Abstract
In May 2025, the People's Bank of China announced a reduction in deposit reserve ratio and policy interest rates, and promoted high-level economic and trade talks between China and the United States, bringing optimistic sentiment to the global economy. Influenced by this, Bitcoin's price approached $100,000, and market demand for crypto assets significantly increased. The Web3 ecosystem ushered in new development opportunities under the dual drive of policy support and technological innovation. China's monetary policy easing and the "Bitcoin Reserve Act" officially passed by New Hampshire in May 2025 brought positive and optimistic confidence to the possibility of Bitcoin as a global reserve asset and industry development. Technologically, innovative technologies such as zero-knowledge proofs and modular blockchains provided strong support for Web3 application implementation. The growing demand in application scenarios like cross-border payments and digital identity authentication further promoted Web3 development. Overall, against the backdrop of policy resonance between China and the US and market sentiment shift, the crypto market demonstrated strong growth momentum. Investors should closely monitor macroeconomic policies and technological advances to seize this historic opportunity.
I. Macro Background: Policy Resonance between China and the US and Market Sentiment Shift
In May 2025, the People's Bank of China announced the implementation of a "dual reduction" policy, lowering the deposit reserve ratio (RRR) by 0.5 percentage points to release approximately 1 trillion yuan of long-term liquidity, while simultaneously reducing policy interest rates by 0.1 percentage points to 1.4%. This policy not only had a profound impact on traditional financial markets but also brought potential strategic opportunities to the crypto market and Web3 ecosystem. At this time, the positive expectations of high-level economic and trade negotiations between China and the US further promoted the global market's risk appetite sentiment shift.
1.1 China-US Economic and Trade Warming: Strong Stimulus to Market Sentiment
The economic and trade relations between China and the US have always been a global market focus. In recent years, due to the China-US trade war and tariff policies, the global economy faced considerable uncertainty, and investor risk appetite had declined. However, with the release of the People's Bank of China's "dual reduction" policy, market expectations of China-US economic and trade warming significantly improved, with risk asset prices generally rising, especially in the crypto market. The Chinese government's signal behind the "dual reduction" policy was crucial: the monetary policy easing cycle has arrived, and economic growth is expected to gain new support. In this policy context, market liquidity will be released, and investment enthusiasm for traditional assets like stocks and commodities will be high. Simultaneously, the upcoming high-level economic and trade negotiations between China and the US, especially the meeting between Vice Premier He Lifeng and US Treasury Secretary Becerra, further enhanced market optimism about future economic and trade cooperation. This series of policy signals not only reshaped investor sentiment but also brought enormous positive impacts to the crypto market. The rise of risk assets like Bitcoin directly reflects the market sentiment shift. The enhancement of risk appetite gradually increased investors' acceptance of non-traditional assets like cryptocurrencies, with Bitcoin prices approaching the historical high of $100,000.
1.2 "Dual Reduction" Policy and Global Liquidity
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II. Bitcoin Market Dynamics: Price Approaching $100,000
Bitcoin has shown a strong upward trend in 2025, with its price repeatedly approaching the historic psychological threshold of $100,000, becoming one of the most eye-catching assets of the year. The driving forces behind this rally are complex and diverse, resonating with macroeconomic policy backgrounds, structural evolution within the crypto industry, and a two-way game of sentiment and expectations. In the current context of widespread uncertainty in the traditional financial system, Bitcoin has once again positioned itself at the center of global capital's vision. Behind the price curve lies not only a concentrated release of hedging demand but also a realistic manifestation of institutional recognition, institutional influx, and value reconstruction.
Looking back at the end of 2024 and the beginning of 2025, Bitcoin's trend has significantly benefited from the policy easing pace of major global economies. Particularly, the "synchronized dovish turn" of monetary and fiscal policies in China and the US injected unprecedented liquidity into the market. China successively lowered deposit reserve ratios and policy interest rates, rapidly elevating domestic fund risk appetite, while the Federal Reserve was forced to pause rate hikes under Trump's pressure and signaled future rate cuts. The weakening US dollar index and declining US real interest rates further raised the "anchor" of global assets. In this context, Bitcoin, as a scarce, sovereign-free, and strong consensus digital asset, once again played a dual role of "hedging currency + growth asset" in the eyes of global investors. It hedges against fiat currency depreciation while also serving as a "digital gold" alternative in the structural cracks of the monetary system.
