The four keywords of the 2025 crypto market: from the Trump effect to the prediction frenzy

2025 is coming to an end, a year dubbed the “Year of Large-Scale Cryptocurrency Adoption.” Reflecting on the ups and downs of the four quarters, here are four keywords to summarize this year’s market evolution.

The entire year was filled with numerous extraordinary events: from Trump’s inauguration as US President in early January, to the trade tariff conflicts in April; from the billions of dollars gained by companies during the DAT (Digital Asset Trust) boom, to the prosperity and decline of ecosystems like ETH and SOL; from the rise of stock tokenization platforms being seen as the “perfect fusion of DeFi and traditional finance,” to traditional Nasdaq exchanges joining the tokenization craze; from the emergence of certain on-chain derivatives platforms, to the rise of two prediction market platforms valued at over $10 billion; from new regulations on stablecoins to the PayFi wave, from crypto IPOs to the normalization of crypto ETFs…

Amid the endless game of capital, attention, and regulation, the cycle of the crypto industry has deepened once more. This year was neither a pure bull nor a bear market; instead, it resembled a jumping monkey—highly volatile under the influence of Trump and many authoritarian governments. Some fell from the peak, others seized the opportunity to rise. The answer to victory or defeat may have to wait until 2026’s “Crypto Investment Memoir” to be revealed.

Q1: Trump Effect and Policy Framework Deepening

First Interaction Between New President and Market

In January, Trump was inaugurated. Following the momentum from last year’s election, Bitcoin briefly consolidated before approaching the $100,000 mark again. Three days before his inauguration, an official meme coin—TRUMP—sparked the year’s first wave of wealth.

That morning was unforgettable: when the team first shared the TRUMP contract, its fully diluted valuation (FDV) was only about $4 billion. But amid speculations like “Is the President being blacked out?”, “Is the US President issuing coins?”, “Does Trump want to cash out before inauguration?”, TRUMP’s market cap quickly soared past $10 billion, then $30 billion, eventually exceeding $80 billion. Many meme coin traders profited hugely, with some earning over $20 million.

This was the second wave of Trump’s personal influence on the market—first triggered by his November 2024 election victory. On January 20, Bitcoin hit a new all-time high of $109,800. The market widely believed Trump would be the “first crypto-friendly president.”

However, as the old saying goes—“Water can carry a boat, but also overturn it.” Trump’s arrival not only brought positive signals for macro policies and regulation but also controversies and manipulations involving his family’s crypto projects.

Real Progress in Regulatory Framework

In crypto policy, Trump delivered on some promises:

• Replaced SEC Chair with Paul Atkins, a long-time supporter of the crypto industry
• Appointed David Sacks as Special Advisor for AI and Crypto affairs at the White House
• Pushed forward the passage of the Stablecoin Regulatory Act (originally called GENIUS Act)

Most notably, the “Bitcoin National Strategic Reserve” topic. In early March, Trump signed an executive order announcing the establishment of a US Bitcoin strategic reserve, funded by confiscated crypto assets from the US government. He emphasized that this move “would not increase the tax burden on ordinary citizens.”

However, the forecast market results were disappointing—on a well-known prediction platform, the contract “Establish BTC reserves within 100 days of Trump taking office” was ultimately settled as “No” (reason: government confiscation of assets does not meet the reserve definition). This sparked widespread disappointment and criticism within the community.

Meanwhile, “insider traders” on certain on-chain derivatives platforms profited millions from the information gap regarding the “Bitcoin reserve” news, with precise timing of opening and closing positions exposing information asymmetry.

Other major events in Q1 included:

• A certain on-chain derivatives platform issued the most generous airdrop of the year, sparking envy among DAO participants
• A major exchange was targeted by North Korean hackers, losing $1.5 billion
• The Ethereum Foundation updated its leadership amid decision-making controversies, with former executive Aya appointed as the new chair

Q2: DAT Boom and Stablecoin Breakthrough

Trade War and Market Turmoil

In early April, Trump launched a global “tariff trade war,” tightening the world economy. On April 7, “Black Monday,” US stocks lost over $6 trillion in a single week, with the “Big Seven” tech giants losing more than $1.5 trillion.

The crypto market was not immune. After a month of volatility, the market finally collapsed: Bitcoin fell below $80,000, bottoming at $77,000; Ethereum dropped to $1,540, hitting lows not seen since October 2023; the total crypto market cap plunged to $2.6 trillion, down over 9% in a day.

The Start of the DAT Boom

Following the market’s deep correction and institutional reforms, Ethereum found a recovery opportunity. It was from this period that a powerful force drove the market—the explosion of the Digital Asset Trust (DAT) concept.

By late May, under the call of a well-known Ethereum ecosystem builder, a listed sports marketing company announced a change in its main business to become the first “Ethereum Digital Asset Trust Listed Company.” This move ignited the fuse.

By the end of June, with the successful IPO of a certain stablecoin exchange and its stock price soaring tenfold, the concept of stablecoins and crypto-related listed companies attracted attention from traditional finance markets. Stablecoin-related stocks on the Hong Kong Stock Exchange surged, with giants like JD.com and Ant Group announcing entry into the stablecoin field, sparking market buzz.

