PULP Research – May 2025 Crypto Market Review

"Institutional-Grade Insights, Analysis, and Trends in Digital Assets"

Executive Summary

May 2025 crypto markets were driven by a confluence of macro and on-chain factors. A pause in U.S. global trade tensions and a softer U.S. dollar sparked a rally. Bitcoin reclaimed, surpassing $100K and briefly touched a new all-time high at $112,330. Ether also vaulted above $2,000 showing newfound strength that has been absent for the previous months. This price surge coincided with record ETF inflows. We saw BlackRock's IBIT taking in about $6.35B in May. This was consistent with historical patterns linking expanding global M2 liquidity to crypto bull runs as PULP sees 84% correlation around a 60-day lag in M2. At the same time, Fed minutes and trade policy uncertainty elevated as the U.S. Fed officials flagged inflation and tariff risks. In just a month, we have had many developments. One month in the crypto markets can feel like a year.

Regulatory shifts continue to dominate headlines. In the U.S., a series of pro-cypto moves was enacted at the month's start with the SEC rescinding SAB 121 (with SAB 122 effective Jan 23, 2025), alleviating accounting hurdles for custody businesses. President Trump signed a crypto-friendly executive order, spawning a new SEC "Crypto Task Force" under Commisioner Peirce. Most importantly, Congress advanced the bipartisan GENIUS Act as the Senate cloture vote passed 66-32, underscoring regulatory clarity for U.S. stablecoins. In contrast, EU/MiCA rules came fully online implementing strict reserve and disclosure standards. Emerging markets also diverged as Brazil readied new crypto laws alongside its Drex CBDC, UAE expanded crypto licenses as app usage spiked, Nigeria cracked down on P2P and influencer promotions and Hong Kong tokenized government bonds while HashKey onboarded institutional products.

Sector-wise, the market saw new frontiers. DePIN networks like Helium and Hivemapper saw surging device counts and TVL. Solana-based DePINs now represent about a $3.25B ecosystem with 28k+ nodes, and Helium's LoRaWAN mobile user base topped 500k by Q1'25. AI-driven crypto projects and gaming tokens likewise outperformed, fueled by memecoins and their derivatives continue speculative swings with shifting social dominance metrics. Finally, RWA tokenization picked up steam as top RWA projects by market cap now include oracle and tokenization platforms like Chainlink and Ondo, and DeFi protocols like Pendle have added tokenized bond/yield products.

Market Dynamics

May saw Bitcoin break new record highs before a modest pullback, as easing geopolitical strains (U.S.-UK/China tariff pauses) and a weak dollar reignited risk appetite. Ether tracked Bitcoin upward, trading about $2,000, peaking near the $2,800 resistance zone) on optimism around the "Pectra" network upgrade that went live on May 7. On-chain metrics confirm profit-taking: Glassnode reported that short term holders realized about $0.75B per day at the peak, reflecting historically high realized profit spikes as traders exited into the rally.

U.S. macro indicators were mixed. Fed minutes from May 28 showed policymakers are concerned about persistent inflation and tariff-related slowdowns, keeping them on hold and entrenching bullish sentiment for crypto as a hedge. May CPI data (to be released on June 11) and the Fed's June meeting will test these views. Institutional flows remained a tailwind: after $3.7B of net ETF inflows in April, May brought even larger demand, notably BlackRock's IBIT having its single-largest month. Spot ETF basis yields rose above 9% in mid-May, prompting additional inflows on May 19 seeing about $667M net in US BTC ETFs. In sum, ETF flows have correlated strongly with Bitcoin's up-move – as global liquidity and ETF demand grew, so did price.

Despite gains, volatility remained elevated. Volume spiked on both up-swings and corrections, and on-chain indicators flashed caution: OI on futures rose, and one-year realized volatility remained above decade averages, hinting at a potential topping process. Some sentiment gauges, like Crypto Fear & Greed and PULP's proprietary sentiment model, briefly entered areas close to "euphoria," aligning with realized profit spikes. These signals suggest short-term profit-taking, even as longer-term cyclical models within PULP remain bullish.

Regulatory Tornado

U.S. GENIUS Act: The bipartisan General Act for International U.S. Stability, targeting stablecoin oversight, advanced dramatically. As mentioned, the Senate voted 66-32 for cloture on the bill. Sponsors emphasize its goal to provide regulatory clarity, protect consumers and keep innovation domestic. Critics like Sen. Warren argue it is too weak. Previous skeptics like Mark Warner and Kirsten Gillibrand now support getting a framework in place. If enacted, the GENIUS Act would mandate reserve and redemption standards for U.S. dollar stablecoins, alleviating a major source of uncertainty for issuers and exchanges. PULP projects that the GENIUS Act could pass as soon as the end of June.

Sector Spotlights

DePIN (Decentralized Physical Infrastructure): DePIN protocols continue explosive growth. Solana has become a hub for DePIN. Notably, Helium (IoT networks) onboarded a half-million mobile users and around 200k active hotspots by Q1'25. Token performance varied as Helium's HNT is down from early 2025 highs which PULP takes as a reflection on profit-taking. Geospatial tokens like Hivemapper's HONEY have seen strong community uptake and relative stability. We forecast continued TVL growth by year-end 2025 by about 50%, driven by new device deployments and enterprise pilots.

