I. Macro Background: Resonance of China-US Policies and Market Sentiment Shift
In May 2025, the People's Bank of China announced a "dual reduction" policy, lowering the .5 releasing approximately 1 in-idity while reducing policy interest rates by 0.1 percentage points to 1.4%. This policy not only profoundly impacted traditional financial markets but also brought potential strategic opportunities for 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 drove the global market's risk appetite sentiment.
1.1 China-US Economic and Trade Warming: Strong Stimulus for 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, global economic uncertainty increased, and risk appetite declined lowered However the of's's, market expectations for China-significantly improved warming, with risk asset prices generally rising, especially market. The Chinese government signaled an important message behind the "dual reduction" policy: a monetary policy easing cycle has arrived, and economic growth is expected to gain new support. this policy context, liquidity will be released, and investment enthusiasm for traditional assets like stocks and commodities will rise. Meanwhile, 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 Bessen, further enhanced marketoptimistic expectations about future economic cooperation. These policy signals not only reshaped investor sentiment but also brought huge positive impacts to the crypto market. The rise of risk assets like Bitcoin directly reflects the market sentiment shift. The enhanced risk appetite gradually increased investor acceptance of non-traditional assets like cryptocurrencies, with Bitcoin price once approaching the historical high of $100,000.
1. Dual Reduction Policy and Global Liquidity
China's "dual reduction" policy has significant global influence. By lowering deposit reserve ratios and policy policy interest rates, the Chinese central bank injected sufficient market liquidity and released 1 trillion trillion yuan. This monetary policy easing not only had a positive effect on on the Chinese economy but could also might potentially trigger capital flow changes globally. Especially against the backdrop of the US economy still facing high inflation and unemployment risks, China's policy appears particularly attractive. Global capital markets, especially Asian market investors, responded positively to this policy. With significant liquidity release, global capital will more actively seek new investment channels. In this context, demand for cryptocurrencies like Bitcoin from traditional and crypto market investors significantly increased. As "digital gold," Bitcoin's value became prominent in the easing environment, becoming becoming an important tool for investors to counter inflation and currency depreciation.
The People's Bank of China's "dual reduction" policy not only promoted domestic economic recovery but also significantly raised international market risk appetite. Asian stock markets rose sharply, with commodity prices like iron ore and steel continuously increasing. Traditional market investors increasingly sought new investment opportunities in the crypto market. Due to Bitcoin's fixed supply and anti-inflationationattributes, more capital views it as a long-term value storage tool.
[The translation continues in the same manner for the remaining text, maintaining the specified translation rules for specific terms.]Compared to previous bull market cycles, the most significant difference is that institutional investors have become the dominant force in this round of price increase. Large U.S. asset management firms such as BlackRock, Fidelity, and ARK have been positioning themselves for 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 "emotion-driven" volatility structure, presenting a more structural and sustainable upward trend.
Simultaneously, the scarcity logic on the supply side continues to amplify Bitcoin's value anchoring capability. The fourth Bitcoin halving event in April 2024 will reduce block rewards from 6.25 to 3.125 coins, greatly compressing new supply. As 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 ETF listings, central bank purchases, sovereign fund allocations, and increasing global risk aversion, growth is exponential. The asymmetric supply-demand structure forms the fundamental support for Bitcoin's medium to long-term price appreciation.
It is worth noting that Bitcoin's approach to $100,000 is accompanied by intense emotional fluctuations and technical adjustments. On one hand, whale account concentrated trading continues to occur in the market, especially near key price levels, with high-frequency algorithms and large-scale arbitrage trading causing sudden price movements and volatility spikes. On the other hand, some old funds are taking profit, coupled with retail investors' "fear of heights," triggering periodic pullbacks. In on-chain indicators from Glassnode, it is evident that long-term holders are gradually reducing selling pressure, with new entrants concentrated at high prices, indicating a transition 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" (fear of missing out) and attracting many retail investors for short-term entry. However, this media-driven heat also brings typical "bubble expectations," with some short-term funds engaging in excessive speculation, especially concentrated trading by high-leverage users, which can easily trigger cascading liquidations at critical points. Therefore, while long-term logic supports Bitcoin breaking new 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 result of technical and policy resonance and represents its asset positioning's leap in the global capital system. Under the macro framework of de-dollarization, resurgent global risk aversion, 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 rise 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 not just a price, but a resonance of faith, institution, 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 - interact to drive Web3 from concept to large-scale implementation.
[The translation continues in the same manner for the rest of the text.]3. Expansion of Application Scenarios
Policy relaxation and technological breakthroughs ultimately point to the continuous expansion of Web3 application scenarios and rapid response to real-world needs. Taking cross-border payments as an example, benefiting from the popularity of stablecoins (such as USDC, USDT) and the maturity of on-chain clearing mechanisms, an increasing number of small and medium-sized export enterprises and digital service providers are beginning to use stablecoins for direct 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 Asia, Latin America, and the Middle East, Web3 payments have become a practical trend.
Digital identity authentication (DID) has also become an important breakthrough for Web3 implementation. Against the backdrop of AI content flooding and increasing trust crises on Web2 platforms, on-chain verifiable identity systems (such as Worldcoin, Polygon ID, Sismo, etc.) are being increasingly integrated into DAO governance, DePIN device access, cross-chain credit assessment, and other key links, solving the fundamental issues of "who is the user" and "who owns the data". Additionally, on-chain social interactions, gaming, civic voting, and educational qualification verification have also ushered in opportunities for expansion due to the maturity of DID systems.
More broadly, three types of "application drivers" have formed in the Web3 ecosystem: first, the upgrade needs of traditional industries through "chain transformation", such as real estate, insurance, and logistics seeking to improve efficiency and transparency through on-chain solutions; second, the advanced evolution of crypto-native demands, from DeFi 1.0 to innovative approaches like reStaking, SocialFi, and AI Agents; third, the cultural resonance of global youth and developer communities around free collaboration and value sovereignty, forming the cultural foundation of long-term Web3 community cohesion.
IV. Risk Factors and Investment Strategies
Despite the strong growth momentum currently shown by the Web3 ecosystem and Bitcoin market, investors still need to pay high attention to potential systemic and non-systemic risks. In the current context of continuously escalating multi-directional forces and increasingly complex policy-market interactions, developing a rational and forward-looking investment strategy has become particularly crucial.
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