Crypto Market Weekly Review: Stablecoin U.S. Treasury Conversion and Bitcoin's Strategic Position Enhancement

This week, the crypto market experienced fluctuations and adjustments, with Bitcoin showing significant short-term volatility multiple times, while Ethereum remained relatively stable, and related assets like UNI and ETHFI performed well. Trump's media technology group raised $2.5 billion in private financing to purchase Bitcoin, Pakistan established a national Bitcoin strategic reserve, and the initial positive news of FTX's $5 billion repayment boosted market sentiment. However, even with the favorable news of the SEC easing staking regulations released on Friday, the market still saw a widespread decline, and the future market direction is worth paying attention to.

In terms of hotspots, stablecoins remain the main theme of the market and are gradually becoming one of the directions for the layout of the U.S. government and global institutions; although the Bitcoin conference did not have substantial benefits, the mainstream viewpoints are worth paying attention to; with the relaxation of SEC regulations, the timing for staking tracks and certain trading platforms to enter the U.S. market has arrived.

1. The Trend of Stablecoins Becoming U.S. Treasury Bonds

1. Circle IPO

On May 27, stablecoin issuer Circle clearly stated that it is launching its initial public offering ( IPO ), with plans to list on the New York Stock Exchange. Two days later, a certain asset management giant announced plans to purchase 10% of Circle's IPO shares.

The key details are as follows:

• The IPO is expected to begin trading on June 5, 2025.
• Circle submitted an IPO application to the SEC on April 1, 2025, and publicly released its prospectus on May 27.
• The stock will be listed on the NYSE with the code "CRCL"
• Plan to issue 24 million shares of Class A common stock, with a price range of 24-26 USD/share
• The IPO is expected to raise approximately $624 million, with a valuation of about $5.65 billion.
• Notable investors expressed interest in purchasing up to $150 million worth of shares.

Circle's USDC stablecoin currently has a market value of approximately $60.793 billion, accounting for 24.59% of the total market value of the stablecoin market. Since the beginning of this year, the market value of USDC has grown by 38.44%, far surpassing Tether's 11.51%.

Circle is dedicated to the IPO closely related to its partner trading platform. This platform successfully went public in April 2021, attracting institutional investors and enhancing the legitimacy of the crypto market. Circle draws on a similar operating model, relying on the interest income from USDC and transaction fees to provide a solid financial foundation for the IPO.

A trading platform has signed a 50% revenue sharing agreement with Circle, and receives 100% of the earnings from the interest generated by the USDC products on the platform. USDC has become the second largest revenue driver for the platform after trading. In 2024, it received approximately $900 million in USDC revenue from Circle, with almost no operating costs, accounting for about 25% of its total valuation.

With the relaxation of regulations after the IPO, Circle can not only more easily obtain funds from the capital market for innovation, research and development, and global expansion, but also attract more strategic investors or partners to further expand its business scope. The growth of USDC directly benefits the income and ecosystem of a certain trading platform, which may drive up its stock price.

2. Tether shifts to emerging markets

On May 25, the CEO of Tether stated that despite the United States pushing for stablecoin legislation, Tether will still focus on overseas markets and pay attention to the impact of the "Genius Bill" on foreign issuers. Part of the reason is that its assets such as Bitcoin and mortgages may not meet the proposed standards.

According to reports, as of December 2024, Tether will still invest 18% of its reserves in assets with low liquidity and high risk, such as other non-stablecoin encryption assets and loans. This does not fully comply with the requirement of the GENIUS Act that mandates 100% of reserves to be in high liquidity, low-risk assets.

3. The close connection between stablecoins and US Treasury bonds

The business model of stablecoins is extremely advantageous for issuers. Unlike banks or money market funds, issuers do not distribute the interest income from reserve assets to holders, but keep it for themselves, thus obtaining considerable profits when the interest rate environment and market demand are favorable.