AI x Crypto: AI-related crypto tokens and on-chain AI data protocols are drawing capital. Projects that tokenize AI compute or data services have seen increased venture interest, and Ethereum "layer-2" projects embedding AI oracles are emerging. Use cases include decentralized AI marketplaces and machine-learning-assisted DeFi strategies. While still early, we are expecting a few notable token launches in Q3-Q4 in the on-chain LLM governance and AI-powered hedge strategy spaces. These launches offer a high-risk chance at quick growth which we in general caution against but will keep attuned to as things move forward and the market matures.

Memecoin Derivative: Meme coins remain speculative, but market structure is now shifting. On-chain data shows decline in concentration as Bitcoin's dominance ticked up this month, while meme-dominated altcoins like DOGE, SHIB, PEPE etc. have plateaued or even receded. Social dominance on X and other social media platforms have spiked around market events. Industry chatter about "meme ETFs" has also driven some volume into coins like DOGE. We caution that social momentum has amplified retail flows, which leads to sudden volatility. A key risk is that over-leveraged meme derivatives could see rapid unwind if sentiment shifts. PULP is fine with taking some speculative plays but urges caution against these coins as they are highly manipulated and extremely volatile with no actual use case.

Gaming Tokens: Gaming/metaverse tokens like AXS, MANA, SAND and APE rebounded sharply in may on strong game launches. Monthly trading volume for top gaming tokens roughly doubled from April, and on-chain unique active wallets in gaming DApps rose about 25%. Catalysts include upcoming AAA game releases built on-chain and the launch of in-game NFTs convertible to real goods as we have seen Ubisoft and Atari exploring on-chain assets lately. PULP's sector specific models have identified a handful of undervalued gaming tokens with large upcoming roadmaps. However, gaming tokens remain heavily controlled and liquidity reliant, leading us to caution investment due to volatility.

Real-World-Assets Tokenization: RWA token markets matured. The largest RWA "tokens" by market cap are now utility/oracle chains like Chainlink and Quant as well as DeFi protocols to bridging to assets. New launches have emerged in May. PLUME launched as a hybrid L1 for on-chain bonds and real estate, a potential speculative play. Moreover, traditional finance entities are piloting on-chain bonds and funds as we saw U.S. muni bonds tokenized on Algorand. Further, we saw JPMorgan announce a partnership with Chainlink and Ondo doing work in this sector. Regulatory support in some jurisdictions like the Hong Kong stock exchange exploring tokenized bonds is suggestive of steady growth. PULP anticipates tokenized commercial real estate pools and more tokenized fund structures to go live in 2025, likely boosting the RWA sector TVL by 20-30%.

1. Japanese Bond Market Collapse

Japan's government bond market has plunged into turmoil. It is interesting because this was a market that was once a byword for stability. Yields on long-dated Japanese Government Bonds (JGBs) surged to all-time highs, with the 30-year yield spiking to 3.185% on May 20, 2025. This rapid rise in yields reflects investors' mounting fears over Japan's fiscal sustainability, give a debt-to-GDP ratio above 250%. Japan is flirting with a fiscal debt doom loop where rising yields feed credit risk and beget still higher yields. Liquidity evaporated from the JGB market as trading volumes dropped about 15% below average by early June, and bid-ask spreads widened markedly. This level of illiquidity in the world's third-largest bond market raises volatility risks globally, prompting many investors to seek safety elsewhere.

Figure 1: Japan's 30-year government bond yield reached record highs in May 2025, signaling a liquidity crisis.

The knock-on effects of Japan's bond collapse are already ripping through world markets. Bitwise's head of research noted that JGB instability is spilling into other bond markets, especially the US Treasury market. Foreign buyers like Japan have traditionally anchored U.S. bond demand. So, this JGB crisis forced Japanese institutions to rebalance and possible sell foreign holdings. Japan's Ministry of Finance is considering issuing more short-term debt at home to contain costs which could drain Japanese capital from U.S. Treasuries, unsettling global yields. The spike in JGB yields wiped out an estimated $500+ billion in bond values, eroding confidence in "safe" sovereign debt. As a result, risk-off sentiment has grown among institutions and some are reevaluating Bitcoin as a hedge against sovereign default risk. PULP agrees with these institutions that Bitcoin is an immutable asset and a hedge against sovereign risk, sovereign default and geopolitical uncertainty. Gold is another asset that PULP loves in times of geopolitical turmoil. When fiat currency is debased and printed without corresponding service or product being produced it is correct to turn to these assets. Tellingly, Bitcoin's price hit a new all-time high of $112,000 on May 22 amid the JGB turmoil, suggesting that capital flows were seeking refuge in crypto. Japanese investors themselves even appear to be rotating into digital assets. As JGB yields hit records, BTC/JPY trading volumes spiked and local Bitcoin prices jumped about 2.3% in one day. PULP saw this as a reflection of growing domestic demand for alternative stores of value, something we are also noticing in the U.S. at this time.

Crucially, this crisis underscores the opportunity for blockchain-based financial rails, from cryptocurrencies to cross-border payment networks, as trust in traditional systems falters. When government bonds (the backbone of fiat finance) start behaving like risky assets, market participants naturally begin to explore alternative "trustless" rails. For example, Ripple's XRP is positioned as a liquidity bridge for cross-border payments independent of any single sovereign nation. Even before the JGB collapse, we saw rising adoption of such solutions: in May, Ripple secured its first bank clients in the UAE to use its blockchain payment network for fast, more transparent international transfers. According to Ripple's 2025 report, 64% of finance leaders in the Middle East and Africa cited faster settlement as a key motive for adopting blockchain in cross-border flows. A global backdrop of bond market dysfunction only reinforces this motive. If major economies resort to capital controls or if fiat liquidity freezes, digital asset rails (whether XRP's On-Demand controls or stablecoins) offer a plan B for moving value across borders. In short, Japan's bond market woes are accelerating interest in crypto as a parallel financial system, one that we can operate when confidence in government debt and fiat plumbing is at a breaking point. The chaos in JGBs is painful, but it is validating the use-case for digital assets in global finance.

