In the midst of frenzy and clarity, reshaping industry value.
Author: Revc, Golden Finance
The Game and Fission of the Crypto Market in February 2025
The crypto market after Trump's re-election is both a carnival of policy dividends and a testing ground for endogenous risks. With key economic data landing in February 2025, adjustments in regulatory frameworks, and accelerated technological iterations, the market continues to oscillate between the tension of "optimists moving forward" and "pessimists warning." This article analyzes the current market dynamics from multiple perspectives and explores its deeper logic.
1. Policy Shift: The Tug of War Between Liberalization Promises and Implementation Risks
Optimist Narrative: The Trump administration's "crypto utopia" policy is advancing rapidly, with SEC Chairman Gary Gensler resigning, Bitcoin ETF cumulative managed assets surpassing 1.1 million BTC (BlackRock's IBIT accounts for 45%), and the U.S. Bitcoin reserve plan progressing in Texas and Pennsylvania, pushing Bitcoin prices above $100,000.
Pessimist Concerns: The national Bitcoin reserve plan faces high volatility risks, and with a federal deficit reaching $1.8 trillion, the coordination resistance between Congress and the Federal Reserve may lead to policy execution gaps.
February New Developments:
- SEC shifts to "guidance-based regulation": New Chairman Paul Atkins promotes ten priorities for the cryptocurrency working group, clarifying the securities nature of tokens and exploring compliance paths, while emphasizing a crackdown on fraudulent activities.
- FIT21 Bill Progress: If passed by the Senate, it will delineate the regulatory boundaries between the SEC and CFTC, but Republican Senator Cynthia Lummis warns that "the bill needs to balance innovation and investor protection."
2. Meme Coin Frenzy: Political Tokenization and Bubble Risks
Optimist Logic: The Trump Meme coin TRUMP's market cap once exceeded $15 billion, with trading volume on the Solana chain surging (100 million active addresses), attracting retail investors and expanding the user base.
Pessimist Skepticism: After its launch, TRUMP coin plummeted by 60%, with Melania coin diverting funds, and former Coinbase CTO denouncing it as a "zero-sum lottery," while industry leaders warn of a bubble burst reminiscent of the FTX trust collapse.
February Data Validation:
- Meme coin trading share rises: It accounts for 11% of the trading volume of the top 300 crypto assets (excluding stablecoins), but speculation leads to increased market volatility, with $346 million in liquidations within 24 hours.
- WLFI Asset Allocation Controversy: WLFI transferred $307 million in assets to Coinbase Prime, increasing holdings in ETH and WBTC to hedge against volatility, but the token swap agreement is questioned for using political influence to lock in liquidity.
3. Macroeconomic Linkage: Dual Impact of Non-Farm Data and Debt Crisis
Optimists Anticipate: In January 2025, the U.S. non-farm payrolls added 143,000 jobs, below the expected 169,000, with the unemployment rate dropping from 4.1% to 4%. Within an hour of the non-farm employment data release, Bitcoin retraced to around $100,000, but due to inflation concerns and tariff threats, the three major U.S. stock indices collectively fell overnight, with Bitcoin retreating to around $96,000.
During a meeting with Japanese Prime Minister Shigeru Ishiba, Trump stated that he would announce "reciprocal tariff" measures next week, potentially escalating the trade war. Nationwide Chief Strategist Mark Hackett pointed out that the market initially focused on non-farm employment data, but Trump's tariff announcement became the new focal point. Despite slowing job growth, the low unemployment rate may lead the Federal Reserve to maintain interest rates, with the market expecting only one rate cut this year.
Pessimists Warn: U.S. national debt surpasses $36 trillion, facing downgrade risks, and if a U.S. debt crisis triggers global liquidity tightening, the crypto market may collapse in sync with risk assets.
February Market Resilience Test:
- Dollar Hegemony Game: The dollar index rises to 108, reinforcing Bitcoin's "digital gold" narrative, but WLFI sells part of its ETH to lock in profits, exposing short-term speculative attributes.
- Federal Reserve Policy Contradictions: The Trump administration attempts to stimulate the economy by managing 10-year Treasury yields, conflicting with the Federal Reserve's independence, exacerbating market uncertainty.
4. Technological Drive and Bubble Concerns: Ethereum Upgrade vs. VC Overvaluation
Optimists Cheer: The Ethereum Pectra upgrade (expected Q1-Q2 2025) aims to comprehensively enhance Ethereum's performance and user experience. This upgrade will focus on improving account abstraction, simplifying private key management, and enabling more diverse transaction functions; enhancing L2 compatibility, reducing transaction costs, and increasing efficiency; optimizing staking mechanisms, lowering participation thresholds, and improving ETH liquidity; enhancing EVM performance, increasing smart contract security; and improving light client support to enhance network decentralization. The goal of the Pectra upgrade is to make Ethereum more user-friendly, cheaper, and safer, thereby accelerating its mass adoption and consolidating its leading position in the smart contract platform.
Pessimists Examine: New public chains like TON and SUI have inflated valuations (SUI FDV reaches $54 billion), while the homogenization competition among altcoins exposes a lack of innovation, with the RWA project Plume Network promising $4.5 billion in assets before launch but only achieving a TVL of $64 million.
February Technical Milestones:
- Frax L2 Launch: Fraxtal supports frxETH and FRAX as gas tokens, with top protocols like Curve Finance joining, but whether it can attract hundreds of millions in TVL in the first month remains uncertain.
- EigenLayer Re-staking Boom: TVL surpasses $12.1 billion, but 33% of the staking cap raises centralization concerns, and airdrop incentives may exacerbate short-term speculation.
5. Regulation and International Games: Decentralized Ideals vs. Political Manipulation Realities
Optimists' Vision: The EU MiCA framework comes into effect, with global regulatory convergence promoting compliance processes.
Pessimists Expose: The WLFI project incurs tens of millions in losses, with the Trump family accused of "using political influence to exploit investors," reducing decentralization to a mere appendage of power.
February Geopolitical Risks:
- Trump's Territorial Disputes: Proposing radical topics like "American Bay," leading to heightened international tensions, with the crypto market experiencing $282 million in long liquidations within 24 hours.
- CBDC Confrontation Escalation: Trump firmly opposes the digital dollar, while China accelerates the promotion of the digital yuan, increasing the risk of a fragmented global payment system.
Conclusion: Reshaping Industry Value Between Frenzy and Clarity
The "Trump Era" of the crypto market is a prism reflecting the complex entanglement of political power, capital games, and technological innovation. Pessimists see the reefs of policy volatility, meme coin bubbles, and debt crises; optimists embrace the dividends of institutional entry, Ethereum upgrades, and global capital expansion.
Historical experience warns: The true winners in the market must dynamically balance between two perspectives.
Break Free from "Trump Dependency": The unsustainability of policies is significant (the president's promise fulfillment rate is only 31%), and the industry needs to shift from "regulatory arbitrage" to building intrinsic technological value.
Resist the "Crypto Baby Syndrome": WLFI's losses and VC bubbles reveal that excessive reliance on external dividends will weaken cyclical resilience; only infrastructure and application layer innovations can traverse bull and bear markets.
If the crypto industry can seize this opportunity, solidifying its technological foundation during the policy loosening period and maintaining clarity amid speculative frenzy, it can nurture a true miracle of crypto civilization amidst the turbulence.
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