As this wave grew, Ethereum finally broke free from its long decline, with prices rising month by month, eventually reaching a new high of $4,800 after several months, approaching the $5,000 mark.

The DAT concept extended to more tokens—Bitcoin DAT was initiated by a major asset management firm, followed by a well-known Wall Street analyst and a mining listed company joining the fray. The number of Ethereum DAT companies surged to nearly 70, including:

• A leading mining firm holding 3.86 million ETH
• A reorganized sports marketing company holding over 860,000 ETH
• An emerging firm holding over 490,000 ETH

Notably, these three DAT companies’ ETH holdings far exceeded that of the Ethereum Foundation (less than 230,000).

Subsequently, SOL DAT, BNB DAT, and various altcoin DATs listed, with stock prices fluctuating wildly. After initial FOMO and market cooling, many DAT companies faced difficulties—many with billions of dollars in paper losses, and due to lack of real business, their market caps even fell below the value of their crypto holdings (net asset premium ratio below 1). During the hottest phase of the DAT craze, no one understood Zweig’s famous quote—“The gifts of fate have long been marked with a price in secret.”

Q3: Tokenized Stocks and Prediction Markets Drive Double Waves

New Life for Traditional Stocks on Chain

Following the successful IPO of a certain stablecoin enterprise, tokenized stock trading saw a real breakthrough. In early July, two well-known exchanges launched dozens of US stock tokens (including Apple, Tesla, Nvidia, etc.), marking the “last mile”—the first time US stock trading was truly moved onto the blockchain.

This was significant for many crypto natives. The early 2024 Bitcoin spot ETF and the July Ethereum spot ETF gave crypto traders the status of “official investors”; the emergence of tokenized stock platforms allowed “ordinary crypto traders” to directly trade traditional assets on-chain for the first time.

A major asset management firm subsequently issued its own tokenized stock products; even more striking, traditional exchanges with over $10 trillion in quarterly trading volume applied to the US SEC to launch tokenized stock trading services—indicating that traditional financial giants are no longer on the sidelines but actively participating.

On-Chain Derivatives and Stablecoins Confront Each Other

In the native crypto space, two forces are competing:

Derivatives Platforms Expansion: After a well-known on-chain derivatives platform, a competitor in the BNB ecosystem launched a fierce “growth offensive,” creating another wealth myth—many traders regretted missing out.

Aggressive Stablecoin Ecosystem Expansion: A stablecoin public chain claiming “support from Tether’s CEO” launched a “savings incentive” campaign with extremely generous airdrops—invest 1 dollar, and receive over 9,000 dollars worth of tokens, a 900-fold return. Meanwhile, a crypto project family launched the WLFI token (backed by the previously successful USD1 stablecoin ecosystem), offering investors a 6x return, with a public offering price of only $0.05–$0.15.

At that moment, everyone was dazzled by the infinite possibilities.

Q4: Liquidity Crisis and Prediction Market Awakening

“October” Crash and Market Turning Point

In early October, Bitcoin hit a new high of $126,000, with the market expecting the traditional “October rally.” However, October 11 shattered all expectations—a “legendary liquidation” event more severe than any previous crash.

The root cause again pointed to Trump: the night before, he announced a 100% tariff increase, causing panic. The three major US indices all declined sharply: Nasdaq down nearly 3.5%, S&P 500 down 2.7%, Dow Jones down 1.9%.

The crypto market was hit hard: Bitcoin dropped to $101,516 within 24 hours (a 16% decline), Ethereum fell to $3,400 (a 22% decline), and SOL plummeted 31.83%. Altcoins suffered “bloodbaths.” The scale of this liquidation exceeded previous events—total liquidations reached $30–40 billion, surpassing the crashes on March 12, May 19, and September 4.

Yet, crises breed opportunities. In this chaos, traders who shorted BTC or bought the dip made millions. The market began popularizing the “TACO Trading Rule” (“Trump Always Chickens Out”)—a strategy of shorting aggressive Trump rhetoric.

The Era of Dual Giants in Prediction Markets

As the TACO rule proved again, the market slowly recovered, but many retail traders had already exited their positions, leaving the scene.

In this tough environment, prediction market platforms became one of the few hot spots. Several prediction trading platforms’ valuations soared over months:

• One prediction platform, after a new Series E funding round led by a well-known VC with a $1 billion raise, reached a valuation of $11 billion
• Another platform (which successfully predicted Trump’s victory in the 2024 election and received investment from the NYSE parent company) was seeking a new funding round with a valuation target of $12–15 billion

These two platforms became the “duopoly” in the prediction market space. They had accurately predicted the 2024 election results and are now emerging as new pivots in the large-scale crypto adoption process.

Looking to 2026: Ongoing Policy and Capital Battles

Looking ahead, US regulatory policies and traditional financial attitudes will continue to dominate the “ups and downs” of the crypto market. For us crypto explorers, the only thing we can do is follow the trend and seek our own wealth within it.