2. American Tariff Woes and Capital Control

The United States is grappling with the unintended consequences of the tariff-centric trade policies initiated under the Trump administration. Aggressive U.S. tariffs have backfired economically, stoking inflation at home and retaliation abroad. America is far from winning any type of trade war. A Wharton analysis projects that Trump's tariffs will reduce long-run U.S. GDP by about 6% and average wages by 5%, equivalent to a $22,000 loss per middle-income household. These are some stark numbers. These tariffs were meant to shrink the trade deficit and revive U.S. manufacturing, but instead American consumers and businesses are paying the price via higher costs. The cumulative tariff bill for U.S. importers is massive, one estimate pegged the total cost at $1T through 2025, with heavily trade-exposed states like California facing about $139B in tariff costs. Critically, tariffs function as a tax on imports. Moreover, U.S. households have effectively been taxed to fund a trade policy that dampens growth rather than spurring it. As the Penn Wharton model notes, tariffs are even more economically damaging than equivalently sized income tax hikes. This is largely because they undermine the openness of the economy and distort capital flows. America's protectionist turn is punching a heavy toll, one that is measured in lost GDP and squeezed household budgets. Essentially, America failed to deliver the promised industrial renaissance.

International partners of America have not stood idle. Globally, retaliation is further fragmenting the trade landscape. In early 2025, the U.S. shocked even its allies by slapping 25% tariffs on most imports from Canada and Mexico, plus a 10% levy on Canadian energy in attempt to force "fair" terms as Trump puts it. The response was quick as Canada hit back with 25% tariffs on $155B of U.S. goods. In the same vein, China faced new 10% U.S. tariffs on its goods and Europe saw steel and aluminum tariffs that could cost $8B+ a year. Rather than bringing trade partners to heel, these moves triggered a tit-for-tat spiral. Long-standing agreements like NAFTA (now USMCA) were strained as even friendly nations were forced into countermeasures. The resulting climate is one of deteriorating global trade volumes and reconfigured supply chains. This was an effective partial unwinding of globalization. The WTO has warned that world trade growth is contracting amid these disputes. The U.S. "America First" stance has led to higher costs, disrupted supply lines and frayed alliances. Even the dollar's dominance is jeopardized by this approach. Normally, U.S. trade deficits supply dollars that trade partners reinvest into U.S. assets, the cornerstone of dollar dominance. As hinted, foreign investors sold $63B in U.S. equities during March and April 2025. Additionally, the U.S. Dollar Index is down 8% this year, approaching its lowest level in 3 years. The Atlantic Council observes that Trump's tariff policy risks undermining dollar dominance by disrupting the economic relationships that sustained the global dollar system. Countries that once recycled their trade-surplus dollars into U.S. treasuries are now rethinking that strategy in light of U.S. trade hostility.

Rising fears of capital controls are adding another layer of risk. With the U.S. running large deficits and now actively impeding free trade flows, many economists are openly debating the possibility of capital controls, something that was once considered unthinkable for America. This is typically in the form of taxes or controls on cross-border capital flows. As Reuters' Mike Dolan notes, tariffs alone do little to address the relentless demand for U.S. assets that underpins the strong dollar and trade imbalance. Trump-sided thinkers have suggested the revival of James Tobin's idea of taxing foreign exchange transactions. Even Treasury Secretary Scott Bessent has not ruled out unconventional steps. While no official policy of capital controls exists, sympathetic investors are "freely battling around the option." One prominent macro hedge fund manager argued that taxing inward investment could raise far more revenue than tariffs and might better achieve the goal of rebalancing trade. Pursuing capital controls would be the "nuclear option" in global finance. As Dolan warns, even hinting at deterring foreign capital would likely trigger a sharp dollar selloff and a collapse in U.S. stock and bond markets. It's a scenario where the cure could be worse than the disease as the say. Closing the capital account to force manufacturing home would also scare off the very investment that funds U.S. deficits. Despite this, the fact that such ideas are gaining traction is telling. There's even speculative talk of capital controls to prevent flight into crypto, where Washington might restrict conversions to Bitcoin if the dollar's decline accelerates. While that remains hypothetical, current trends make one thing clear: investors are hedging against U.S. policy risk. Gold is up, the dollar is down and U.S. allies are exploring dollar alternatives. Notably, Saudi Arabia just joined a China-led cross-border digital currency project (mBridge) aimed at settling oil trades in non-USD currencies. This is a symbolic step toward de-dollarization. These signals collectively point to waning faith in the U.S. to manage its economic relationships responsibly. For crypto, this backdrop is validating. At PULP, we believe that if capital controls or a breakdown of the fiat order materialize, digital assets will become a critical escape valve. Just as excessive tariffs are driving nations to diversify away from the dollar, PULP also sees that they are also driving investors toward borderless financial systems like crypto that authorities can't as easily politicize.

