In the coming years, the global stablecoin market value is expected to expand from the current $250 billion to over a trillion dollars.
Author: Jeffrey Ding, Chief Analyst at HashKey Group
On May 21, 2025, the price of Bitcoin broke through $109,565, setting a new historical record. Under the resonance of three logical factors—trade easing, institutional investment, and supply tightening—Bitcoin once again demonstrated its unique value as digital gold, with its scarcity and consensus being amplified at this moment.
Notably, just a day before Bitcoin broke this threshold, the U.S. Senate advanced the procedural motion for the "GENIUS Stablecoin Act" with a vote of 66:32. The "GENIUS Stablecoin Act" will provide a federal regulatory framework for U.S. dollar stablecoins, allowing traditional banks to use existing deposit and loan channels to provide collateral and clearing services for stablecoin issuance. Coupled with the on-chain interoperability of DeFi protocols, this "on-chain to off-chain" liquidity bridge will unleash significant capital momentum. From the perspective of liquidity spillover effects, the scaled expansion of stablecoin supply will directly boost the available funds on exchanges and DeFi platforms, significantly reducing trading slippage while enhancing the feasibility of leverage strategies. Market volatility and price upward momentum will also be further stimulated in this process.
Similar to the U.S., Hong Kong passed the "Stablecoin Regulation Bill" on its third reading yesterday, which is expected to take effect within this year, giving the industry ample time to understand the requirements under the licensing system. This also means that Hong Kong has become one of the first regions globally to complete stablecoin legislation. The stablecoin bill in Hong Kong aims to provide a clear regulatory framework for the local market, promoting the compliant development of stablecoins.
We expect that in the coming years, the global stablecoin market value will expand from the current $250 billion to over a trillion dollars. More importantly, the compliance of stablecoins will attract more "quasi-dollar" funds into the market, endowing core assets like Bitcoin and Ethereum with stronger safe-haven and value storage attributes. As these funds gradually flow in, Bitcoin and Ethereum are expected to see a valuation increase of 20% to 50% within the next 6 to 12 months. Meanwhile, the maturation of compliant channels will provide a bridge for long-term capital such as pension funds and mutual funds to enter the crypto market, significantly enhancing the stability of market demand and effectively reducing structural risks. The interaction between policy dividends and market consensus is opening up new growth spaces for Bitcoin and crypto assets.
Beyond macro-level policy drives, the market itself is also reinforcing the logic of Bitcoin's scarcity. According to Glassnode data, the holdings of long-term Bitcoin holders have increased to 13.76 million coins, accounting for 65.6% of the total circulating supply, reaching a new high. Meanwhile, the number of Bitcoins held in exchanges continues to decline, with only 2.437 million remaining as of May 20, the lowest level since 2018. This means that the supply of Bitcoin available for trading is rapidly decreasing, and the supply-demand mismatch further solidifies the foundation for price increases.
At the same time, the strong influx of institutional funds has become a powerful catalyst for the market. MicroStrategy has added 7,390 Bitcoins in the past week, bringing its total holdings to 576,230 coins, valued at approximately $6.1 billion at current prices. Additionally, the Grayscale Bitcoin Trust (GBTC) and several Bitcoin ETFs have attracted over $633 million in net inflows in recent weeks. The continuous positioning of institutional investors through compliant channels not only strengthens the market's consensus on Bitcoin's scarcity and digital gold attributes but also lays a solid demand-side support for long-term price increases. This is a victory for "long-term thinking"; when institutions view Bitcoin as part of their core asset allocation, its value ceiling is completely reshaped.
The macroeconomic situation also provides a favorable environment for Bitcoin's rise. A statement by Trump in early May about achieving "historic cooperation with major powers" ignited market optimism regarding easing U.S.-China trade tensions. On May 12, the U.S. and China signed a tariff agreement, reducing mutual tariffs from a maximum of 84% to 10%. This unexpected policy breakthrough not only alleviated global economic uncertainty but also injected new upward momentum into risk assets like Bitcoin.
From policy easing to supply tightening, from institutional investment to the establishment of liquidity channels, this round of Bitcoin's rise is the result of multiple logical resonances. Behind the historical high is not only a frenzy of market funds but also signifies that global capital has entered a new round of value consensus reshaping for decentralized assets.
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