The holdings of U.S. Treasury bonds by the two major issuers reached $116 billion, placing stablecoin companies among the top 20 direct holders of U.S. Treasury bonds, surpassing sovereign nations such as Germany and Mexico.

As the U.S. Genius stablecoin bill is about to be passed, more and more stablecoin issuers will become channels for the digital dollar to enter the global economy, thereby enhancing the global accessibility of the dollar and expanding the reach of U.S. monetary policy.

The U.S. government has made it clear that it will use stablecoins to maintain the dollar's status as the global reserve currency. The Secretary of the Treasury stated: "We will maintain the dollar's position as the world's primary reserve currency and will use stablecoins to achieve this goal."

Stablecoins and U.S. Treasury bonds have similarities in economic functions, including aspects such as safety and stability, liquidity, use as collateral, and as a source of income.

2. Key Points of the Bitcoin Conference

1. Key points from Vice President Vance's speech

• Announced that the Trump administration has ended the previous government's hostile policies and cleared previous regulatory obstacles.
• Commit to establishing a national Bitcoin reserve within 100 days to compete for global leadership
• Promote the legislation of the "GENIUS Act" to establish a regulatory framework for the US dollar stablecoin.
• Emphasize the potential of Bitcoin as a strategic asset
• Commit to formulating transparent and innovative regulations for digital assets
• Criticize the regulatory approach of the former SEC chairman and promise to continue eliminating regulators that hinder innovation.
• Call on the crypto community to continue participating in politics and promote favorable policies.
• Mentioning the synergy between AI and encryption, emphasizing the need to focus on AI development to protect national interests.

2. Key points from the speech of U.S. Senator Cynthia Lummis

• Discuss the importance of the market structure bill to the industry
• The GENIUS stablecoin bill has entered the final review stage in the Senate.
• Propose a tax exemption for Bitcoin transactions below 600 dollars.
• It is recommended that the United States purchase and hold 1 million Bitcoins as a strategic reserve.
• Point out that regulatory agencies have held an adversarial attitude towards digital assets over the past four years, leading to obstacles in policy advancement.
• Emphasize the importance of Bitcoin to the economy and global defense.

3. Key points from SEC Commissioner Hester Peirce's speech

• Think of Meme coins more as collectibles, understanding that participants do not have the protection of securities law.
• Indicates that the SEC will provide more guidance related to Meme coin.
• Propose the establishment of a Meme coin regulatory committee

4. Other Important Statements

• Multiple industry leaders and politicians expressed their views on the future of Bitcoin, regulatory environment, and other topics.

3. Regulatory Policy Trends

1. The SEC clarifies that three types of PoS network staking activities do not constitute securities issuance.

On May 29, the SEC issued a policy statement clarifying that the following three types of staking activities are not considered securities issuance:

1. Self-staking: Node operators use their own encryption assets to participate in network validation.
2. Third-party non-custodial staking: Asset owners retain control over the assets, delegating only the verification rights.
3. Compliant Custodial Staking: The custodian strictly isolates client assets, which are not used for operations or re-mortgaging.

The policy states that the network rewards obtained from the above staking activities are considered compensation for validation services, rather than investment income obtained based on the efforts of others in operating and managing, and therefore do not meet the criteria for securities identification under the Howey test.

This policy is favorable for PoS public chains like ETH and related staking service providers.

2. SEC applies to withdraw the lawsuit against a certain trading platform

On May 29, the SEC submitted documents to the court requesting the dismissal of the lawsuit against a certain cryptocurrency exchange and its former CEO. The SEC, the exchange, and the founders' lawyers signed a joint dismissal agreement submitted to the Federal Court in Washington, D.C. The SEC stated that based on policy considerations, it deemed it appropriate to dismiss the case.

It is worth noting that the SEC has made it clear that the withdrawal of the lawsuit is "final", which means that the SEC cannot file a lawsuit against the platform on the same charges again.

For the platform, the next step may be to actively布局 the US market, and its ecological token is worth paying attention to.