3. U.S. Bond Market Dysfunction Boosts the Case for Digital Reserve Assets

America's once-reliable Treasury market is showing signs of dysfunction, raising alarms for global investors and U.S. policymakers alike. In theory, U.S. Treasuries have been the ultimate "risk-free" asset and a go-to safe haven during equity turmoil. In practice, that narrative is crumbling. Despite a major stock market correction in early 2025 (S&P 500 fell 17% over 5 months), Treasury yields have not fallen as one would expect in a flight-to-quality. The 10-year Treasury yield, around 4.2%, is higher than it was before the equity selloff, refusing to rally even as trillions in stock value evaporated. This "sticky" yield suggests that Treasuries are failing to attract the usual safety-seeking bids. In other words, global investors are no longer reflexively piling into U.S. bonds when risk-off waves hit. Several factors are at play here. Inflation is still above the Fed's 2% target and has proven sticky, so real yields on many Treasuries are mediocre or even negative after inflation. Bessent essentially said that treasuries are negative after inflation in an interview aired on CNBC. This is obviously not appealing to investors and potential buyers. The Fed's own hawkish stance also removes a catalyst that would normally boost bond prices because no quick rate cuts are in sight. Beyond economics, political and geopolitical clouds hang over the U.S. bond market. Goldman Sachs analysts observed that negative trends in U.S. governance and institutions are eroding the appeal of U.S. assets for foreign investors. The recent debt-ceiling standoffs, unorthodox policies and trade disputes are undermining foreign confidence. It appears foreign central banks are quietly diversifying away from Treasuries and there's open speculation that U.S. rivals might "weaponize" their large Treasury holdings in a trade or currency war. China, which still holds around $800B in Treasuries, is the focus of such talk. Given the U.S.-China tensions, this is apparent to us. Although Bessent publicly downplays the idea of China "dumping" Treasuries en masse, the data show a steady decline in foreign ownership. Major holders like China and Japan have been trimming their Treasury portfolios to multi-year lows, whether for strategic reasons or because hedged returns no longer justify the risk. For instance, Japan's currency-hedged yield on U.S. bonds recently turned negative, removing Japanese insurers incentive to buy U.S. debt. And Persian Gulf states like Saudi Arabia, who are flush with petrodollars, have slowed their Treasury purchases as they pursue investments in emerging markets and plan for a post-oil future. The result here is a U.S. bond market with fewer reliable foreign backstops. This is interesting timing here as the U.S. is issuing more debt.

The supply-demand mismatch is evident. Falling foreign demand comes at a time when U.S. fiscal deficits are forcing an avalanche of new Treasury issuance. In Q2 2025, heavy Treasury supply contributed to negative total returns in high-quality bonds, even as equities rebounded in May. The Treasury market also suffered a bout of poor liquidity in April, 50 bps yield spikes and widening repo spreads, fueled by forced selling. Analysts at AllianceBernstein noted that during the April sell-off, dealer balance sheets filled up with unwanted Treasuries as volatility and margin calls led to a "lack of buyers in the market." There were rumors of foreign investors pulling back in that rout, though Bessent claimed to see no evidence of large foreign dumping in April. A common thing that we see is Bessent having to put out fires when he is asked about these things. It is important to read through the lines of what he says as it is typically an indication of what they are planning. The fear of large foreign investors dumping of bonds was enough to pressure prices at the time.

It is very telling that U.S. officials are now actively managing the bond market's image. Bessent and his team have one job. That job is to prevent the 10-year yield from breaking above 5% and to signal backstops if needed. His job is essentially to peddle these bonds. Such interventions were scarcely contemplated in the past, but today the Treasury Secretary is laser-focused on "funding costs and term premium," effectively jawboning the market. When policymakers have to reassure that there's "no systemic stress" in Treasuries, it underscores the fragility of the situation.

All of this strengthens the case for digital assets as the new reserve hedge in the financial system. If the 20th-century paradigm was that U.S. Treasuries were a risk-free reserve, the 21st-century seems to be shifting toward digital assets being the anti-fiat reserve. PULP is already seeing the early signs. Bitcoin is increasingly viewed as a "safe-haven asset in this environment," according to analysts at Bitwise. They argue that Japan's fiscal stress test is really a stress test for all modern fiat. Bitcoin, with its hard supply cap, is a hedge against the devaluation of sovereign debt. Former BitMEX CEO and one of our favorite economists Arthur Hayes shares a similar view to this. He believes that the looming devaluation of the gargantuan stock of U.S. Treasuries will be a catalyst that drives Bitcoin to $1M by 2028. PULP agrees with this idea more strongly in the vein of utility assets becoming the backbone of a new, modernized financial system. The current financial system is archaic and crumbling. At PULP, we believe that the blueprint has already been written to replace it. It is not a matter of if, it is a matter of when. Hayes' thesis is that as nations and investors flee an over-levered U.S. bond market, they will seek refuge in assets where no government can print, namely Bitcoin. We already are seeing corporations and funds treating Bitcoin as a reserve asset and companies like MicroStrategy continue to accumulate BTC as a treasury holding. Grayscale noted that U.S. fiscal risks are generating more demand for Bitcoin, including in the form of "Bitcoin Treasury" corporations. These public companies holding BTC on their balance sheets enjoy valuation premiums, signaling traditional investors' appetite for indirect crypto exposure as a hedge. Even on the sovereign level, hints of a shift are emerging. El Salvador famously holds Bitcoin as part of its reserves and election campaigns in countries like Ireland and England have had a focus on the establishment of strategic national Bitcoin reserves. With the U.S. announcing the "Strategic Bitcoin Reserve," it was effectively acknowledged that Bitcoin is now a strategic asset in national policy.

