Market Overview
Geopolitical conflicts dominated market trends this month, overshadowing tariff concerns as the primary driver of cryptocurrency volatility. Following U.S. intervention in the Strait of Hormuz disputes, BTC briefly dipped below the $100K threshold. However, with limited conflict duration and tempered sentiment, market fluctuations remained relatively contained. Post-ceasefire, a swift rebound refocused attention on monetary policy.
Key insights:
- July rate cuts appear unlikely globally, but the Fed’s dovish tilt fuels optimism for late-2024 reductions.
- Industry highlights include the Senate passing the Stablecoin Genius Act and Circle’s IPO amplifying stablecoin momentum, sparking a global issuance race among tech giants.
- Traditional finance embraces crypto-native firms like OKX, while small-cap companies pivot to crypto strategies for survival.
- Hong Kong’s stablecoin draft legislation energizes mainland Chinese tech firms (e.g., Ant Group, JD.com) and local brokerages, supported by its Digital Asset Development Policy Declaration 2.0.
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Policy Landscape
China’s blockchain policies declined sharply (-61.66% YoY), with only 23 directives issued by June 2025. Key shifts:
- Top-tier policies (7 directives) now emphasize sector-specific applications (data, finance, supply chains) over infrastructure, signaling market maturity.
- Local policies centered in Shanghai (73% of regional initiatives), reflecting targeted urban digitization strategies.
Implication: Reduced policy volume marks the end of government-led growth phases, transitioning to market-driven development with stricter compliance filters.
Investment Trends
Blockchain funding surged to $108.7B in H1 2025—nearing 2022’s annual record—with fewer but larger deals indicating robust capital inflow despite macroeconomic stagnation.
| Sector | Funding ($B) | Share (%) | Notable Trend |
|----------------------|-------------|----------|-----------------------------------|
| Digital Currency | 791.68 | 72.81 | Dominated by stablecoin/IPO hype |
| Industry Apps | 118.27 | 10.88 | Led by enterprise solutions |
| Base Tech | 104.04 | 9.57 | Higher per-deal averages |
Takeaway: Digital currency’s dominance (+35.93pp YoY) crowds out other sectors, particularly infrastructure.
Real-World Assets (RWA) Expansion
RWA capitalization skyrocketed 55.6% to $244.4B, driven by institutional adoption:
- Asset Concentration: Private credit (58.5%) and U.S. Treasuries (30.27%) lead.
- Platform Share: Ethereum hosts 58.7% of RWA issuance volume.
- Challenges: Limited diversification and high entry barriers for SMEs.
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Digital Yuan’s Global Push
China accelerated e-CNY internationalization via:
- Shanghai Hub: New center for cross-border operations.
- Shenzhen Trials: CBDC interoperability research under the “mBridge” project.
Strategic context: Countering USD-stablecoin dominance while advancing RMB’s role in alternative settlement systems.
FAQs
Q1: How does Hong Kong’s stablecoin draft impact mainland firms?
A1: It enables Ant/JD.com to leverage Hong Kong’s regulatory clarity for global stablecoin ventures.
Q2: Why is RWA growth uneven across asset classes?
A2: Institutional preference for low-risk assets (credit/T-bills) skews the market.
Q3: Will digital yuan challenge USD-stablecoins?
A3: Yes—by offering state-backed alternatives in trade settlements, reducing USD reliance.