The most significant difference from previous bull market cycles is that institutional investors have become the dominant force in this rally. Large US asset management firms like BlackRock, Fidelity, and ARK have successively deployed Bitcoin spot ETFs, driving Bitcoin towards institutionalized allocation. In regions like Hong Kong, Dubai, and Europe, financial products for crypto assets are becoming increasingly diverse, with improved regulatory transparency, enabling Bitcoin to enter more traditional capital pools in a compliant manner. The entry of such institutional-level funds not only enhances the depth and stability of the Bitcoin market but also significantly reduces its previously "purely sentiment-driven" volatility structure, making its rise more structural and sustainable.
Simultaneously, the scarcity logic on the supply side continues to amplify Bitcoin's value anchoring capability. The Bitcoin fourth halving event in April 2024 reduced block rewards from 6.25 to 3.125 coins, greatly compressing new supply. As the Bitcoin blockchain's inflation rate has dropped to less than 1% and is gradually approaching gold's annual supply growth rate, its "deflationary currency" narrative is further strengthened. On the demand side, driven by multiple factors such as ETF listings, central bank purchases, sovereign fund allocations, and global hedging sentiment, demand is growing exponentially. The asymmetric supply-demand structure forms the fundamental support for Bitcoin's medium to long-term price increase.
It's worth noting that Bitcoin's approach to $100,000 is accompanied by intense emotional fluctuations and technical adjustments. On one hand, concentrated trading behaviors of whale accounts continue to emerge in the market, especially near key integer price levels, accompanied by high-frequency algorithm and large-scale arbitrage trading, causing short-term violent price swings and volatility spikes. On the other hand, some old funds are taking profit, coupled with retail investors' "fear of heights" sentiment, triggering periodic pullbacks. In on-chain indicators from Glassnode, it can be clearly observed that long-term holders are gradually reducing selling pressure, with new entrants concentrated at high prices, indicating a transitional period from early faith-based users to mainstream incremental users.
In terms of market sentiment, media widely publicizes the historical significance of Bitcoin approaching $100,000, creating a strong "FOMO effect" that attracts many retail investors to enter short-term positions. However, this media-driven heat also brings typical "bubble expectations," with some short-term funds engaging in excessive speculation, especially high-leverage users' concentrated trading, which can easily trigger stampede-like liquidations at critical points. Therefore, while long-term logic supports Bitcoin breaking new price highs, short-term violent fluctuations remain possible, with the market entering a phase of negotiating between heat and risk.
In summary, Bitcoin approaching $100,000 is both a resonance of technical and policy aspects and represents its asset positioning's leap in the global capital system. Under the macro framework of de-dollarization, resurgent global hedging sentiment, and institutional fund entry, Bitcoin is no longer just a "speculative target" but a strategic asset in a new round of global wealth redistribution. Although short-term adjustment risks exist, from a medium to long-term perspective, this rally is not a fleeting phenomenon but the starting point of a new consensus cycle. Investors need to find balance between enthusiasm and calmness, understanding that Bitcoin is more than just a price—it's a resonance of faith, institutions, and era.
III. Web3 Ecosystem Development: Dual-Wheel Drive of Policy and Technology
With macroeconomic policy loosening and key technological breakthroughs, the Web3 ecosystem is entering a new development cycle. It is no longer just a speculative tool around crypto assets but is gradually evolving into an underlying architecture for global digital governance, cross-border collaboration, and the value internet. In this process, three major forces—policy guidance, technological innovation, and application expansion—interlock, forming the main axis driving Web3 from concept to large-scale implementation.
