The digital finance world is abuzz as both traditional and cryptocurrency markets show renewed vigor, with U.S. crypto funds making a dramatic recovery. This week, investments in U.S.-based crypto funds surged past $7.5 billion, signaling a robust appetite for digital assets in 2025. Market watchers attribute this to a mix of geopolitical developments and strategic asset diversification, with Bitcoin (BTC) recently hitting a new all-time high. As explored in our recent coverage of Bitcoin Surges Past $94,000 as Institutional Interest and Market Optimism Grow, the increasing institutional interest is a significant driver of this momentum.
Crypto as a Safe Haven
In light of recent geopolitical tensions—particularly the ceasefire negotiations between Russia and Ukraine—investors are increasingly eyeing cryptocurrencies and non-fungible tokens (NFTs) as a hedge against fiat currency devaluation. Raoul Pal, CEO of Global Macro Investor, suggests that we’re entering an “exponential age” of currency debasement, where traditional wealth storage mechanisms are losing ground. “You don’t own enough crypto,” Pal asserts, emphasizing that these digital assets “will never be this cheap again.”
NFTs, in particular, are gaining traction as both a speculative asset and a long-term store of value. Nicolai Sondergaard, a research analyst at Nansen, notes that NFTs are becoming “a vehicle for the wealthy” and serve as an outlet for asset diversification. They also benefit from strong community-driven appeal, adding layers beyond mere financial gains.
Investor Inflows and Market Dynamics
The influx of capital into U.S. crypto funds, with $785 million pouring in just last week, reflects a broader trend towards risk assets. This comes on the heels of a 90-day tariff pause announced by the White House, which slashed import tariffs by 24% for both the U.S. and China. The announcement has evidently stimulated institutional demand, as evidenced by a significant Bitcoin withdrawal from Coinbase—a record net outflow this year, indicating accelerating institutional interest. This aligns with the optimism seen in Bitcoin Jumps Above $97K as Traders Optimistic U.S.-China Trade Deal Possible, highlighting the impact of geopolitical developments on market dynamics.
André Dragosch of Bitwise highlights this as a crucial turning point for institutional crypto adoption. “Institutional appetite is accelerating,” Dragosch observes, noting the strategic maneuvers by investors to capitalize on current market conditions.
Stablecoins and Beyond
Yield-bearing stablecoins, too, are seeing unprecedented growth, now comprising $11 billion or 4.5% of the total stablecoin market. This marks a staggering increase from just $1.5 billion at the start of 2024. Pendle has emerged as a frontrunner in this segment, accounting for 30% of all yield-bearing stablecoin total value locked. With traditional stablecoins like USDT and USDC not passing interest to holders, Pendle estimates that stablecoin holders are missing out on substantial annual yields due to current Federal Reserve interest rates.
Meanwhile, Tether has surpassed Germany in U.S. Treasury holdings, illustrating a diversified reserve strategy that is proving advantageous amid market volatility. Tether now holds over $120 billion in Treasury bills, a testament to its conservative reserve management approach.
Looking Ahead
As the crypto landscape continues to evolve, the question remains: How long can this bullish momentum sustain? While the current trends suggest robust growth and adoption, market dynamics are inherently unpredictable. Investors will need to navigate this complex terrain with both caution and strategic foresight. As we move into June 2025, the crypto market’s next moves will be closely watched by analysts and investors alike, eager to see if this rise is a temporary surge or the dawn of a new financial era.
Source
This article is based on: Crypto, NFTs are a lifeboat in the sinking fiat system: Finance Redefined
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