Falling confidence in U.S. Treasuries is coinciding with the rising credibility of crypto. It's a slow evolution, but as Treasuries lose their luster with net negative real yields, savvy capital is hedging with digital gold and physical gold. Bitcoin's immutable, non-sovereign nature makes it an attractive reserve for the digital age. We may be witnessing the early days of a new reserve paradigm, where Bitcoin and other scarce crypto-assets serve as a n inflation-proof store of value alongside (or even in place of) traditional bonds.

Bitcoin isn't alone in this evolution. While BTC may serve as the reserve layer, utility tokens are emerging as the transaction layer of the new digital financial system. These assets including but not limited to XRP, which enables real-time cross-border settlement, and ETH and SOL, which underpin smart contracts, offer productive infrastructure-like functions which we see as beneficial opposed to the passive store-of-value role for BTC. In many ways, utility coins are the new "yield curve" of crypto: their value is tied to the usage and throughput of decentralized systems, not government policy. Just as oil once priced global industrial activity, tokens like LINK and AVAX may increasingly price digital economic activity.

As we have mentioned, institutions are taking notice. Inflows are now not just chasing Bitcoin and Ether, but also positioning into scalable utility networks. Blackrock's BUIDL fund, for example, already incorporates tokenized RWAs on Ethereum, while UAE and APAC institutions are piloting XRP and XDC-based rails for treasury management. Even sovereign-level experiments, like the mBridge CBDC settlement platform, hint at an emergent multi-token, multi-chain future where utility coins are essential for value transfer.

While Bitcoin may be the anchor and first member of the anti-fiat era, utility tokens are the vessels that will carry real-world value across this new financial system with Treasuries eroding and fiat rails fragmenting. What has been planned for years, a parallel digital financial and reserve system is coming.

4. U.S. Debt Crisis and Social Decay

America's economic and social foundations are showing cracks, underscoring a broader decline of the fiat-driven status quo. Consider a few barometers of national well-being in 2025 that we will highlight. Obesity has reached record highs, 42% of U.S. adults have obesity, culminating a decades-long uptrend. Drug overdoses, particularly from fentanyl, remain at epidemic levels. Despite a slight improvement in 2024, over 90,000 Americans still die from overdoses each year, and fentanyl-related deaths in 2022 were more than double the toll of 2019. Household financial stress is also climbing. The percentage of credit card accounts that are 90+ days delinquent hit 0.9% in Q4 2024, the highest level in 12 years (this is the highest ever recorded since the Philly Fed began tracking it). In other words, Americans are so overextended that they can't even make minimum payments. This is a red flag reminiscent of the early 200s pre-crisis era. These disparate data points including obesity, overdoses and defaults may seem unrelated, but they reflect a nation living beyond its means and fraying at the edges. These are symptoms of a system where quick fixes like cheap food, painkillers and easy credit pile up over deeper structural issues. Social decay and economic malaise feed on each other. As our populace becomes burdened by poor health and debt, it becomes less productive while a faltering economy amplifies personal despair.

Underpinning these issues is the U.S. government's own fiscal trajectory. It really can only be described as a debt crisis in slow motion. Federal spending continues to grow. Gross national debt has blown past $36T in 2025 which is up from about $28T just a few years ago. Deficits are projected around $1.9T this year. The most alarming part about this is the growing interest payments that we believe could crumble the current financial state of the U.S. and the world. Thanks to rising rates and compounding debt, interest payments on the debt are exploding. In 2024, U.S. net interest outlays hit $881B, nearly triple the 2015 level. That means in 2024 the government paid more on interest that it spent on Medicare or Defense (and we all know how much they love spending on defense). Interest is now the second-largest federal expense, behind only Social Security. By 2025, interest will approach $1T (3.2% of GDP), and CBO forecasts it eclipsing its record share of the economy. If we are putting it simply, the U.S. is borrowing just to service past borrowing, a classic Ponzi-like spiral. The chart below illustrates this grim reality as we can see that net interest has shot above defense and is on course to double by the 2030s, consuming an ever-greater share of the budget.

Figure 2: U.S. federal spending trends - Net interest on debt (red) has surged and now exceeds defense (orange) and Medicare (green) spending, highlighting an unsustainable debt trajectory.

The implications of these trends are profound. An over-indebted government often resorts to the path of least resistance which means that it is highly likely that there will vast amounts of money printing to inflate away the debt. Indeed, many analysts argue that the only politically feasible way out for the U.S. is to let inflation run hot, devaluing the dollar, while nominal debts are paid in "cheaper" dollars. This amounts to a stealth default on savers and wage-earners, whose dollars lose purchasing power. It's actually already happening. The dollar's purchasing power is eroding at a pace not seen in decades as even with inflation down from the 2022 peak, prices are cumulatively about 15% higher than three years ago. The American public feels this acutely as real wages have stagnated, housing and healthcare costs are punishing and nearly 60% of American live paycheck to paycheck. The social fabric strains under such pressure, manifesting in those obesity and overdose stats as people seek escapes. Raoul Pal, veteran macro analyst, warned recently that we are entering an era of "exponential currency debasement." We will soon see a rapid decline in fiat currency value as governments double-down on debt and money print. PULP agrees with Pal's take and advise to accumulate digital assets at this time as these low prices will never be seen again, even in the coming bear markets. Digital assets are a lifeboat in a sinking fiat system. Unlike fiat money, Bitcoin can't be debased away by political decisions as its supply is algorithmically fixed. Moreover, unlike relying on government entitlements (which lately looks more shaky than ever especially when interest is devouring the budget), crypto represents a self-sovereign way to preserve wealth.

