New Opportunities for Crypto Assets under the Restructuring of Global Trade Rules

Recently, there have been signs of easing in US-China economic and trade relations, which have driven up the US stock market and the Crypto Assets market. However, the reconstruction of global trade rules still faces many uncertainties, and the decentralization and cross-sovereign characteristics of Crypto Assets are increasingly favored by investors.

The economic data from the U.S. in May is mixed. The non-farm employment growth in April exceeded expectations, indicating that the labor market remains robust. The U.S. and China reached an agreement on a "tariff suspension period," alleviating concerns about a break in the global supply chain. The consumer confidence index in May rebounded significantly, marking the largest monthly increase in four years.

However, the U.S. Treasury market continues to be turbulent. The yield on 30-year U.S. Treasuries has surged to its highest level in nearly 20 years. Concerns over the U.S. debt ceiling have arisen, with predictions indicating that the U.S. debt-to-GDP ratio could soar from the current approximate 98% to 125%. The Federal Reserve maintains a pause on interest rate cuts, believing that inflation may be more persistent than expected.

Overall, the U.S. economy is in a "stable yet risky" phase. Short-term growth resilience supports the market, but the backdrop of fiscal and monetary policy may limit its upside potential. There is still uncertainty in U.S. policy regarding the balance between stimulating short-term growth and maintaining long-term credit.

Against this backdrop, the US stock market and the crypto assets market rebounded rapidly. The S&P 500 and Nasdaq indices recorded their strongest May performance in decades. Tech giants emerged as the biggest beneficiaries, but the market also exhibited characteristics of "high volatility and high differentiation."

Bitcoin, as a bellwether for digital assets, performed impressively in May. It rose from $95,000 at the beginning of the month to $105,000 by the end, achieving a monthly increase of 12%. This resonance effect with the U.S. stock market reflects investors repositioning their assets amid policy uncertainty.

On the financial front, Bitcoin ETFs have attracted a large influx of funds, while gold funds have experienced capital outflows. This indicates that some investors are turning to Bitcoin as a new store of value and hedging tool. Mainstream financial institutions are also beginning to embrace Bitcoin, with JPMorgan announcing that it allows clients to invest in Bitcoin.

In terms of regulation, the new chairman of the U.S. Securities and Exchange Commission has proposed the goal of creating a "global Crypto Assets capital" and plans to introduce a series of reform measures. The U.S. and Hong Kong have successively promoted legislation on stablecoin regulation to provide institutional support for the development of the Crypto Assets market.

In the future, the volatility of traditional financial markets may become a driving force for the rise of Crypto Assets at certain stages. Concerns over rising U.S. Treasury yields may lead to a flow of safe-haven funds into the crypto market. In the long run, the deterioration of the U.S. fiscal situation may enhance the safe-haven appeal of crypto assets.

The performance of the Crypto Assets market in May reflects that Bitcoin is becoming a new choice for capital to hedge risks against the backdrop of increasing global economic uncertainty. As the regulatory environment gradually becomes clearer, this trend may further accelerate. Despite still facing many challenges, Bitcoin's "digital gold" positioning has gradually been accepted by the market.