Investor flows into digital asset ETFs continue to accelerate: Bitcoin ETFs grew by $2.022 trillion over the last four sessions, while Ethereum ETFs added $1.7799 trillion. This robust institutional demand has become a defining feature of 2025’s crypto landscape.
US Trade Policy, Inflation, and Flight to Crypto
The initial wave of crypto buying was fueled by the White House’s aggressive trade policy shift, particularly the introduction of steep tariffs on major partners such as the EU and Mexico. Together, these partners account for about one-third of all US imports—$533 billion and $455 billion in 2022, respectively. These moves heightened fears that inflation will accelerate in the months ahead, placing significant pressure on the US economy and raising the specter of a potential recession by year-end.
Compounding these concerns, the US national debt surpassed $5 trillion following the passage of the so-called "One Big Beautiful Bill Act"—a sweeping legislative package that encapsulates the administration’s campaign promises. With sovereign risk rising, investors are increasingly seeking crypto as a safe-haven, driving both demand and prices higher for leading assets like BTC and ETH.
Midweek, however, the market experienced a notable correction as June US inflation data showed CPI rising from 2.4% to 2.7% year-over-year and from 0.1% to 0.3% month-over-month, reflecting the impact of trade tariffs. This supported the case for the Fed to keep rates elevated, temporarily boosting the dollar and sparking a short-lived dip in digital assets—though buyers quickly stepped back in.
Regulation Takes Center Stage: Stablecoins, CBDCs, and Market Structure
Policy developments dominated sentiment as the US House of Representatives passed three key bills set to reshape the digital asset sector: the GENIUS Act (stablecoin innovation guidelines), a comprehensive market structure bill, and new rules for central bank digital currencies (CBDCs). The GENIUS Act, which may be signed into law imminently, mandates that stablecoin issuers fully back their tokens 1:1 with US dollar reserves or equivalents (e.g., Treasuries). Issuers will be required to publish regular audits, submit reserve data to approved auditors, and file reports with federal or state regulators. Notably, the legislation also prohibits both domestic and foreign stablecoin issuers from paying interest to users, sparking debate over the future of yield-bearing digital dollars.
ETH Outpaces: Institutional Adoption Surges After SEC Clarity
Among major coins, Ethereum stood out as a top performer, buoyed by growing institutional interest. In late May, the SEC ruled that staking in Proof-of-Stake networks like Ethereum does not constitute a securities transaction, sharply boosting inflows from large players. Over the past 30 days alone, institutions have acquired approximately 545,000 ETH (valued at $1.6 billion). SharpLink Gaming Inc. is currently the largest single holder, with a balance of 255,000 ETH.
Looking Ahead: Regulation and Macroeconomics to Steer the Trend
In the near term, the crypto market is likely to remain sensitive to further developments on both the regulatory and macroeconomic fronts. With clear rules for stablecoins and digital assets emerging from Washington, and US economic momentum slowing, expectations are rising for continued appreciation in leading cryptocurrencies. The new legislative clarity may help legitimize crypto in the eyes of institutional investors—fueling the next stage of the bull run as the traditional financial system adapts to the realities of digital value.
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