Crypto adoption is being propelled by the very failings of the fiat system. Every pillar of the legacy system that erodes, whether that be public health, social trust or fiscal discipline, adds to the narrative that "fiat is failing." PULP sees the writing on the wall. Accumulating dollars in a bank yields little, while inflation quietly hollows out savings. In contrast, Bitcoin has appreciated an average of about 150% annually over the past decade, massively outpacing inflation and every other traditional asset. Crypto markets can be very volatile though, but to us volatility is a price worth paying to escape the steady certainties of fiat decline (which includes taxation, debasement and control). Notably, 2025 has seen a surge in interest for Bitcoin IRAs and 401k options, as investors seek to hedge their retirement portfolios against dollar debasement. Even institutions are joining in: just this month, one of America's oldest insurance companies announced a Bitcoin allocation in its general account, citing long-term inflation risks. At the policy level, there's recognition that a paradigm shift is underway. Consider that the White House Council of Economic Advisers recently acknowledged digital assets could "help fill gaps in the legacy financial system" in certain scenarios of instability. What's the bottom line here? Metrics of American decline are doubling as metrics of crypto's opportunity. The worse it gets, the stronger the case for moving the current financial system into the crypto sphere where monetary policy is transparent and math-based. PULP agrees with economist Philipp Sandner as he puts it that "Bitcoin and crypto won't fix America's social issues, but they give individuals a chance to opt out of the financial repression and protect their purchasing power." In a world of record overdoses and obesity, it is evident that we are already in a debt crisis. A debt crisis does not mean homes will be burned down and your neighbors are riding in a humvee wielding spears and torches. It means that there is social decay, financial dismay and distrust of the system. PULP recommends opting out of this fiat system in order to save yourself and the ones you love. Crypto may not be a cure-all, but it's a lifeline for wealth preservation as the fiat system creaks under its own weight. At PULP, this is not just investing for us, this is personal. When we are born, we are born into a rigged game where we are already down 20. This is our chance to escape the system and front-run the coming changes in society and the economy. In just a few years, blockchain technology, cryptocurrency and AI-controlled systems will dominate. The time is now to put the work in, do the research to ensure that your life won't be controlled by the authoritative technocratic system. Like we said earlier, it is a matter of when, not if. Act now.

5. Macro Tailwinds Signal Risk-On Asset Revival

Even as the first half of 2025 delivered volatility, the macro stars appear to be aligning for a risk-on shift that could strongly benefit digital assets. A trio of factors are forming a storm upfront: a weaker U.S. dollar, a resurgence in global liquidity, and a pivot toward monetary easing. These are all classical fuel for asset price inflation. The U.S. Dollar Index (DXY), which measures the dollar against other major currencies, has been on the decline. By late May, the dollar had plummeted to its lowest level in about 3 years. This dollar weakness reflects not only geopolitical concerns and trade wars, but also markets front-running an expected Fed policy shift. A falling DXY tends to be bullish for emerging markets, commodities and crypto, as it loosens financial conditions globally (many debts and trade contracts are in USD). Bitcoin historically has an inverse correlation with DXY, so when the dollar falls, BTC and other crypto assets often rise as alternate stores of value gain appeal.

Figure 3: Global M2 money supply (black, left axis) vs. Bitcoin price (pink, right axis). A rise in global M2 in early 2025 preceded Bitcoin's breakout above previous all-time high about 80 days later. Liquidity drives crypto rallies.

More important is the global money supply and liquidity cycle, which has decisively turned upward in 2025. After contraction in 2022-2023, global M2 (aggregate money supply of major economies) began growing again in Q1 2025. Since January, global M2 is up about 3.3% and accelerating. The rise in liquidity is not U.S.-centric, it's coming from multiple fronts. China's central bank, for instance, has been easing policy to combat its growth slowdown, injecting hundreds of billions of yuan. The Bank of Japan has quietly continued its yield-curve control until the recent bond hiccup. Europe's money supply is also stabilizing as the ECB pauses its hikes. History shows a strong link between global liquidity and crypto performance. As we looked previously, the alignment of the Bitcoin price and lag models for M2 is eye-opening. PULP still maintains that this alignment reigns true and Bitcoin should go higher as the days go on. Liquidity is oxygen for markets, and crypto is often the most sensitive barometer of liquidity among asset classes. During the 2020-21 cycle, unprecedented money printing directly fueled crypto's explosive growth. Now, while we aren't back to official Fed quantitative easing, the directional change, from tightening to neutral or easing, is enough to shift sentiment. Even the U.S. Federal Reserve is expected to pivot. AllianceBernstein expects the Fed will cut interest rates three to four times this year as the tariff-induced slowdown hits. The bond market concurs as futures are pricing rate cuts by Q4 2025. This anticipated monetary expansion is a green light for risk assets that struggled under the high-rate regime of 2022-24.

