Weekly Market Highlights Review: The Resonance of Stablecoin U.S. Treasury Transformation and Bitcoin's Strategic Rise in the New Cycle

This week, the cryptocurrency market was mainly characterized by fluctuations, with Bitcoin experiencing multiple pin bars, while Ethereum remained relatively strong, and related assets like UNI and ETHFI performed well. The Trump Media Technology Group raised $2.5 billion in private financing to purchase Bitcoin, and Pakistan is establishing a national-level Bitcoin strategic reserve. The $5 billion repayment from FTX stimulated a market rise earlier in the week. However, on Friday, even with favorable news of the SEC easing staking regulations, the market still saw a general decline, making the future market direction worth watching.

In terms of hotspots, stablecoins remain the main theme of the market, gradually becoming one of the strategic directions for the US government and global institutions; although the Bitcoin conference has not brought substantial benefits, mainstream opinions are worth paying attention to; the SEC's regulatory relaxation, the staking track, and the timing for a certain trading platform to enter the US market has arrived.

1. The Trend of Stablecoinization of U.S. Treasury Bonds

1.Circle IPO

On May 27, stablecoin issuer Circle refuted rumors of a potential sale and clarified that it is initiating an IPO, moving forward with plans to list on the New York Stock Exchange. Two days later, an investment institution announced plans to subscribe for 10% of Circle's IPO.

Key details are as follows:

• IPO Date: Expected to begin trading on June 5, 2025.
• IPO Filing: Circle submitted its IPO application to the SEC on April 1, 2025, and publicly released its prospectus on May 27.
• Stock code: will be listed on the New York Stock Exchange with the code "CRCL".
• Stock Issuance: Plan to issue 24 million Class A common shares at a price range of $24 to $26 per share. Among them, Circle will issue 9.6 million shares, and existing shareholders will issue 14.4 million shares. The underwriters have a 30-day option to purchase an additional 3.6 million shares to cover over-allotments.
• Financing goal: The IPO is expected to raise approximately $624 million, with a valuation of around $5.65 billion. Considering options and other shares, the fully diluted valuation could reach $6.71 billion.
• Investor Interest: Notable investors have expressed interest in purchasing up to $150 million in shares.

Circle's USDC stablecoin currently has a market value of approximately $60.793 billion, accounting for 24.59% of the total stablecoin market value, second only to Tether's 62.12%. So far this year, USDC's market value has grown by 38.44%, while Tether has only increased by 11.51%.

To understand why Circle is keen on an IPO, it is closely related to its partners.

• Success precedent: A trading platform went public on Nasdaq in April 2021, becoming the first major cryptocurrency exchange in the United States to be listed, with a valuation that reached as high as $85 billion.
• Market recognition: The listing of a certain trading platform has attracted institutional investors and enhanced the legitimacy of the crypto industry. Circle's IPO has also attracted well-known investors. Several institutions participated in the listing of a certain trading platform and also appeared on the potential investor list for Circle's IPO.
• Operating model reference: A certain trading platform has achieved financial stability through diversified sources of income. Circle has drawn on a similar model, relying on interest income from USDC and transaction fees to provide a solid financial foundation for its IPO.

A trading platform has signed a 50% revenue sharing agreement with the issuer Circle and receives 100% of the interest earned from the USDC product on the platform. For this platform, USDC has become the second-largest revenue driver after trading. The platform received approximately $900 million in USDC revenue from Circle in 2024, with nearly no operating costs, accounting for about 25% of its total valuation, highlighting the importance of USDC to its finances.

With the relaxed regulations of the bill, 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, such as cooperation with traditional banks or international regulatory agencies. Moreover, the growth of USDC directly benefits the platform revenue and public chain ecosystem of a certain trading platform, which may drive up its stock price.

2.Tether Turns to Emerging Markets

On May 25, it was reported that Tether's CEO stated that despite the U.S. advancing stablecoin legislation, Tether will still focus on overseas markets and pay attention to the impact of the bill on foreign issuers. Part of the reason is that its Bitcoin and other assets like mortgages may not meet the proposed standards.

3. The Close Connection Between Stablecoins and U.S. Treasury Bonds

The business model of stablecoins is extremely favorable for issuers. Stablecoins are typically backed 1:1 by cash and highly liquid assets such as short-term U.S. Treasury bills (. Unlike banks or money market funds, issuers do not distribute the interest income from the reserve assets to holders, but instead keep the earnings for themselves, thus achieving considerable profits when interest rate environments and market demand are favorable.

The business model of stablecoin issuers is impacting the global macroeconomy by increasing structural demand for U.S. Treasuries. The two major issuers, Tether and Circle, hold as much as $116 billion in U.S. Treasuries, placing stablecoin companies among the top 20 direct holders of U.S. Treasuries, surpassing sovereign nations such as Germany and Mexico.

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With the imminent passage of the US stablecoin bill, 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 coverage of US monetary policy.

