This week's cryptocurrency market is aptly described as 'fire and ice.' On one hand, there's the 'panic sell-off' across the network triggered by the Federal Reserve's leadership change, with Bitcoin leading the plunge; on the other hand, there are multiple positive developments like regulatory breakthroughs, institutional investments, and endorsements from industry leaders. The short-term price fluctuations can be unsettling, but the medium to long-term trend is actually quite clear—institutions are quietly positioning themselves, and the 'normalization' of the crypto market is happening faster than we imagined.
Core Shock Source: The Federal Reserve Changes Leadership, Kevin Walsh's Nomination Triggers 'Fed Panic'
This week's biggest black swan is undoubtedly President Trump officially nominating Kevin Warsh to replace Powell, whose term expires this May, as the next chair of the Federal Reserve. This nomination is not just a simple personnel change; it directly disrupts the rhythm of the entire crypto market.
Some may not be familiar with Warsh, so let me briefly outline his background: he graduated from Stanford, was an assistant to the legendary economist Friedman, and holds a Harvard law degree. His career spans Wall Street, the White House, and the Federal Reserve, with connections across politics, business, and academia—his father-in-law is an heir to Estée Lauder, a friend of Trump, and even the legendary investor Druckenmiller is his partner, having ventured into Bitcoin investment early on. More importantly, he was the youngest governor in the history of the Federal Reserve, publicly opposing quantitative easing in 2010, making him a genuine "hawkish" figure.
The core reason for the market's panic is the two words "hawkish." Everyone is clear that the hawkish Federal Reserve prioritizes controlling inflation and is highly likely to tighten market liquidity, shrink the Fed's balance sheet, and even actively "cool down" asset price bubbles. Although Warsh has previously compared Bitcoin to "new gold" and is not hostile towards cryptocurrencies, under the premise of "tightening liquidity," any risk asset will be sold off—Bitcoin is the first to bear the brunt, dropping to the range of $76,000-$82,000, close to a 10-month low, with the maximum drop in 24 hours reaching 8.32%. Other tokens like Ethereum also fell sharply, which is what the market refers to as "Fed panic."
To add, Warsh's rise can also be attributed to his "going with the flow"—he transitioned from being a proponent of free trade to a supporter of Trump's tariff policies, criticizing Powell for being too slow to lower interest rates, which is also one of the key reasons he received the nomination. However, whether he can ultimately assume office still requires approval from the US Senate, and there remains uncertainty.
Regulatory breakthrough: US crypto legislation takes a big step forward, Bitcoin finally gets an "identity".
Amid market panic, a milestone good news came from US regulation— the Senate Agriculture Committee, with a party vote result of 12 Republican in favor and 11 Democratic against, advanced the Digital Commodity Intermediaries Act.
This sentence may seem convoluted, but the core is simple: it clarifies the "identity" of cryptocurrencies like Bitcoin—they are not securities, but rather "digital commodities"; at the same time, the primary regulatory authority over the cryptocurrency spot market has been handed to the CFTC (Commodity Futures Trading Commission), rather than the SEC (Securities and Exchange Commission), which has always had a tough stance on the crypto market.
This is undoubtedly a long-term positive for the crypto market. It’s important to note that the biggest pain point in the crypto market before was "regulatory uncertainty"—not knowing who is in charge, what can be done and what cannot be done, causing many institutions to hesitate to enter the market. Now that the bill clarifies the regulatory subjects and asset attributes, it is equivalent to giving the market a "security pill," significantly reducing the uncertainty brought by regulation.
However, there's no need to be overly eager to cheer: this is only the committee-level passage in the Senate, and it hasn't reached a full chamber vote yet. To ultimately become law, it must gain bipartisan support, and currently, there are still disputes over party differences and some details, limiting its short-term impact on market sentiment. Everyone remains in a "cautiously optimistic" state.
Frequent institutional actions: Solana heavily backed, euro stablecoin about to explode.
In addition to regulation, this week's institutional "real money" layout better illustrates the long-term potential of the cryptocurrency market, with three key events that are all worth watching.
1. Solana ecosystem erupts: Jupiter secures $35 million in investment, Wall Street goes long.
This week, Jupiter, the top DEX aggregator in the Solana ecosystem, announced it secured a $35 million strategic investment from ParaFi Capital—this marks the first time Jupiter has accepted external financing since its inception.
This investment has two highlights that are particularly worth noting: first, all investment funds are settled in JupUSD, a stablecoin issued by Jupiter itself; second, the investment has a long lock-up period. These two details are enough to illustrate that top institutions on Wall Street are no longer engaging in "short-term speculation," but rather plan to make long-term heavy investments in the native DeFi (Decentralized Finance) system of the Solana ecosystem.
In addition, Jupiter has recently integrated features like the Polymarket prediction market, moving beyond just being a "currency exchange tool" and gradually aligning with the concept of a "super application," further strengthening Solana's position as a "super application chain." Driven by this news, Jupiter's native token JUP rose more than 10% in the short term, bringing some vitality to the sluggish market. It is reported that Jupiter's trading volume over the past year has exceeded $1 trillion, having already achieved self-sufficiency, and this external investment is more for further expanding its layout.
