GuShiio.com What are the other positive factors in the current encryption market?
Author: Mu Mu
In recent times, the crypto market has faced severe correction pressure, but many early Bitcoin participants (OGs) still believe that the current bull market has not yet fully unfolded. Their reason is that although Bitcoin reached more than 100,000 US dollars in early 2025, its performance has not been as crazy as previous bull markets. Of course, predicting the future is very difficult, but there are four key points in 2025 that may be the main factors in determining whether Bitcoin can once again reach more than $100,000 and start a comprehensive bull market…
Strategic Bitcoin Reserve
There is growing discussion among governments of bitcoin as a strategic asset. In 2024, U.S. Senator Cynthia Lummis and Trump both proposed establishing a national digital asset reserve. In addition, El Salvador has used its bitcoin reserve as a national asset, and other countries such as Germany and Japan are also discussing similar policies. However, the ideals are full and the reality is very bony. Whether the United States promotes the federal strategic Bitcoin reserve promoted by Trump or the strategic reserve proposed by various state government members, it will face numerous obstacles. Even Trump’s Republican Party, let alone the Democratic Party, are divided. Recently, Trump once again revisited strategic reserves on Social networks and the upcoming Crypto Summit on March 7, which slightly boosted market confidence and at least demonstrated his firm stance. Judging from the current situation, if Trump insists on it, there is a possibility of implementation. Even if he does not pass Congressional legislation, he can also pass an executive order to bypass resistance and launch a mini version of the strategic Bitcoin reserve first. Of course, once the U.S. strategic reserve is implemented, it will be a milestone event, no matter how big or small it will be, and countries and regions around the world will carefully consider whether to follow up on this matter.
Interest rate cuts and loose monetary policy
Adequate liquidity is a prerequisite for a bull market, and there is still room for this year’s “interest rate cut”. As of March 2025, the Federal Reserve maintains interest rates between 4.25% and 4.5%, and market expectations may cut interest rates later in 2025. Economists predict that if economic data weakens, the Federal Reserve may cut interest rates in May or July. Trump imposed tariffs on Canada, Mexico and China in February 2025, triggering a trade war that may bring huge pressure to economic recession. At the same time, it could force the Federal Reserve to cut interest rates further to stimulate the economy. Research shows that Bitcoin prices are highly correlated with the growth of global M2 money supply, with a correlation coefficient of 0.94. Historical trends suggest that M2 growth typically drives Bitcoin prices higher, especially when liquidity increases and interest rates fall. Cryptocurrency analyst Bitcoindata21 said in an X post on February 25:”The weak dollar has a net positive impact on global M2, and it is only a matter of time before Bitcoin achieves this goal.” Similar views appeared in Colin Talks Crypto’s X post, where he said: “The global M2 money supply predicts significant changes in Bitcoin.”
Regulatory framework and stablecoin act
At the beginning of 2025, the market value of stablecoins exceeded US$200 billion, which has already attracted global regulatory attention. The European Union has implemented MiCA regulations in January 2025, and the U.S. Congress is reviewing related stablecoin bills such as the Clarity for Payment Stablecoins Act and the Lummis-Gillibrand Payment Stablecoins Act. In the past two months, more and more crypto project parties and crypto trading platforms have announced that their previous lawsuits with the SEC have been dropped, and there is a high probability that a friendly regulatory framework will be brought in a friendly regulatory environment. The adoption of the crypto regulatory framework and the stablecoin bill will bring more regulatory clarity and certainty, allowing traditional financial institutions that are “salivating” to enter the crypto market and compete with issuers such as Tether, which are making a lot of money. Direct competition provides conditions and brings more capital and liquidity.
Ethereum is the key to the altcoin bull market
Paradigm wrote an article in late January calling on Ethereum core developers to speed up protocol upgrades and achieve more milestones on its technology roadmap to maintain its leading position as the leading Layer1 blockchain. The Ethereum ecosystem has the greatest momentum in the field of encryption, especially the advancement of web3 implementation applications. In short,”there are many people and projects actually doing things,” which is the source of unlimited expectations.
Therefore, many times Ethereum comes together, and most DeFi and other related ecosystems are collectively lifted, and the competitive public chain has also achieved the effect of raising the tide. Therefore, Ethereum is very important to a comprehensive bull market. Ethereum seems to be taking action, and there will be changes in 2025:1) Transformation of the Ethereum Foundation Currently, we have seen that the Ethereum Foundation is increasing its investment in DeFi and making personnel adjustments to maintain its status as a leading Layer1 blockchain. Of course, transformation is a good thing, but the encryption ecosystem cannot rely entirely on the Ethereum Foundation. Ethereum is not a company. The Foundation is just an auxiliary organization. At most, it can only assist the growth of the ecosystem and cannot control this decentralized ecosystem. 2) Speed up upgrades Recently, some developers in the Ethereum community have expressed on several occasions such as several related Ethereum developer conferences that they will speed up protocol upgrades and other matters. Pectra, the main upgrade of Ethereum in 2025, will be launched in April. The main network is launched in April. This upgrade may be the largest upgrade in history, including up to 20 Ethereum Improvement Proposals (EIPs), such as EIP-3074 to improve transaction efficiency. EIP-7002 optimizes verification node operations. The next upgrade, Fusaka, will complete scope confirmation on April 10. Every time Ethereum is significantly upgraded, it brings good expectations before and after its implementation. What will happen this time? Previously, some analysts believed that Ethereum’s current risk-return ratio is high and stagflation compared with some top projects. Once new progress or changes are made, it is likely to reverse the decline.
The potential benefits this year are still there. The possibility that Bitcoin will hit 10w + again this year is still high, but the variables cannot be ignored. It can only be said that the probability of strategic reserves being implemented is higher, the expectation of interest rate cuts is still difficult to say, the regulatory framework and related bills are not major problems, and the transformation and upgrading of Ethereum will also be beneficial. Overall, it is still worth looking forward to.
