Author: Revc, Golden Finance
Game and fission of the crypto market in February 2025
The crypto market after Trump's second election is not only a carnival of policy dividends, but also a test field for endogenous risks. With the release of key economic data in February 2025, the adjustment of regulatory frameworks and the acceleration of technological iterations, the market continues to fluctuate in the tension between "optimists moving forward" and "pessimists warning". This article analyzes the current market dynamics from a multi-dimensional perspective and explores its deep logic.
1. Policy shift: the struggle between liberalization commitments and implementation risks
Optimist narrative: The Trump administration's "crypto utopia" policy is advancing rapidly, SEC Chairman Gary Gensler resigns, Bitcoin ETF's cumulative assets under management exceed 1.1 million BTC (BlackRock IBIT accounts for 45%), the US Bitcoin Reserve Program is being legislated in Texas and Pennsylvania, and the price of Bitcoin has exceeded $100,000.
Pessimists question: The national Bitcoin reserve plan faces high volatility risks. Against the backdrop of a federal deficit of $1.8 trillion, the coordination resistance between Congress and the Federal Reserve may cause a policy implementation fault.
New developments in February:
- SEC turns to "guided regulation": New chairman Paul Atkins promotes the top ten priorities of the cryptocurrency working group, clarifies the attributes of token securities and explores compliance paths, but emphasizes cracking down on fraud.
- FIT21 bill advances: If passed by the Senate, it will divide the regulatory boundaries between the SEC and the CFTC, but Republican Congressman Cynthia Lummis warned that "the bill needs to balance innovation and investor protection."
II. Meme coin craze: political tokenization and bubble risk
Optimists’ logic: Trump’s meme coin TRUMP’s market value once exceeded $15 billion, and Solana’s on-chain transaction volume surged (100 million active addresses), attracting retail investors to enter the market and expanding the user base.
Pessimists’ cold eyes: TRUMP coin plummeted 60% after its launch, Melania coin diverted funds, Coinbase’s former CTO denounced it as a “zero-sum lottery”, and industry leaders warned that the bubble burst may repeat the FTX-style trust collapse.
February data verification:
- The proportion of meme coin transactions has risen: accounting for 11% of the transaction volume of the top 300 crypto assets (excluding stablecoins), but speculation has led to increased market volatility, and the amount of liquidation in 24 hours reached $346 million.
- WLFI asset allocation controversy: WLFI transferred $307 million in assets to Coinbase Prime, increasing its holdings of ETH and WBTC to hedge against volatility, but the token swap agreement was questioned for using political influence to lock in liquidity.
III. Macroeconomic linkage: the double impact of non-agricultural data and debt crisis
Optimists expect: In January 2025, the US non-agricultural employment increased by 143,000 people, lower than the expected 169,000 people, and the unemployment rate dropped from 4.1% to 4%. One hour after the release of the non-agricultural employment data, Bitcoin fell back to around $100,000, but affected by inflation concerns and tariff threats, the three major U.S. stock indexes fell collectively overnight, and Bitcoin fell back to around $96,000.
When Trump met with Japanese Prime Minister Shigeru Ishiba, he said that "reciprocal tariffs" measures would be announced next week, which may escalate the trade war. Nationwide chief strategist Mark Hackett pointed out that the market initially focused on non-farm payrolls, but Trump's tariff announcement became a new focus. Despite the slowdown in job growth, low unemployment may allow the Fed to keep interest rates unchanged, and the market expects only one rate cut this year. Pessimists warn: U.S. national debt exceeds $36 trillion, and debt ratings face the risk of downgrade. If the U.S. debt crisis triggers a global liquidity crunch, the crypto market may collapse simultaneously with risky assets. February market resilience test: - Dollar hegemony game: The U.S. dollar index rose to 108, and Bitcoin's "digital gold" narrative strengthened, but WLFI sold some ETH to lock in profits, exposing its short-term speculative attributes. - Fed policy contradictions: The Trump administration's attempt to stimulate the economy by managing 10-year Treasury yields conflicts with the Fed's independence and exacerbates market uncertainty.
IV. Technology-driven and bubble concerns: Ethereum upgrade vs. VC valuation inflated
Optimists cheer: Ethereum Pectra upgrade (expected in Q1-Q2 2025) aims to comprehensively improve Ethereum's performance and user experience. The upgrade will focus on improving account abstraction, simplifying private key management and enabling more diverse transaction functions; enhancing L2 compatibility, reducing transaction costs and improving efficiency; optimizing the staking mechanism, lowering the threshold for participation and increasing ETH liquidity; improving EVM performance and enhancing the security of smart contracts; and improving light client support to increase network decentralization. The goal of the Pectra upgrade is to make Ethereum easier to use, cheaper, and more secure, thereby accelerating its mass adoption and consolidating its leading position in smart contract platforms.
Pessimists’ review: New public chains such as TON and SUI have inflated valuations (SUI FDV reached $54 billion), homogeneous competition among altcoins exposed their lack of innovation, and the RWA project Plume Network promised $4.5 billion in assets before its launch, but its TVL was only $64 million.
Technical milestones in February:
- Frax L2 is launched: Fraxtal supports frxETH and FRAX as gas tokens, and top protocols such as Curve Finance have settled in, but it is questionable whether it can attract hundreds of millions of dollars in TVL in the first month.
- EigenLayer re-staking boom: TVL exceeded $12.1 billion, but the 33% staking limit raised concerns about centralization, and airdrop incentives may exacerbate short-term speculation.
V. Regulation and international game: Decentralized ideal vs. political manipulation of reality
Optimists' vision: EU MiCA framework takes effect, and global regulatory convergence promotes compliance.
Pessimists reveal: WLFI project has a floating loss of tens of millions of dollars, the Trump family is accused of "using political influence to cut leeks", and decentralization has become a vassal of power.
Geopolitical risks in February:
- Trump's territorial dispute: Proposing radical issues such as "American Gulf" has caused tension in the international situation, and the crypto market has a 24-hour long position of 282 million US dollars.
- CBDC confrontation escalates: Trump firmly resists the digital dollar, while China accelerates the promotion of the digital RMB, and the risk of fragmentation of the global payment system increases.
Conclusion: Reshaping industry value between enthusiasm and sobriety
The "Trump era" in the crypto market is a prism that reflects the complex entanglement of political power, capital game and technological innovation. Pessimists see the reefs of policy repetitiveness, Meme coin bubble and debt crisis; optimists embrace the dividends of institutional entry, Ethereum upgrade and global capital expansion.
Historical experience warns: the real winners in the market need to dynamically balance between two perspectives
1. Get rid of "Trump dependence": the policy is not sustainable (the president's promise fulfillment rate is only 31%), and the industry needs to shift from "regulatory arbitrage" to the construction of intrinsic value of technology.
2. Resist the "crypto giant baby mentality": WLFI floating losses and VC bubbles reveal that over-reliance on external dividends will weaken anti-cyclical capabilities, and only infrastructure and application layer innovations can survive bull and bear markets.
If the crypto industry can take this opportunity to consolidate its technical foundation during the policy relaxation period and stay sober amid the frenzy of speculation, it will be able to nurture the true miracle of crypto civilization in the turbulence.
Anais
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Weatherly
Kikyo
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