Q2 2025 Crypto Market Review: Compliance and Real Returns Go Hand in Hand

In the second quarter of 2025, the crypto market showed an overall warming trend, with multiple favorable factors jointly accelerating the development of the industry. On one hand, the global macro environment is tending to stabilize, and tariff policies have eased, creating a more friendly environment for the flow of funds and asset allocation. On the other hand, several countries and regions have introduced friendly policies to support the development of the cryptocurrency industry, and traditional financial markets have begun to actively embrace crypto assets, linking them with traditional financial assets and promoting the "financialization" of capital structure.

The stablecoin sector is particularly active this quarter. From the expansion of USDT/USDC scales to the establishment of compliance frameworks in multiple countries, and then to Circle's IPO, all are pushing the narrative of cryptocurrency closer to mainstream capital markets, releasing strong positive signals. At the same time, the popularity of on-chain derivatives continues to rise, with Hyperliquid becoming a phenomenon-level leader, its daily trading volume frequently nearing or surpassing that of some centralized exchanges, and its native token HYPE continues to outperform the market, becoming one of the strongest performing assets. As on-chain matching systems and user experiences are continuously optimized, the derivatives market is accelerating its structural leap from "off-chain replication" to "on-chain native," further promoting the development of DeFi.

Global Stablecoin Regulatory Framework Accelerates Implementation

The U.S. "Genius Act" leads global stablecoin regulation

In the second quarter of 2025, the global stablecoin market exhibited dual characteristics of sustained growth and accelerated implementation of regulatory frameworks. As of June 24, the total market value of global stablecoins reached $240 billion, an increase of approximately 20% since the beginning of the year. Dollar-pegged stablecoins dominate the market with a share exceeding 95%. The scales of USDT and USDC are $153 billion and $61.5 billion respectively, together accounting for 89.4% of the market share, further intensifying market concentration.

In this context, the U.S. Congress took key action. The "U.S. Stablecoin Innovation and Regulation Act" (GENIUS Act) was overwhelmingly passed in the Senate on June 17. This landmark legislation establishes a comprehensive federal regulatory framework for payment stablecoins backed by fiat currency, complementing broader digital asset market structure legislation such as the "2025 Digital Asset Market Clarity Act", together building a new landscape for U.S. digital asset regulation.

The "Genius Act" not only regulates the compliance of stablecoin supervision but also represents a systematic financial layout by the U.S. government to maintain the core position of the U.S. dollar in the global financial system. The act stipulates that all compliant stablecoins must achieve a 1:1 full reserve in U.S. dollars, which must be stored in cash, demand bank deposits, or short-term U.S. Treasury securities at regulated qualified custodians, and implement a high-frequency auditing and information disclosure system. This not only alleviates market concerns about the transparency of stablecoin assets but also establishes a "Treasury absorption pool" that is deeply tied to on-chain payment systems, which is expected to drive tens of trillions of dollars in new demand for U.S. Treasury securities in the coming years.

More importantly, the "Genius Act" clearly positions compliant stablecoins as payment tools, excluding their classification as securities, fundamentally addressing the long-standing issues of unclear regulatory ownership, regulatory overlap, and legal uncertainty surrounding crypto assets in the United States. The act adopts a "federal + state" dual-track regulatory authorization model, achieving seamless integration between traditional financial regulation and the emerging stablecoin ecosystem. In the context of intensifying global digital currency competition, the United States is actively building a global "token payment network" centered around the dollar by promoting a private sector-led compliant stablecoin system.

Countries around the world are actively promoting stablecoin regulation.

Apart from the United States, many countries and regions around the world are also actively promoting compliance frameworks for stablecoins. South Korea is constructing a regulatory framework for stablecoins, with the "Basic Digital Asset Act" allowing eligible local companies to issue stablecoins and strengthening reserve and capital requirements. The regulatory authority is handed over to the Financial Services Commission (FSC), while a Digital Asset Committee is established for unified regulation. The Bank of Korea (BOK) has shifted from opposing to supporting, provided that it obtains oversight authority over the Korean won stablecoin.

Hong Kong will officially implement the "Stablecoin Regulation" in 2025, becoming one of the first jurisdictions globally to establish a licensing system for stablecoins. The regulation requires stablecoin issuers to register in Hong Kong, hold 1:1 reserve assets, undergo audits, and be included in the regulatory sandbox testing mechanism. Hong Kong's system design not only aligns with international standards like MiCA( but also provides a compliance channel for Chinese enterprises to go overseas, solidifying its position as a "controlled innovation" financial hub.

In this context, Chinese companies such as JD.com and Ant Group, along with several Chinese securities firms and financial institutions, are attempting to enter the stablecoin industry. For instance, JD.com is piloting a Hong Kong dollar stablecoin in the Hong Kong regulatory sandbox through its subsidiary JD Coin Chain Technology, emphasizing Compliance, transparency, and efficiency, with the goal of reducing cross-border payment costs by 90% and shortening settlement time to 10 seconds.

) The opportunities and challenges that compliance of stablecoins brings to the crypto market

The passage of the "Genius Act" has opened up unprecedented development opportunities for the crypto market, mainly reflected in the following three key areas:

1. Compliance stablecoins are deeply integrated with the DeFi ecosystem, unleashing significant capital potential. The bill clarifies the legal status and regulatory framework for stablecoins, opening a green channel for institutional funds to enter the DeFi ecosystem. More and more teams are committed to building transparent and secure liquidity pools and credit protocols that comply with regulations.