It is important to note that these macro tailwinds come as we move later in the business cycle, a phase typically conducive to outperformance of non-traditional assets. We're likely past the peak hawkishness of central banks as the Fed and others seemed to have overshot on tightening and are now cautious amid slowing growth. Historically, when the Fed stops hiking and especially when it starts cutting, high-beta assets rally. We saw it in 2019 and in 2001 and possibly could see it now with equities and crypto tending to bottom just before rate cuts commence, then begin a cyclical bull run. Crypto, in particular, often leads the pack coming out of bottoms, given its 24/7 liquidity and speculative nature. This cycle has a twist: the presence of large institutions in crypto markets means institutional liquidity cycles are at play too. This cycle has a twist though with the presence of large institutions in crypto markets. This means that institutional liquidity cycles are at play too.

One piece of the crypto cycle that has lagged is the famed "altcoin season." Thus far in 2025, Bitcoin has dominated gains, a classic pattern in which BTC rallies to new highs first, hitting $112k in May, while many altcoins are still below their peaks. There are growing signs that altcoin season has been delayed, not denied. In Q2, the total altcoin market cap, excluding Ether, added $126B. This is a 25%+ jump that has analysts excited. PULP's technical models point out a breakout in TOTAL3 index against the U.S. money supply, suggesting that altcoins could be on the verge of their most powerful rally since 2017. Historically, as liquidity floods back, investors start moving out along the risk curve: first Bitcoin and ETH, then mid-cap altcoins and eventually small-cap tokens and trends like NFTs. PULP believes we could be entering that middle phase soon once this accumulation phase ends. We've also observed rotation into altcoins in recent weeks. Solana and Cardano saw double-digit rebounds and even long-dormant tokens began to spring to life. Some large-cap alts are announcing protocol upgrades or new partnerships timed with the market upturn, sparking renewed interest. If history rhymes, the peak of altseason, when obscure tokens skyrocket, tends to come after Bitcoin has established a new sustained high and begun to range-trade. PULP sees that scenario possibly playing out in the latter half of 2025.

It's worth addressing the narrative that institutions are actively shaking out retail investors in order to accumulate. Big players deliberately engineer price dips or amplify FUD to scare retail into selling, only to quietly buy those exact dips. On-chain data and market behavior lend some credence to this dynamic. Data from Amberdata's Q1 report shows that during the sharp February-April pullback, retail investors were panic-selling while institutional and high-net-worth investors were buying. PULP was also buying as we were tracking institutional and whale wallet action. We follow the money and what the smart money is doing. They are the ones who control and manipulate the market. Institutions were strategically accumulating amid price weakness, while retail exhibited uncertainty and volatility. We also saw large U.S. Bitcoin ETFs like BlackRock's experience net inflows during downturns, meaning smart money was using the dip to build positions. Coinbase's premium index, which tracks big buyer activity, flipped positive in those weeks as well. Meanwhile, social sentiment was extremely bearish, a classic contrarian indicator that whales and PULP exploited. Buying when others are fearful is a simple principle that PULP follows. These ideas highlight the sophistication gap that PULP attempts to close: Institutions can feed negative narratives to the media and then scoop up coins on the cheap from capitulating hands in a bear market. We are seeing that play like we have endless times before. Like we said, the game is rigged. The big money controls the news, it is all a distraction for them to squeeze all the money possible out of retail. Look at the Bitcoin narrative. Historically, the news conglomerates and politicians were screaming about how it was a scam and you should keep your money away. Look at it now and everyone is saying to buy Bitcoin and there is even legislation out that explicitly encourages people to buy and hold Bitcoin. Funny how things switch like that. As Arthur Hayes says: "weak hands are the nourishment of strong hands in a bear market." We are seeing that play out. Bitcoin addresses holding 1,000+ BTC have steadily risen this year, even as smaller addresses fluctuated. And now that the market is turning up again, those coins are in strong hands. Soon enough, the news shows will be showing the green charts and saying how quickly crypto is rising, all for the institutions and whales to pull the rug from the unknowing retail buyers who put their measly 50 grand in it at the top.

This suggests that drawdowns and bouts of fear are prime accumulation opportunities before the broader uptrend reasserts itself. Institutions certainly seem to think so as they have been positioning aggressively. Fidelity's crypto desk, for example, reported that many of its clients treated the spring pullback as a "crypto Black Friday," significantly increasing allocations. Hedge funds that sat out 2022's winter are tiptoeing back in, providing incremental buy support. In the venture arena, late-stage crypto startups are seeing renewed interest, indicating fresh capital betting on the next wave. Even retail sentiment is quickly rebounding as U.S. crypto fund inflows toppers $7.5B so far in 2025 and new retail trading accounts on exchanges jumped 20% in May, likely drawn by the headlines of Bitcoin's rally to a new all-time high. All these are hallmark signs of a market transitioning from accumulation to early stages of a bull cycle in the coming weeks and months.

The macro winds are shifting in favor of risk assets, and crypto stands to benefit immensely. A weaker dollar, more global liquidity, and easier monetary policy form the perfect recipe for a crypto resurgence. The anticipated, delayed altcoin season appears to be around the corner, promising potentially explosive gains in the broader crypto complex. And with institutions and informed investors accumulating during the lows, the crypto market's foundation looks much stronger going into this next phase. It's often said that markets climb a wall of worry, and crypto's wall of worry, like regulation, hacks or macro fears, has been very tall. Still, it's climbing. Now with clearer skies ahead, the path of least resistance for digital assets may well be up. As always, volatility will accompany the journey, but the long-term institutional thesis for crypto is intact and only growing stronger amid the events of 2025. The current landscape looks a prime opportunity to position for the coming expansion. The shake-out appears to be over, the accumulation phase is well underway and the macro tailwinds are blowing in our favor. All that's left is to set the sails.