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

Stablecoins and U.S. Treasuries also have similarities in economic functions:

• Security and Stability: U.S. Treasury bonds are considered the safest assets, and stablecoins ensure their value stability by holding Treasury bonds. The total market capitalization of the stablecoin market has reached $247.252 billion, most of which is composed of stablecoins backed by financial assets, such as Treasury bonds.
• Liquidity: Both are highly liquid, but stablecoins primarily circulate in the crypto market, while government bonds are in the traditional financial market.
• As Collateral: U.S. Treasury bonds are commonly used as collateral in traditional finance, and stablecoins are increasingly being used as collateral in DeFi.
• Source of Income: Stablecoin issuers earn interest income by holding government bonds, which is similar to how the government bond market operates. Tether's profits come directly from the government bond yields in its reserves, while Circle's revenue reached $1.68 billion in 2024, also primarily from government bond interest.

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) Second, Bitcoin Conference

1. Vice President Vance

• Policy Shift

Vans announced that the government has ended the hostile policies of the previous administration and cleared previous regulatory obstacles. He promised to establish a national Bitcoin reserve within 100 days to compete for global leadership. In addition, he is promoting legislation to establish a regulatory framework for dollar stablecoins, aiming to position stablecoins as a new engine for the dollar economy.

• The Strategic Role of Bitcoin

Wans pointed out that 50 million Americans hold Bitcoin, with the goal of increasing to 100 million. He emphasized that Bitcoin is a tool to combat inflation, policy risks, and financial censorship, specifically mentioning its potential as a strategic asset, especially in contrast to China's non-supportive stance.

• Regulation and Innovation

The speech mentioned that a transparent and innovative regulatory framework for digital assets will be established, incorporating them into the mainstream economic system. Vance criticized the regulatory approach of the former SEC chairman and promised to continue to eliminate regulators that hinder innovation.

• Community Participation and Future Outlook

Wans calls on the crypto community to continue engaging in politics, especially in the 2026 midterm elections, to promote favorable policies. He also mentioned the synergy between AI and crypto, emphasizing the need to pay attention to AI development to protect national interests.

2. U.S. Senator Cynthia Lummis

• The Importance of Market Structure Legislation

Lummis discussed the market structure bill with the Chief Legal Officer of a trading platform. She pointed out, "The market structure bill is particularly important for the businesses of conference participants, as many businesses involve the purchase and holding of Bitcoin, so custodial services are needed, or companies lending out Bitcoin, and there are various ways to interface Bitcoin with the US dollar in the Bitcoin futures market." She emphasized that this has a greater direct impact on the industry than the stablecoin bill.

• stablecoin legislation

The stablecoin bill has entered the final review stage in the Senate. The bill passed the 60-vote procedural threshold last week, despite opposition from Democratic leaders. If passed, it will be the first successful legislation from the Banking Committee in eight years. Lummis hopes to use this to promote broader regulatory legislation for the crypto market.

• Future Tax System

Lummis proposed a tax reform suggestion, specifically to exempt Bitcoin transactions under $600 from taxes. She mentioned, "The future tax system should exempt Bitcoin transactions under $600, such as buying coffee or dinner," and associated it with technologies like the Lightning Network and Strike. She has submitted the proposal to the Finance Committee, aiming to reduce the tax burden on small transactions.

• Bitcoin Strategic Reserve

She suggested that the U.S. buy and hold 1 million Bitcoins, which could halve the U.S. national debt of $37 trillion in 20 years. She explained, "By purchasing Bitcoin as a strategic reserve, we can leverage inefficient assets without additional borrowing, which will significantly improve the financial situation." This proposal sparked extensive discussion at the conference, particularly regarding national debt and fiscal sustainability.

• Regulatory Challenges

Lummis pointed out that over the past four years, regulators have taken a hostile stance towards digital assets, hindering the advancement of policies. She mentioned, "Without a confirmed IRS head, this has delayed the relevant legislative process," emphasizing the need for a clearer regulatory framework.

• The Global Strategic Significance of Bitcoin

She emphasized that Bitcoin is crucial for the economy and global defense, describing it as "a deterrent tool against aggression, particularly the threat from China." She mentioned that "military leaders also support this view," which further reinforces Bitcoin's position as a strategic asset.

3. SEC Commissioner Hester Peirce

According to reports, SEC Commissioner Hester Peirce stated during her speech at the Bitcoin 2025 conference, "I think Meme coins are more like collectibles, and it's important to understand that participants in Meme coins do not have the protection of securities laws. I believe we will provide more guidance in this regard. I think a regulatory committee for Meme coins could be established; there will always be gaps in regulation that need to be filled."

On October 10, 2024, the US SEC, FBI, and DOJ jointly filed a lawsuit against meme coin market makers and other crypto companies. If this regulatory committee is established, compliance costs will undoubtedly have a short-term negative impact on the meme market.

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) Three, Policy Regulation

1.【5.29】U.S. SEC Policy Statement: Three Types of PoS Network Staking Activities Do Not Constitute Securities Issuance

The U.S. Securities and Exchange Commission has issued a policy statement regarding staking activities on proof-of-stake networks, clarifying that three categories of staking activities do not constitute securities issuance. This policy was released on May 29, aiming to provide regulatory certainty for compliant staking activities while retaining enforcement authority over security tokens. The policy content is based on information from the SEC's official website, which details the following three categories of staking activities that are not considered securities issuance:

1. Self-staking: Node operators use their own crypto assets to participate in network validation.
2. Third-party non-custodial staking: Asset owners retain control over their assets and only delegate verification rights.
3. Compliance Custody Staking: The custodian strictly isolates client assets and does not use them for operations or re-mortgaging.

**The policy also points out that the network rewards obtained from the above staking activities belong to