The information, opinions and judgments on markets, projects, currencies, etc. mentioned in this report are for reference only and do not constitute any investment advice.
The market dividends since the “reciprocal tariff war” entered the third phase have been exhausted.
As the big beautiful plan led by Trump was approved by the House of Representatives, the U.S. debt crisis once again cooled the markets bullish enthusiasm. Coupled with Trumps statement that he wanted to impose excessive tariffs on the European Union again, the United States once again saw a triple kill situation of stocks, bonds and currencies.
Driven by capital inflows and the passage of the “Stablecoin Act,” BTC saw a bullish sentiment in the first half of the week, breaking through the “Trump bottom” to set a new all-time high in the U.S. dollar.
The capital inflow increased, but the selling also began to increase, but the overall selling pressure was still small, showing that BTC was still dominated by upward momentum and the temporary adjustment might end at any time.
Policy, macro-finance and economic data
Since May, the framework of global risk traders has gradually adjusted back to the game of US economic and employment fundamentals and interest rate policy. This week, the gray rhino hanging over the US economy and financial markets has reappeared as a threat.
The One Big Beautiful Bill is a comprehensive fiscal legislation pushed by US President Trump, officially known as the One Big Beautiful Bill Act. The bill involves multiple areas such as taxation, immigration, health care, and border security, and aims to achieve Trumps governing agenda through tax cuts and policy reforms. On May 22, the bill was approved by the US House of Representatives and has been transferred to the Senate for deliberation.
The bill involves many areas, and the increase in spending and reduction in tax revenue will eventually increase the US debt ceiling to $4 trillion. This will increase the US debt ceiling from the current $36.1 trillion to $40.1 trillion. By then, the maximum debt will reach 140% of GDP, a record high.
This has made the market further pessimistic about the U.S. governments ability and willingness to repay its debts, and the attractiveness of U.S. debt has further declined. Currently, U.S. debt has lost all top ratings from the three major rating agencies.
In response to the Beautiful Bill, the 10-year US Treasury yield, the anchor of global asset pricing, jumped to a high of 4.5% again this week. High US Treasury yields will undoubtedly increase the borrowing costs of companies and consumers, inhibit investment and consumption, and ultimately affect corporate profitability, putting pressure on the stock market.
Affected by the House approval of the Beautiful Bill, the three major stock indexes all stopped their rebound since the reversal of the tariff war this week and showed a downward trend, with the Nasdaq -2.47%, the SP 500 -2.61%, and the Dow Jones 2.47%.
The U.S. dollar index also fell 1.03% to 99.1252 after four consecutive weeks of gains.
Gold was once again the beneficiary, with London gold rising 1.98% to $3,359.90 per ounce.
It will take some time for the Beautiful Bill to be finally approved, and its dynamics will undoubtedly become a major variable affecting the financial market in the future.
Crypto Market
Thanks to the substantial inflow of funds into the BTC Spot ETF channel, increased holdings by listed companies and the passage of the “Genius Act”, BTC was shrouded in optimism and achieved a seven-week consecutive rise.
Before the panic caused by the House approval of the Big Beautiful Act spread, BTC achieved a historic breakthrough and set a historical record of US dollar pricing - US$112,000 per coin.
From the technical indicators, the whole week was above the 5-week line, the trading volume was enlarged, and the weekly MACD just rose above the water. The BTC price ran above the first rising trend line for the whole week and tested the upper edge of the Trump bottom (90,000 ~ 110,000).
From a technical perspective, BTC is still in a medium-term upward trend, but affected by the stock, bond and currency triple kill and having achieved substantial increases for several days, the markets bullish sentiment may see adjustments within a certain period of time.
On May 19, the Senate passed a procedural vote with a vote of 66-32, marking the imminent implementation of the U.S. stablecoin regulatory framework. From the perspective of policy impact, the “Genius Act” (the United States Stablecoin Innovation Guidance and Establishment Act of 2025) may be no less than the approval of the BTC Spot ETF in 2024.
The “Genius Act” defines the definition, supervision, auditing, consumer protection and underlying asset requirements of the US dollar stablecoin (high-liquidity assets such as US dollar cash and short-term US Treasury bonds). Although the US move is aimed at promoting the development of its own blockchain industry, maintaining the international status of the US dollar, increasing the penetration of the US dollar, and to some extent alleviating the pressure of issuing US debt, it will undoubtedly promote the development of the second largest application of blockchain, stablecoin, besides BTC.
On May 21, the Hong Kong Legislative Council formally passed the Stablecoins Bill, establishing a comprehensive licensing and regulatory framework for fiat-referenced stablecoins (FRS).
We believe that from the perspective of application scope and number of holders, stablecoins are likely to surpass BTC. The positive progress of stablecoins in the United States and Hong Kong shows that in addition to value reserves, the DApp application or Web3 part of the blockchain industry based on the smart contract platform is also being recognized by governments of various countries. This is particularly important for the industry.
Funds In and Out
Although the stock, bond and currency triple kill has once again dampened the U.S. stock market, the trading enthusiasm in the crypto market seems to be immune.
Positive capital inflows were maintained for 7 trading days, with a total inflow of US$5.574 billion for the whole week, including US$2.548 billion in stablecoins, US$2.775 billion in BTC Spot ETF, and US$250 million in ETH Spot ETF.
Stablecoin and ETF channel capital inflow and outflow statistics (weekly)
Since bottoming out and rebounding in early April, after the first round of large inflows, funds showed some hesitation after reaching $100,000. This weeks large inflow of funds pushed BTC to challenge its previous historical high.
Selling pressure and selling
Since BTC returned to the $100,000 mark, long-term investors have started to reduce their holdings again, reversing the trend of gradually decreasing inflows into exchanges over the past five weeks. This week, 159,869.37 BTC flowed into exchanges. Centralized exchanges are still in an outflow trend, with the balance falling to 2,987,307, but the outflow rate has slowed down.
Centralized digital currency exchange BTC inflow and outflow statistics (weekly)
As a market stabilizer, the long-holding group started to reduce their holdings near the new high, with the scale of reduction during the week being 1,195.43 pieces.
Cycle Indicators
According to eMerge Engine, the EMC BTC Cycle Metrics indicator is 0.75 and is in an upward period.
EMC Labs
EMC Labs was founded by crypto asset investors and data scientists in April 2023. It focuses on blockchain industry research and Crypto secondary market investment, takes industry foresight, insight and data mining as its core competitiveness, and is committed to participating in the booming blockchain industry through research and investment, and promoting blockchain and crypto assets to bring benefits to mankind.
For more information, please visit: https://www.emc.fund