2. Trillion-euro stablecoins on the way: traditional banks become the main players.
S&P Global Ratings this week released a major report, providing an astonishing prediction: by 2030, the market size of euro stablecoins could reach 1.1 trillion euros (approximately $1.3 trillion) in the most optimistic scenario—considering that by the end of 2025, the size of euro stablecoins is only 650 million euros, this means a growth of about 1,600 times in just five years!
Even in the most conservative baseline scenario, the size could reach 570 billion euros, accounting for 2.2% of overnight deposits in the eurozone banks. The core reasons for such astonishing growth expectations are twofold: first, the implementation of the European MiCA regulations provides a clear regulatory framework that clears obstacles for the development of stablecoins; second, European banks are collectively ramping up efforts to accelerate the "on-chaining" of traditional assets, with reportedly 11 European banks planning to jointly issue euro stablecoins by the end of 2026.
It is important to note a key point: the main players in the future euro stablecoin market will not be pure crypto projects but traditional banks—this also means that stablecoins will gradually integrate into the traditional financial system, becoming an important bridge connecting the crypto market and traditional finance, further promoting the institutionalization of the crypto market.
3. Canada clears obstacles: institutional funds can enter without "worries".
Not just the US and Europe, Canada is also ramping up efforts in crypto regulation—Canada's Investment Regulatory Organization (similar to IIROC or OSC) this week released a new framework for digital asset custody, with the core requirements being "asset segregation," "strict risk control," and "customer protection."
This sentence means: if institutions want to hold and custody digital assets, they must separate clients' assets from their own assets and establish a strict risk control system to protect clients' asset security. This may seem like "increased regulation," but in fact, it is clearing the last barrier for institutional funds to enter—the reason large institutions like pension funds and sovereign wealth funds were hesitant to enter is due to concerns about asset security and regulatory risks. Now that the regulatory framework is complete, the willingness of these "large funds" to enter will greatly increase, which is also an important signal of the global crypto market's "institutionalization."
Big shots endorse: V神 donates $45 million, Ethereum ecosystem gains further backing.
In addition to institutions, core figures in the crypto circle are also expressing confidence—Ethereum co-founder Vitalik Buterin (commonly known as "V神") withdrew about 16,384 ETH from his personal address this week, valued at around $45 million.
This money is not for speculative trading but is used to fund various open-source projects, including open-source security, privacy technologies, open-source hardware, verifiable software, etc., covering not only blockchain but also areas like encrypted communication and biotechnology.
The context behind this is that the Ethereum Foundation has now entered a "moderate tightening period"—core development work continues, but overall spending has been reduced, and many projects needing financial support are facing gaps. V神 personally stepping in is, on one hand, to support the development of these key areas, and on the other hand, emphasizes the core spirit of "decentralization," consolidating the long-term security of the Ethereum ecosystem. This is undoubtedly a strong endorsement for the entire Ethereum ecosystem and allows the market to see the confidence in Ethereum's long-term development.
Giant predictions: all assets will be "on-chain" in the future, and wallets will become core tools.
Another noteworthy viewpoint this week comes from traditional asset management giant Franklin Templeton—its head of digital assets, Sandy Kaul, publicly stated that the asset management industry is about to experience a "paradigm shift."
In simple terms, her prediction is: in the future, all traditional financial assets such as stocks, bonds, and funds will be "tokenized," no longer requiring brokers or traditional custodians, but directly stored in users' own digital wallets in the form of native tokens, which is referred to as "wallet-native."
She even likened this transformation to the "next ETF revolution," emphasizing that in the future, "on-chain" will become the "universal liquidity layer" for all assets—meaning that both crypto assets and traditional assets will circulate and trade on-chain, breaking the current barriers. This is not just talk; it reflects the long-term optimism of traditional asset management giants towards RWA (Real-World Asset Tokenization) + wallet direct connection models, indicating that the integration of crypto technology and traditional finance is an irreversible trend.
Weekly summary: Short-term panic does not change long-term positives, institutional layout is the core signal.
To sum up this week's situation in simple terms: this week is a "news-intensive period" for the crypto market, with signals from regulators, institutions, and industry bigwigs coming together—leadership change at the Federal Reserve has caused short-term panic, leading to sharp price fluctuations; but at the same time, the US regulatory breakthrough, the imminent explosion of the euro stablecoin, Canada clearing barriers for institutional entry, Wall Street heavily backing Solana, and Vitalik endorsing Ethereum, with traditional asset management giants optimistic about asset tokenization, all represent significant long-term positives.
The current state of the market is that "short-term panic overshadows long-term positives": people are worried about the Federal Reserve tightening liquidity, leading to panic selling, which results in the fear index being at an "extreme fear" level. In the short term, there is no clear narrative direction, and price fluctuations are quite normal.
But if you take a longer view, you can see that most key events this week are pushing the crypto market towards "normalization and institutionalization"—regulation clarifying identities, institutions entering with real money, and traditional finance actively integrating. These are all signs of the crypto market maturing. The short-term volatility is more like a "washout" before institutions enter, and in the medium to long term, the development trend of the crypto market is becoming increasingly clear.
Disclaimer: The content of this article is for reference only and does not constitute any investment advice. Investors should rationally view cryptocurrency investments based on their own risk tolerance and investment goals, and not blindly follow trends.