GuShiio.com As the three main forces of the implementation of key economic data, the adjustment of regulatory frameworks and the acceleration of technological iteration are intertwined, the encryption market has also continued to experience shocks, baptism and reconstruction.
January and February 2025 are the full moon of Trump 2.0. On the one hand, Trump 2.0 kicked off, and policy dividends surged. On the other hand, under the influence of DeepSeek, U.S. stocks suffered a huge impact on the AI line., inducing a series of financial avalanches. Especially in February, with the interweaving of three main forces: the implementation of key economic data, the adjustment of regulatory frameworks and the acceleration of technological iteration, the encryption market also continued to experience shocks, baptism and reconstruction.
In February 2025, many changes occurred in the macroeconomic situation in the United States, with a series of key economic indicators falling. At the same time, Trump vigorously promoted the policy of increasing import tariffs after taking office. These two factors are intertwined and have had a profound impact on the United States and even the global economy. Impact, triggering global market shocks.
Although the revised U.S. GDP in the fourth quarter maintained a solid growth rate of 2.3%, many indicators suggest that the U.S. economy has entered a low-speed growth channel, especially the cooling of the labor market: 187,000 new non-agricultural jobs were created in February, lower than expected. For 200,000 people, the month-on-month growth rate of hourly wages slowed to 0.2%, the lowest level since October 2023. In addition, the University of Michigan’s consumer confidence index deteriorated for a rare third consecutive month, falling to 98.3, reflecting residents ‘accumulated anxiety about declining real purchasing power.
In January, the core CPI of the United States rose by 0.3% month-on-month and 2.5% year-on-year. The year-on-year growth rate dropped by 0.1 percentage points from the figure in December last year, which means that its unsatisfactory inflation has slightly “cooled down”. The core personal consumption expenditure (PCE) price index in the United States recorded an annual rate of 2.6% in January, the lowest since June 2024, which is in line with market expectations and one of the few good news.
But then,The tariff war will become the biggest uncertainty for US inflation.The Trump administration announced a 10% tariff on imports from Mexico and Canada (effective March 4), which directly pushed up the cost of key categories such as automobiles and agricultural products. According to the Cleveland Fed model, this policy may increase the U.S. CPI in the second quarter. An additional 0.3-0.5 percentage points.
Source: CME
Source: CME
In terms of interest rates, it is generally expected that the Federal Reserve’s policy interest rate will remain unchanged for the time being. According to CME, the probability that the Fed will keep interest rates unchanged in March is 95.5%, and the probability of cutting interest rates by 25 basis points is 4.5%. The probability of keeping current interest rates unchanged by May is 73.2%, the probability of a cumulative interest rate cut of 25 basis points is 25.8%, and the probability of a cumulative interest rate cut of 50 basis points is 1.1%. However, given the uncertainty of inflation and the possible inflationary pressure brought by Trump’s tariff policy, the Fed’s decision to cut interest rates is still uncertain.
The core contradiction of the U.S. economy in 2025 lies in the tug of war between “slowing growth” and “inflation resilience”.The Federal Reserve tried to balance risks through prudent monetary policy, and a series of tariff increases after Trump came to power not only exacerbated the complexity of this issue, but also continued to impact the pricing logic of global supply chains and amplified the turmoil in the global economy. Historical experience shows that trade protectionism is often difficult to truly solve structural economic problems,How to find certainty in the policy game, will be the core proposition of the global market in the next six months.
In the two months of 2025, the hottest topic in the AI field is the emergence of DeepSeek, and the biggest impact DeepSeek has on U.S. stocks is undoubtedly breaking the market’s previous expectations for the AI narrative.
Since the development of the AI market, a bubble is inevitable. DeepSeek has punctured part of the AI bubble, and its open source model has significantly reduced computing power dependence through algorithm optimization.Promote the industry’s transformation from “computing power competition” to “algorithm efficiency”, reshaping the market’s demand logic for AI infrastructure。For example, DeepSeek-V3 only uses 2048 H800 GPUs to complete training, while traditional models require tens of thousands of similar chips, directly shaking the “moat” narrative supported by U.S. technology giants ‘high capital expenditures.
The impact of DeepSeek, coupled with concerns about global supply chain turmoil triggered by Trump’s tariff policy, technology stocks, as the most globalized sector, bear the brunt, and the entire U.S. stock market showed a downturn: throughout February,The Nasdaq index was the most hit by the high weight of technology stocks,A 4% decline wiped out the accumulated gains during the year, creating the worst monthly performance since April 2024; the Dow fell 1.58% due to the large proportion of traditional industries, while the S & P 500 fell between the two, down 1.42%.
Nasdaq 100 five-day chart as of February 28, 2025, source: finance.yahoo.com/
This is directly reflected in the performance of the U.S. stock big7. Judging from the financial report, there is nothing particularly worthy of attention in the latest financial report of the U.S. stock market Big7. Even Nvidia, which performed the best, did not significantly exceed expectations, causing investors to take profits and trigger a sell-off. Overall, as mentioned earlier, there is no clear trading direction in the market at present. The performance of big7 ‘s share price is characterized by a “policy and emotion-led slump at the end of the month”, summarized in a sentence from an analyst at Bespoke Investment Group-“Looking around, fear has become a collective emotion.”
In this environment of depressed market sentiment, crypto assets will inevitably become innocent victims. Dow Jones Market data showed that the six-month rolling correlation indicator between Bitcoin and Nasdaq recently rose to 0.5, the highest since 2023, which means that U.S. stocks have intensified volatility and the crypto market is becoming more and more affected by it. Once the stock market fluctuates and even spreads due to unexpected variables like DeepSeek, investors ‘risk appetite decreases and withdraw funds from the crypto market among risky assets, it will easily cause the crypto market to bear downward price pressure. This chain reaction highlights the market’s “over-defensive” mentality against DeepSeek shocks and policy uncertainty.