6. The $10B Buyback and Narrative Control of Musk v. Trump

While media headlines swirl around the escalating feud between Elon Musk and Donald Trump, the real story is playing out behind closed doors, on the balance sheet of the U.S. Treasury. In the beginning of June, the Treasury executed a $10B debt buyback, the largest in modern history. This isn't merely a liquidity maneuver, it's a warning shot in what many analysts now call the new era of stealth quantitative easing.

Figure 4: Treasury debt buyback and market impact analysis.

This Treasury-led buyback effectively injects liquidity into the financial system by purchasing government debt from the open market, similar to the Fed's QE, but orchestrated by the fiscal authority. The scale is historic, dwarfing earlier 2024 rounds of $2-3B. It's no coincidence that this unfolded simultaneously with narrative-managing events in political media.

While retail investors are distracted by the publicized Trump-Musk feud, seasoned observers see a well timed distraction. Trump, who recently signed off on expanded Palantir surveillance infrastructure, is playing his part. Musk, long embedded within U.S. military and intelligence contracting networks through SpaceX and Starlink, used DOGE as a populist on-ramp. Behind it was a gateway for integrating Palantir's data aggregation tools with blockchain infrastructure. The DOGE play was not just a meme or attempt to cut money, it was a cover for a digital infrastructure rollout.

Musk, Trump, Theil, Andreesen, Zuckerberg, Palantir, OpenAI: this clearly isn't fragmentation, it's coordination. These figures are all instruments of a larger design. What is coming is an AI-governed, blockchain-verified surveillance economy framed as decentralization. It's a fusion of finance and technocracy pretending to be innovation.

This is essentially just liquidity behind the curtain. Debt monetization is accelerating as the U.S. faces over $1.2T in annual interest expenses. Foreign buyers are exiting U.S. debt markets as China, Japan, and Saudi Arabia have reduced their Treasury exposure. This buyback may mask yield curve dysfunction and fiscal fragility, forcing the Treasury to re-enter the market to buy its own IOUs of expiring debt. This is a controlled demolition of the legacy financial system, managed, paced and wrapped in pageantry. For those of us like PULP watching the liquidity signals the meaning is clear: they will print until trust breaks and use media narratives to distract the masses as long as possible.

PULP Research Outlook and Forecast

PULP predicts that BTC will hit at least $150K by Q4 2025. Our model combines monetary, flow and cycle factors. Historically, global M2 liquidity expansion leads BTC by 2-3 months, with central banks still re-expanding base money, this overlay suggests a strong second-half rally. Simultaneously, rolling ETF inflows are projected to stay high: even BlackRock's IBIT AUM can double over 2025, exerting steady buy pressure. We also account for the post-halving cycle which occurred in May, so by Q4 2025 we'd be in a typical late-cycle euphoria phase. Taken together, PULP sees a path to $150K by December 2025, barring unforeseen macro shock.

PULP predicts ETH to $6,500. Post-Pectra upgrade fee reduction lowers transaction friction and expands DeFi yield opportunities. Capital rotation towards is likely if base yields elsewhere stay low. We project that sustained protocol demand combined with upgrade-driven growth could lift ETH towards $6.5K by late 2025. This assumes network usage grows and that ETH's share of total crypto market cap increases.

Sector wise, we expect a lot of growth within several sectors as regulatory clarity crystallizes. Before the euphoric altcoin pump, PULP sees many sectors growing as the crypto sphere matures. In 2025, we project DePIN TVL to increase 50% YoY with device growth, enterprise integrations rising and public funding support in UAE and Hong Kong. Looking at the gaming sector, we predict a 60% growth with launches of AAA blockchain titles, Web2-to-Web3 studio partnerships and zk-rollup integrations to reduce fees and friction. In the AI-crypto arena, we project up to 75% growth as OpenAI and companies alike stack adoption and AI tokens beginning to function as bandwidth/payments layer moving forward. Lastly, we see extreme growth of over 100% on utility tokens like XRP, ONDO and SHX with increased usage in FX rails, on-chain treasury tools and decentralized financial infrastructure in high-inflation countries. In a monetary regime where fiat expands to fund deficits, scarce productive digital assets will outperform.

PULP Research Conclusion

We saw in May that the global economy is at an inflection point. Across geographies, institutions are losing faith in sovereign debt, while everyday citizens are grappling with the visible decline of fiat purchasing power. Inflation-adjusted yields are negative. Fiscal discipline is politically impossible. Surveillance and digital ID systems are on the rise, often disguised as innovation. The world is becoming more digital, more controlled and more fragmented. At PULP, we have a free spirit and don't support this transition. But, this is inevitable and we must position ourselves to make money off of this digital reset.

In this complexity lies the opportunity. At PULP Research, we do not chase narrative, we decode them. We believe that the shift from fiat-based reserves to digitally native assets is already underway. We are positioned in hard, scarce, productive crypto assets and believe it is the highest form of risk-managed freedom. We maintain that remaining informed, adaptive and skeptical is a strategic advantage in an era of narrative warfare. As political drama unfolds and institutions reposition, we stay focused on Bitcoin as a base-layer collateral, Ethereum as introductory Web3 infrastructure and select altcoins as the rails and applications of the new economy to come.

Our mission remains clear: to help the sharp and signal-focused thrive in a world of distortion where we are meant to lose. We prepare instead of reacting. We invest instead of speculating. Most of all, we stay ready for the future most still don't see coming.

- PULP Research