Global Liquidity Shift Leaves Cryptocurrency Market Trailing

Since mid-2025, the cryptocurrency market has faced high volatility and downward pressure. Total market capitalization has shrunk by 20–30% to $3.33 trillion, with Bitcoin dominance steady at 55% and volatility at 40%. Trading volume is waning and investor confidence remains low. Exchange-held Bitcoin reserves have dropped 8%, reflecting capital outflows to self-custody or safe-havens. Major tokens like SOL, ETH and BTC have fallen to late-2024 levels. Industry participants cite token oversupply, weak tokenomics, collapsed venture funding and reduced DeFi yields under 5%. Hacks and “black swan” events have further shaken the market. Looking ahead, analysts argue that global liquidity cycles—driven by U.S. bond supply and the Fed’s Standing Repo Facility—will supplant Bitcoin’s halving narrative. Projected liquidity injections of up to $10 trillion could channel $2–3 trillion into risk assets, fueling a broad crypto rally. At the same time, stablecoins are evolving into core financial infrastructure. Proposed U.S. CFTC rules may allow stablecoins as tokenized collateral. Growing regulatory clarity and real-world adoption in cross-border payments and corporate settlements will solidify stablecoins’ role. For traders, the key themes are liquidity-driven bullish bias for Bitcoin and the maturation of stablecoins as a foundation for new crypto applications.