For example, with the innovation of DeFi protocols, institutional funds can be hedged through on-chain derivatives, and investors can participate in the market in a more flexible and low-cost way. This development potential will help drive a structural rebound in the crypto market in the second half of the year.

3.3. Continued entry of institutional investors

The entry of institutional investors is undoubtedly one of the most critical factors in the maturation of the crypto market. From Bitcoin ETFs to ETH futures, to more and more institutional funds gradually increasing their holdings of crypto assets, the inflow of institutions has brought more capital and a robust risk management mechanism to the market. With the further clarification of the regulatory framework and the gradual opening of the capital market, more and more traditional financial institutions will participate in the investment and custody of crypto assets.

In addition, some large enterprises (such as payment giants, Internet platforms, investment banks, etc.) have gradually recognized the strategic significance of crypto assets in diversified asset allocation. This not only means that the capital pool of the crypto market continues to expand, but also indicates that the crypto market is gradually moving towards the mainstream of the traditional financial market. In the second half of the year, the momentum of the market rebound will be further strengthened as more institutions recognize and invest in crypto assets.

3.4. The breakthrough and maturity of the application of blockchain technology

The long-term development of the crypto market depends not only on price fluctuations, but also on the practical application of blockchain technology. In 2025, significant progress has been made in the application of blockchain in various fields such as finance, supply chain, healthcare, and copyright management. Especially in the application of cross-border payments, smart contracts, and decentralized autonomous organizations (DAOs), blockchain technology is constantly breaking down the barriers of traditional industries and promoting the scale and maturity of the crypto asset market.

The success of these technology applications, especially in the fintech and business sectors, will further boost the demand for crypto assets. In the second half of 2025, as blockchain technology continues to make breakthroughs, its role in the real economy will become more prominent, helping the recovery and rebound of the crypto market.

Through the superposition of the above factors, the crypto market has a strong rebound potential in the second half of 2025, driven by multiple positive factors. The recovery in the market is likely to be more significant, especially with the support of institutional investors, technological advancements, and the global economy's shift to monetary easing, which is expected to usher in a broader space for growth.

Chapter 4: The Divergence Trend of Major Chains and Assets

4.1 The "safe-haven properties" of Bitcoin and Ethereum are redefined

In this round of macro turmoil, Bitcoin has once again been defined by the market as "digital gold" and an inflation-resistant asset. Especially in the context of widening monetary policy divergences and frequent geopolitical conflicts between global central banks, BTC has shown relative resilience.

Ethereum is gradually becoming synonymous with "digital financial platform". In the context of the enhanced L2 scalability, the maturity of the restaking mechanism, and the explosion of the DA (data availability) layer, the value logic of the Ethereum ecosystem has gradually shifted from "gas fee income" to "on-chain economic operation infrastructure". In the future, Bitcoin will be more of a global reserve asset, while Ethereum may host more Web3 infrastructure and financial innovation.

4.2 Meme experiments with Solana and "high-performance chains".

The Solana chain experienced an explosion of meme boom and on-chain innovation from the end of 2023 to the beginning of 2024. High TPS, high user engagement, and low gas fees make it a popular public chain for meme speculation and emerging DApp deployment. However, with the adjustment of the market, on-chain funds and projects have gradually diverged, and Solana projects with "substantial ecology" (such as Jupiter and Tensor) have begun to widen the gap with pure meme coins, and Solana has entered a new stage of ecological in-depth construction. Similarly, public chains such as Base, Sui, and Aptos are all facing the test of ecological precipitation after the peak period of hype.

4.3 Layer2 and cross-chain technology: multi-chain collaboration has become a trend

The Ethereum Layer2 solution, represented by Arbitrum and Optimism, has significantly improved transaction efficiency and reduced costs, and the on-chain interactive experience is close to that of a "centralized app". With the further technical maturity of ZK Rollup (such as zkSync and Starknet), the synergy effect of multi-chain coexistence + cross-chain liquidity protocols (such as LayerZero and Wormhole) will continue to increase. In the future, users will no longer focus on "which chain it is on", but on "whether it is easy to use, safe, and liquid enough". This brings huge room for the development of cross-chain assets, unified wallets, and aggregated liquidity protocols.

Overall, in the second half of 2025, the divergence of assets and chains in the crypto market will be more pronounced. With the advancement of technology and changes in market demand, multiple public chains will compete for market share, and the application scenarios of various digital assets will become increasingly rich. The diversification trend of the crypto market has not only promoted the diversification of different asset classes, but also accelerated the maturity and improvement of the overall structure of the market.

Chapter 5: Outlook and Strategic Recommendations - Can the Second Half of the Year usher in a new round of market?

As 2025 unfolds, the crypto market has experienced early turmoil and adjustments, and market participants' expectations for the future have gradually shifted in a positive direction. Looking forward to the second half of the year, whether the crypto market can usher in a new round of market rebound depends not only on macroeconomic changes, but also closely related to the progress of blockchain technology, market liquidity and the adjustment of the policy environment. Against this backdrop, we propose the following strategies to help market participants capitalize on future investment opportunities.