2. Stablecoins bring revolutionary opportunities to the payment sector. With the rapid growth of digital payment demand, the low-cost and high-efficiency settlement advantages of stablecoins make them particularly suitable for cross-border payments, instant settlements, and micro-payments in emerging markets, helping them become a key bridge connecting traditional finance and the digital economy.

3. RWA combines stablecoin anchoring with blockchain technology, fostering asset digitization and liquidity innovation. Through compliance contracts and on-chain issuance, physical assets such as real estate and bonds are transformed into tradable digital assets, expanding the liquidity of traditional assets and providing investors with diverse allocation options.

Of course, the "Genius Act" also brings challenges. It expands the definition of digital asset service providers, requiring developers, validators, and others to comply with anti-money laundering regulations. Although it does not regulate the blockchain protocols themselves, decentralized projects face greater compliance pressure. The bill is more suitable for centralized institutions, and decentralized projects may be forced to move out of U.S. regulation, leading to market fragmentation.

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Circle's Listing Leads to a New Paradigm: Corporate Balance Sheets Transitioning to On-Chain

In early Q2 2025, the crypto market entered a phase of consolidation, with Bitcoin Dominance continuously rising, reaching its highest level in four years, while the altcoin market is generally under pressure. Nevertheless, institutional participation remains strong, particularly through compliance channels such as spot ETFs and stablecoins, further enhancing the position of crypto assets in the global asset allocation system.

Circle, as the issuer of USDC, successfully listed on the New York Stock Exchange with an issuance price of $31 per share, raising a total of $1.1 billion. The IPO pricing gave it a market valuation of $6.9 billion, which surged to $68 billion in less than a month. Circle's strong performance signifies that regulatory Compliance encryption companies have officially entered the mainstream capital market. Its path towards MiCA Compliance and long-term SEC filings has become an important model for the stablecoin industry and has opened up a listing window for other crypto companies.

Apart from Circle, several listed companies have taken substantial steps in their digital asset allocation strategies:

• SharpLink Gaming)SBET( has accumulated a total of 188,478 ETH and has deployed all holdings to the staking protocol.
• DeFi Development Corp) before Janover Inc.( restructured its business model with Solana as the core asset, accumulating 251,842 SOL, approximately 36.5 million USD.
• Strategy) MicroStrategy( holds 592,345 bitcoins as of June 2025, with a market value exceeding $63 billion.
• Metaplanet is rapidly advancing its Bitcoin reserve strategy in the Japanese market, increasing its holdings by 1,111 BTC in the second quarter of 2025, for a total holding of 11,111 BTC.

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From a regional distribution perspective, the corporate encryption asset strategy is no longer limited to the US market; active exploration is taking place in Asia, Canada, and the Middle East, showing characteristics of globalization and multi-chain. Companies are no longer just passively holding coins, but are building balance sheets and revenue models centered on encryption assets, shifting their financial models from "reserve" to "yield-generating" and from "hedging" to "production."

At the regulatory level, the compliance represented by Circle's IPO, as well as the SEC's repeal of SAB 121 and the establishment of the "crypto task force," indicate that the U.S. policy stance is evolving in a clearer direction. Meanwhile, although Kraken still faces an SEC lawsuit, its proactive push for early-stage IPO financing also shows that leading platforms still hold expectations for the capital market. Animoca Brands plans to go public in Hong Kong or the Middle East, and Telegram is exploring a revenue-sharing mechanism driven by TON, which also reflects that the choice of regulation is becoming an important component of crypto companies' strategies.

The market trends and corporate behaviors this quarter indicate that the crypto industry is entering a new phase of "institutional structural reallocation" and "on-chain corporate balance sheet transformation." Strategies akin to "MicroStrategy" have provided new funding increments for several high-market-cap altcoins. In the future, the depth of corporate allocation and innovative models within specific altcoin ecosystems will become the core variables in the new round of industry valuation reconstruction.

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Hyperliquid, the Rise of On-Chain Derivatives and Real Yield DeFi

In the second quarter of 2025, the decentralized derivatives protocol Hyperliquid achieved a key breakthrough, further solidifying its dominant position in the on-chain derivatives market. As the current derivatives platform with the smoothest on-chain trading experience and product design closest to centralized exchange standards, Hyperliquid not only continues to attract top traders and liquidity but also effectively drives the growth of the entire derivatives sector and user migration trends.

Hyperliquid's monthly trading volume surged from $187.5 billion in April 2025 to a record $248 billion in May, an increase of 51.5%. As of June 25, the monthly trading volume still reached $186 billion, with a cumulative trading volume of $621.5 billion in the second quarter. Hyperliquid's market share in the decentralized perpetual contracts market reached 80%, far exceeding the 30% in November 2024; its monthly perpetual contract trading volume in May accounted for 10.54% of the centralized exchange Binance's total derivatives volume of $2.3 trillion during the same period, setting a new record.

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The core profit source of Hyperliquid relies entirely on the trading volume generated by its platform. The protocol accumulates revenue by charging fees on each transaction, building a highly sustainable profit model. 97% of this income is directed towards repurchasing HYPE tokens through the assistance fund, forming a strong value回流 mechanism. In the past seven months, Hyperliquid's total fees have reached $450 million, and the HYPE held by the assistance fund has exceeded 25.5 million tokens. Based on the current market price of approximately $39.5, the market value of the holdings exceeds $1 billion.

Hyperliquid has designed a set for use