With the coming to power of Trump, the “crypto president,” the new U.S. government’s crypto policy has shifted from campaign promises to substantive actions. It is said that “new officials take office with three fires.” Trump’s hottest fire at present is probably January 18, when Trump tweeted announcing the sale of the official Meme token-$TRUMP.
The market value of $TRUMP once exceeded US$14.5 billion, and subsequently plunged 60%. This wave of crazy speculation in the market has made a group of people rich and caused some people to suffer a serious shrinkage in their assets. The deeper revelation of this incident is that cryptocurrencies are radiating from the financial world to the political world. If the U.S. SEC’s adoption of the Bitcoin Spot ETF is a milestone for cryptocurrency to enter the traditional financial world, then Trump’s coin issuance is a witness to cryptocurrency’s entry into politics. Through operations such as “token swaps”,Transforming political influence directly into market liquidity，It shows the potential of crypto assets as a new political tool.Whether it is multiple U.S. states competing to advance the Bitcoin Reserve Act or the EU MiCA framework accelerating the compliance process, behind the global regulatory game, the important clue of “code is power” runs through it.
In addition to Trump’s coin issuance, the crypto circle is also continuing to pay attention to the extent to which his policies are fulfilled. After the new U.S. government took office, the encryption field has ushered in many benefits, such as the establishment of a cryptocurrency working group, drafting a new digital asset supervision plan, and exploring the establishment of a national cryptocurrency reserve. At the same time, the SEC revoked SAB 121, allowing banks to custody digital assets after regulators issue additional guidance. Affected by this, bitcoin prices rose actively, with a month-on-month increase of 9.5%. However, Deepseek news and tariff-related news then hit the market. In February, the crypto market experienced an epic adjustment. Bitcoin fell below US$100,000. In February, it fell 17.39% to close at the US$85,000 mark. The monthly decline was concentrated at the end of the month.There is no independent single main cause for this slump. It is more like it is caused by the fluctuations of the chaotic market itself. It is not only a chain reaction of the selling of risky assets under the impact of Trump’s tariff policy, but also the force of self-purification after the market is over-leveraged.
It is worth noting that Bitcoin still showed a certain degree of resilience during this wave of shocks. Other alternative currencies were affected by negative events within the market, and most of them fell deeper. Ethereum was dragged down by the Bybit incident to hit a low for the year. Solana also suffered a huge shock due to the political coin issue. In mid-to-late February, some institutions regarded this short-term fluctuation as a long-term allocation window. For example, Strategy (formerly MicroStrategy) spent $1.99 billion on 20,356 bitcoins at an average price of $97,514 per coin between February 18 and 23. Game company Boya Interactive also announced on February 28 that the group further increased its holdings of bitcoins and purchased approximately 100 bitcoins for approximately US$7.95 million, at a purchase cost of approximately US$79495 each.
If we stretch the timeline further, we will find that since last year,The price trends of gold and bitcoin are increasingly converging.Throughout 2024, the overall fluctuations of the two will show a certain similarity. In February this year, the price of gold also hit a record high of 2942 US dollars/ounce and plunged more than 100 US dollars in a week. Previously, WealthBee analyzed the moderate linear correlation between Bitcoin price and gold price in 2023 (see: Across the 10-year cycle, 6 charts to understand the correlation between Bitcoin price and the trend of mainstream assets such as U.S. stocks). At that time, we analyzed that Bitcoin is still positioned as venture capital. Now the situation has changed, and the price fluctuations of the two are closely linked, which means thatThe “digital gold” nature of Bitcoin is becoming increasingly obviousThe fundamental reason is that they are all regarded as substitutes for credit currencies. As the global economic situation and geopolitical situation further evolve, the prices of the two may continue to maintain a certain degree of linkage.
Currently, the crypto market is falling into a certain information vacuum period,Traditional narratives (such as halving cycles, ETF capital inflows) have diminishing marginal effects。Judging from the signals released by all parties at the recently concluded Hong Kong Consensus Conference, despite the lack of explosive narratives in the short term, three major trends are quietly reshaping the market: The first is the transformation of the regulatory paradigm. The pro-crypto majority in the U.S. Congress has promoted the FIT21 bill. The SEC has reduced the size of law enforcement agencies. Regulation has shifted from suppression to guidance, clearing obstacles for institutions to enter the market. Secondly, the crypto market in 2025 is moving from “policy arbitrage” to “value creation” and from “speculation-driven” to “technology-driven”; finally, the integration of AI and encryption may become the most noteworthy new breakthrough. If the AI sector begins to rebound and integrate with the encryption market, a new narrative may emerge. As the market completes the clearance of leverage and the collaborative narrative of AI and encryption takes shape, a new round of upward breakthroughs may be on the horizon. Historical experience has repeatedly proven that the new dawn is often nurtured in the darkest moments when fanaticism and fear are intertwined.
After Trump took office, the market entered a chaotic period.The complexity is far greater than ever before. The currency circle has also been affected by this uncertainty and encountered rare frequent fluctuations. Although the inherent weaknesses of human nature have planted the seeds of risk in the market, Bitcoin’s immutable scarcity nature has never wavered, giving it tenacious vitality to penetrate the fog of cycles. As “The Song of Ice and Fire” said: “Chaos isn t a pit, chaos is a ladder.”