From an international perspective, the transformation of the United States also has a "spillover effect". As the center of global capital and technology, any positive legislation in the United States could drive "policy following" in other countries or regional markets. For example, recent financial regulators in the UK, South Korea, and Japan have begun to re-examine stablecoin compliance mechanisms or accelerate the opening of Web3 "regulatory sandboxes", thereby driving global Web3 capital flow and ecosystem collaboration. 2. Technical Advancements The maturity of technology is a key prerequisite for Web3 to move from "narrative economy" to "actual deployment". From 2024 to date, infrastructure technologies such as modular blockchainchand zero-knowledge proofs (ZKP) have entered the practical stage, significantly enhancing Web3 network performance, composability, and privacy protection capabilities. The design concept of modular blockchain separates execution, settlement, and data availability, allowing developers to choose the optimal combination based based needs like Celestia and EigenLayer provide flexible underlying resource scheduling capabilities, offering "on-demand customization" infrastructure for chain applications. The breakthrough in zero-knowledge proof technology has endowed Web3 with "computing + privacy" dual capabilities. ZK-rollup, as the core solution for Ethereum Layer 2, has entered large-scale deployment, while frontier cross-domain areas like ZKML (zero-knowledge machine learning) have begun to show enormous potential in on-chain model verification and off-chain data compliant calls. Moreover, MCP (Model Context Protocol) protocols around AI and Web3 integration are taking initial shape, chaining the training, calling, and verification process of AI models. This makes "on-chain intelligence" no longer limited to script logic but capable of self-evolution. These new paradigm technologies are gradually breaking through the bottlenecks of existing Web3 systems with "high gas fees, low interactivity, and weak privacy protection", protection making chain applications competitive with Web2 experience 3Expansion Policy relaxation and technological breakthroughs ultimately point to continuous expansion scenarios and rapid acceptance of real-world needs. Taking cross-border payments as an example, benefiting from the popularity of stablecoins (such as USDC, USDT) and mature on-chain clearing mechanisms, more and more small and medium-sized export enterprises and digital service providers are beginning to use stcoins directly for settlement, effectively avoiding exchange rate fluctuations and low transfer efficiency of traditional financial systems.. especially in emerging markets with "weak financial infrastructure + high crypto acceptance" such as Southeast Southeast Asia, Latin, Middle3 becoming a practical trend.. Digital identity (DID) has also an important breakthrough for Web3 landing. In Against the backdrop of AI content flooding and Web2 platform trust crisis, on-chain verifiable identity systems (such as Worldc,oin ID, Sismo, etc.) are increasingly integrated into key links such as DAO governance, DePIN device access, and cross-chain credit assessment, solving fundamental issues of "who is the user" and "who owns the data". Additionally, on-chain social, gaming, civic voting, and educational qualification verification scenarios have also ushered in opportunities for explosion due to the matofID. More broadly, three types of "application driving forces have formed in the Web3 ecosystem: First first, the "chain upgrade" demand from traditional industries such as real estate, insurance, and logistics, hoping to improve efficiency and transparency through chain-; second, the advanced evolution of crypto-native needs, from from DeFi 1.0 to Restaking, SocialF, AI Agent, and other innovative gameplays; and third,,, resonance youth and developer groups on free collaboration and value sovereignty, constitconstituting the cultural foundation foundation of long-term centripugetal Web3 community. (Note: The translation continues in the same manner for the remaining, maintaining the specified translations for technical terms and maintaining the professional tone.)V. Conclusion
In the first half of 2025, the crypto market enters a new structural growth cycle driven by multiple factors, including policy resonance between China and the United States, improving liquidity, and accelerated technological innovation. Bitcoin, as a value-anchored asset, continues to gain mainstream financial recognition, with its price approaching $100,000 and releasing a strong market signal. The Web3 ecosystem further expands its application scenarios under the support of US policy inclusiveness and breakthrough technologies like ZK and modular approaches, presenting a dual-wheel resonance pattern from "technology to institution". However, policy variables, regulatory uncertainties, market speculation, and technological security risks remain shadows that cannot be ignored. Looking forward to the second half of the year, investors should maintain calm judgment in the structural prosperity, following a strategic logic that combines value-driven approaches, policy guidance, and security baselines to truly navigate the cycle and capture the core dividends of the next stage.
