GuShiio.com With the implementation of key economic data in February 2025, the adjustment of regulatory frameworks and the acceleration of technological iteration, the market continues to fluctuate amid the tension of “optimists move forward” and “pessimists warn”. This paper analyzes current market dynamics from a multi-dimensional perspective and explores its deep logic.
Author: Revc, Golden Finance
Game and Fissure in the Crypto Market in February 2025
The crypto market after Trump’s second election is not only a carnival for policy dividends, but also a testing ground for endogenous risks. With the implementation of key economic data in February 2025, the adjustment of regulatory frameworks and the acceleration of technological iteration, the market continues to fluctuate amid the tension of “optimists move forward” and “pessimists warn”. This paper analyzes current market dynamics from a multi-dimensional perspective and explores its deep logic.
1. Policy shift: The wrestling between liberalization commitments and implementation risks
Optimistic narrative: The Trump administration’s “Crypto Utopia” policy is advancing rapidly, SEC Chairman Gary Gensler resigned, the cumulative assets under management of the Bitcoin ETF exceed 1.1 million BTC (BlackRock IBIT accounts for 45%), and the U.S. Bitcoin reserve plan has been legislated in Texas and Pennsylvania, and the Bitcoin price has exceeded $100,000.
Pessimists question that the national bitcoin reserve plan faces high volatility risks and the federal deficit reaches US$1.8 trillion, coordinated resistance between Congress and the Federal Reserve may trigger a policy implementation fault.
New developments in February:
– The SEC moves to “guided regulation”: New Chairman Paul Atkins promotes the cryptocurrency working group’s top ten priorities, clarifying the attributes of token securities and exploring compliance paths, but emphasizing cracking down on fraud.
– FIT21 bill advances: If passed by the Senate, it would divide the regulatory boundaries between the SEC and the CFTC, but Republican Congressman Cynthia Loomis warned that “the bill needs to balance innovation and investor protection.”
2. Meme coin craze: Political tokenization and bubble risk
Optimistic logic: The market value of Trump’s Meme coin TRUMP once exceeded US$15 billion, and the transaction volume on the Solana chain surged (100 million active addresses), attracting retail investors and expanding the user base.
Pessimists are cold: TRUMP plunged 60% after its launch, Melania diverts funds, former CTO of Coinbase dismissed it as a “zero-sum lottery”, and industry leaders warned of a burst bubble or a repeat of FTX-style trust collapse.
February data verification:
– The proportion of memoin trading climbed: it accounted for 11% of the trading volume of the top 300 crypto assets (excluding stablecoins), but speculation led to increased market volatility, with the amount of open positions reaching US$346 million in 24 hours.
– WLFI asset allocation dispute: WLFI transferred US$307 million in assets to Coinbase Prime and increased its holdings in ETH and WBTC to hedge against fluctuations. However, the token swap agreement was questioned about using political influence to lock in liquidity.
3. Macroeconomic linkage: The dual impact of non-agricultural data and debt crisis
Optimistic expectations: In January 2025, the United States will add 143,000 non-agricultural employment, lower than the expected 169,000, and the unemployment rate will fall from 4.1% to 4%. One hour after the non-farm payrolls data was disclosed, Bitcoin fell back to around US$100,000. However, due to inflation concerns and tariff threats, the three major U.S. stock indexes fell collectively overnight, and Bitcoin fell back to around US$96,000.
When Trump met with Japanese Prime Minister Shigeru Ishiba, he said that “reciprocal tariff” measures would be announced next week, which could escalate the trade war. Mark Hackett, chief strategist at Nationwide, pointed out that the market initially focused on non-farm payrolls data, but Trump’s tariff statement became a new focus. Despite slowing job growth, low unemployment may cause the Fed to keep interest rates unchanged, with markets expected to cut interest rates only once this year.
Pessimists warn: U.S. Treasury bonds exceed US$36 trillion and debt ratings are at risk of being downgraded. 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 US dollar index rose to 108, and Bitcoin’s “digital gold” narrative strengthened, but WLFI sold part of ETH to lock in profits, exposing short-term speculative properties.
4. Technology-driven and bubble worries: Ethereum upgrade vs. VC’s inflated valuation
Optimists cheer: The Ethereum Pectra upgrade (expected for Q1-Q2 in 2025) aims to comprehensively improve Ethereum’s performance and user experience. This upgrade will focus on improving account abstraction, simplifying private key management and achieving more diversified transaction functions; enhancing L2 compatibility, reducing transaction costs and improving efficiency; optimizing pledge mechanisms, reducing participation thresholds and improving ETH liquidity; improving EVM performance, 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 leadership in smart contract platforms.
Pessimists review: The valuations of new public chains such as TON and SUI are inflated (SUI FDV reaches US$54 billion), the homogenization competition of altcoins exposes the lack of innovation, and the RWA project Plume Network promised US$4.5 billion in assets before it was launched, but TVL was only US$64 million.
February technical milestones:
– Frax L2 launches: Fraxtal supports frxETH and FRAX as Gas tokens, and head agreements such as Curve Finance settle in, but it is doubtful whether it can attract hundreds of millions of dollars in TVL in the first month.
– EigenLayer re-pledge boom: TVL exceeded US$12.1 billion, but the 33% pledge cap triggered centralization concerns, and airdrops encouraged or intensified short-term speculation.
5. Regulation and the International Game: Decentralization Ideal vs. Political Manipulation of Reality
Optimistic vision: The EU MiCA framework comes into effect, and global regulatory convergence drives the compliance process.
Pessimists reveal that the WLFI project has lost tens of millions of dollars, and the Trump family has been accused of “using political influence to cut leeks” and decentralization has become a vassal of power.
Geophysical risks in February:
– Trump’s territorial dispute: Raised radical issues such as the “Gulf of America” have triggered international tensions, and the crypto market has sold US$282 million in more than 24 hours.
Conclusion: Reshaping industry value between fanaticism and sobriety
The “Trump era” of the encryption market is a prism that reflects the complex entanglement of political power, capital games and technological innovation. Pessimists see the reefs of policy repeatability, the Meme coin bubble and the debt crisis; optimists embrace the dividends of institutional admission, Ethereum upgrades and global capital expansion.
Historical experience warns that real winners in the market need to dynamically balance between two perspectives
1. Get rid of “Trump dependence”: Policies are significantly unsustainable (the president’s promise fulfillment rate is only 31%), and the industry needs to shift from “regulatory arbitrage” to technological endogenous value construction.
2. Resist the “encrypted giant baby mentality”: WLFI floating losses and the VC bubble reveal that over-reliance on external dividends will weaken anti-cyclical capabilities, and only infrastructure and application-level innovation can survive the bull and bear.
If the encryption industry can take this opportunity to consolidate its technical foundation during the policy easing period and remain sober in the midst of fanatical speculation, only then can it breed a real miracle of encryption civilization amidst the bumps.