5.1. Key drivers: macroeconomics, technological progress and financial flows

To determine whether the crypto market can usher in a new round of market rally, it is first necessary to identify several key drivers:

Macroeconomic upturn: As the global economy gradually recovers from the post-pandemic recession, monetary and fiscal policies in various countries may also see accommodative changes. Especially in the United States and Europe, loose monetary policy is likely to allow more money to flow into the crypto market. In addition, with the uncertainty of global financial markets and the increased volatility of traditional assets, more and more investors are looking to crypto assets as a safe-haven option.

Technological innovation and network upgrades: The continuous innovation of blockchain technology, especially the technical upgrades of public chains such as Ethereum 2.0, Solana and Polkadot, will bring higher transaction efficiency and lower costs to the market, which will enhance the attractiveness of crypto assets. At the same time, the maturity of Layer 2 technology, the strengthening of cross-chain protocols, and the continuous development of smart contracts and decentralized finance (DeFi) may become an important technical force driving the market rally.

Liquidity and Institutional Participation: As institutional investors gradually enter the crypto market, the liquidity of the market will also increase. The participation of institutional funds not only provides deeper market liquidity, but also increases the stability and maturity of the market. Especially after the launch of financial derivatives such as ETFs and futures, more and more traditional investors have begun to participate in them, which has injected new vitality into the crypto market.

5.2. A key factor in the rebound in the second half of the year

Although the outlook for the crypto market is promising, whether the second half of the year will usher in a new round of market rebound still depends on the superposition of several key factors:

Policy Clarity: Currently, there is still uncertainty about the regulatory policy of the crypto market around the world. While some countries have started to provide a clear regulatory framework for the crypto market, others are still on the sidelines. Further regulatory clarity, especially in innovative areas such as stablecoins, DeFi and NFTs, will have a profound impact on the market. If major economies such as the United States, Europe, Asia and other regions introduce more friendly policies and provide positive guidance on crypto assets, market sentiment and capital inflows will improve significantly.

Improvement in market sentiment: The recovery of crypto market sentiment in the second half of 2025 will be an important prerequisite for the market to rebound. Compared to 2024, market sentiment has gradually shifted from pessimistic to neutral, and investors' acceptance of crypto assets has gradually increased. With the improvement of the macroeconomic environment and the participation of more investors, market sentiment is expected to improve further, which in turn will trigger capital inflows. This process is likely to be gradually realized with the support of technological innovation and policies, which will eventually drive up market prices.

Push by large capital: The involvement of large capital, especially by institutional investors, will be another key factor in the rebound of the crypto market. In the second half of 2025, with the participation of more financial institutions and large capital, the liquidity and liquidity scale of the market will increase significantly. Especially with the vigorous development of derivatives markets such as ETFs and futures, the volatility of the market may be reduced, and the inflow of funds and the stability of the market will be further enhanced.

Maturity of decentralized finance (DeFi): As an important part of the crypto market, decentralized finance (DeFi) is likely to usher in further development in the second half of 2025. The improved security, liquidity, and user experience of DeFi protocols will attract more investors and developers to participate. The expansion of DeFi platforms and decentralized financial services will bring new impetus to the entire crypto market, especially in the areas of cross-chain trading and DeFi derivatives innovation.

5.3. Strategy recommendations

In the face of a possible rebound in the crypto market in the second half of 2025, investors should develop investment strategies accordingly based on the potential and risks of the market. Here are a few possible strategies to suggest:

Stick to long-term investments in mainstream assets: Despite the large number of emerging chains and assets in the market, Bitcoin and Ethereum are still the "workhorses" of the crypto market. As digital gold, Bitcoin's status as a safe-haven asset will not be easily shaken. Ethereum, on the other hand, continues to dominate the development of smart contracts and decentralized applications (DApps). Holding Bitcoin and Ethereum remains a sound strategy for long-term investors, especially when market sentiment improves, and the potential for returns on mainstream assets remains substantial.

Focus on innovation chains and emerging assets: For investors with a high risk appetite, consider investing in public chains and assets with technological innovation and high growth potential. For example, chains such as Solana, Avalanche, and Polkadot are attracting more and more attention from developers and investors. These chains offer different technical solutions than Ethereum, with higher transaction efficiency and lower transaction costs, so their market performance may exceed expectations, especially in applications such as DeFi and NFTs.

Strengthen the allocation of stablecoins and DeFi assets: Stablecoins and DeFi assets, as an important part of the crypto market, also provide new investment opportunities for investors. The application scenarios of stablecoins will be further expanded and become an important medium for cross-chain transactions and decentralized finance. DeFi protocols and assets may become new market growth points, and investors can consider allocating some high-quality DeFi tokens to share the growth dividends of the DeFi ecosystem.

Pay attention to policy developments and regulatory risks: Investors should always pay attention to policy changes in the global crypto market, especially for stablecoins, DeFi, and NFTs. The support and constraints of policies will directly affect the inflow and direction of capital development in the market. Actively monitoring regulatory developments and quickly adjusting investment strategies after policy clarity will help avoid policy risks and seize potential investment opportunities.

To sum up, the potential for the crypto market to rebound in the second half of 2025 is still very high, but whether it can usher in a new round of market depends on the intertwined influence of several factors. From macroeconomic recovery, technological advancements, liquidity to policy clarity, all factors are powering the recovery of the crypto market. Against this backdrop, investors should be flexible in adjusting their strategies and continue to monitor market changes and potential opportunities.