HTX Ventures: Crypto Market Enters a Policy-Driven New Cycle, Legalization and Dollarization Become the Main Themes

Against the backdrop of a continuously evolving global macro environment, the crypto industry is undergoing a new round of structural transformation. HTX Ventures, the global investment arm of Huobi HTX, recently released its latest report titled "Industry Insight: The Crypto Wave and Potential Opportunities in the Macro Game," providing in-depth analysis of the core changes and potential opportunities in the crypto market during the current cycle.

Currently, Bitcoin is gradually moving away from its traditional characterization as "digital gold" and aligning more with the trend of risk assets. The policy support for the crypto industry from the Trump administration has also transformed it from a regulatory grey area to a "satellite asset" with USD liquidity overflow. The trader structure has fundamentally shifted from being retail-dominated to institutionally driven, further accelerating the integration of crypto assets into the mainstream market system.

The core driver of this cycle is no longer internal industry innovation but rather the legitimization and dollarization process of the crypto industry. In contrast to the 2020 DeFi boom or the 2017 ICO craze, the crypto industry has become a technology innovation sector actively promoted by the U.S. government in this cycle. The concept of Bitcoin as a strategic reserve further reinforces the industry's potential demand base, injecting new growth momentum into the market.

The trend of dollarization in the crypto industry is deepening, serving as both a key engine driving industry growth and a potential source of risk. While Bitcoin has demonstrated its capital hedging function independent of the traditional financial system during the Russia-Ukraine conflict, its price has recently synchronously declined with risk assets during geopolitical events, reflecting its close connection to macro liquidity.

The Bitcoin market is now deeply controlled by institutional investors. The CME futures contract open interest has surged after the approval of a Bitcoin spot ETF, consistently exceeding $10 billion. Institutions utilize spot ETFs and futures basis arbitrage to magnify returns with high leverage, amplifying Bitcoin price volatility into a three times leveraged version of the Nasdaq index. This structure implies that during periods of abundant liquidity, Bitcoin's price increase will outperform tech stocks, while during liquidity tightening phases, Bitcoin's price drop will be more severe.

On the policy front, the U.S. has made substantial progress in advancing the compliance process for the crypto industry. The FIT21 bill has clarified the regulatory boundaries of digital assets, bringing tokens with a high degree of decentralization under CFTC oversight and establishing a 3 to 5-year "safe harbor" mechanism to encourage compliance transformation for new projects. Additionally, the repeal of SAB 121 has broken down the policy barriers for banks to custody crypto assets, with traditional financial giants such as JPMorgan Chase and Citigroup entering the crypto asset custody business. It is projected that by the end of Q2 2025, the AUM will exceed $500 billion.

In terms of regulatory developments, crypto-friendly Paul S. Atkins has assumed the role of SEC Chairman, and the new leadership is pushing for adjustments to the Howey test standard to reduce the proportion of tokens classified as securities, and to expand the range of assets eligible for ETFs. This series of reforms is unlocking more potential growth space for the crypto market.

A capitalization wave for crypto companies is surging, with top crypto companies such as Kraken and Fireblocks preparing to go public, with valuations reaching around $20 billion and $9 billion respectively. At the same time, several top Wall Street investment banks have established crypto investment departments, and sovereign wealth funds are also indirectly positioning themselves in Bitcoin through strategic technology company holdings.

Simultaneously, the U.S. is contemplating a Federal Bitcoin Reserve plan, proposing to purchase up to 200,000 bitcoins annually over the next five years to establish a distributed secure storage network, aiming to use this as a long-term national strategic asset. Although there are still challenges in terms of legislation and funding sources, discussions have already placed Bitcoin at the forefront of national asset management.

Stablecoin legislation is also advancing rapidly. In early 2025, Trump signed an executive order encouraging the development of compliant, U.S. dollar-backed stablecoins, while prohibiting the development of central bank digital currencies (CBDCs) to protect market freedom and individual privacy. The rapid enactment of relevant bills will accelerate the integration of the traditional financial system with the crypto market, paving the way for compliant issuance and use of stablecoins.

Against this backdrop, HTX Ventures has conducted an analysis of key economic indicators in the U.S. At a macro level, inflation data is under control, but there are no clear signs of economic recession yet. Non-farm payroll and unemployment rate indicators show that the economy's resilience remains, with the Federal Reserve expected to consider rate cuts only after significant economic downturn pressures emerge. Prior to any rate cuts, the U.S. stock market and the crypto market still face interim volatility risks due to liquidity tightening.

The passage of the "Beautiful Great Bill" budget resolution will continue the 2017 tax cut policy, while adding tax incentives for the service industry and the middle-to-low-income groups. At the same time, raising the federal debt ceiling and adjusting fiscal expenditures mean that future U.S. fiscal policy will remain loose, potentially injecting more liquidity into the capital markets.

Overall, the crypto industry is playing an increasingly important role in the global macro game. Policy dividends, dollarization trends, and institutionalization processes constitute the three pillars of this cycle. In future developments, the market performance of crypto assets will be more closely intertwined with the global macro environment, geopolitical dynamics, and monetary policy trends, presenting new cyclical characteristics and investment opportunities. At the same time, with ongoing policy relaxation, the future will undoubtedly give rise to a truly endogenous blockchain innovation narrative, injecting unprecedented vitality into the industry.

In this wave of transformation, HTX Ventures will continue to insight global macro trends, explore potential opportunities, firmly support the compliance and innovative development of the crypto industry, and help build a more open, transparent, and sustainable digital asset ecosystem.

About HTX Ventures

HTX Ventures is the global investment arm of Huobi HTX, integrating investment, incubation, and research to identify the world's most outstanding and brightest teams. As an industry pioneer, HTX Ventures has over 11 years of experience in blockchain building, excelling at identifying cutting-edge technologies and emerging business models in the field. To drive growth within the blockchain ecosystem, we provide comprehensive support to projects, including financing, resources, and strategic advice.

HTX Ventures currently supports over 300 projects spanning various blockchain sectors, with some high-quality projects already trading on Huobi HTX. Additionally, as one of the most active FOF funds, HTX Ventures invests in 30 top funds globally and partners with leading global blockchain funds such as Polychain, Dragonfly, Bankless, Gitcoin, Figment, Nomad, Animoca, and Hack VC to collectively build the blockchain ecosystem.

For investment and partnership inquiries, please feel free to contact VC@htx-inc.com

This article is contributed content and does not represent the views of BlockBeats.

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