Macroeconomic Review and Market Analysis

Analysis of Trump's Policy Context

1. Inflation Reduction Path

• Promote peace talks between Russia and Ukraine to release Russian oil and gas resources and lower global energy prices.
• The situation in the Middle East may trigger new conflicts, temporarily driving up oil prices but controlling them through diplomatic means.
• Increasing import tariffs may lead to a mild economic recession in the short term, suppressing inflation.
• Implement a tariff pressure strategy against China, engage in negotiations or impose economic blockade.

2. Interest Rate Path

• Pressure the Federal Reserve to cut interest rates and expand the balance sheet to stimulate global liquidity.
• Promote legislation related to digital currencies, accelerate their development, and weaken the monetary control of the Federal Reserve.

3. Stimulating Economic Pathways

• Promote the long-term implementation of tax reduction policies to increase disposable income for enterprises and individuals.
• Implement differential tariffs on manufacturing to protect domestic industries
• Seek large-scale investment through visits to Middle Eastern countries.
• Expand oil and natural gas extraction, increase energy export revenue
• Explore the expansion of the economic territory, including considering the acquisition of surrounding areas.

4. Path of Political Familism

• Accumulate family wealth through digital currency policies
• Strengthen the loyal team to ensure policy continuity

Logical Summary

The core of Trump's policy is economic stimulus, aiming to reduce inflation through energy policies and tariff adjustments, intervening with the Federal Reserve and promoting digital currencies to lower interest rates, while stimulating economic growth through attracting investments and energy development. The overall strategy is quite aggressive in the short term, while its long-term effects depend on diplomacy and policy implementation.

Neutral Interest Rate

The market expects interest rate cuts to begin in September 2025, with a possibility of two cuts throughout the year down to 4.00%, and the neutral interest rate may rise to 3.50%. Currently, there is a game of negotiation between the Federal Reserve and the government regarding an early rate cut. The effects of tariff policies are gradually becoming evident, while the Federal Reserve has recently continued to reduce its holdings of U.S. Treasuries to tighten liquidity, leading to adjustments in global liquidity indicators.

Key Focus Items for Next Week

event

• Multiple central bank officials will give speeches.
• Pay attention to the policy statements of central banks in various countries.

data

• US Non-Farm Payroll Data
• PMI data from major economies such as China, Eurozone, and Japan
• US ISM Manufacturing Index
• Eurozone CPI preliminary value

On-Chain Data Analysis

1. Stablecoin capital flow

This week, the market trading volume has significantly shrunk, decreasing by 76.4% compared to the previous period. The daily average issuance is only 78 million, which is in a low liquidity state, possibly indicating a lack of direction in the market, a wait-and-see approach from large holders, or a lack of willingness for on-chain funds to enter.

2. ETF fund flow

This week, ETF inflows decreased from 2.8 billion to 670 million, a reduction of 76%, nearly dropping to previous low levels. The decline in ETF popularity has led to a correction in Bitcoin prices, indicating that current prices are highly dependent on ETF capital.

3. Over-the-Counter Premium/Discount

In late May, the OTC premium for USDT and USDC remained around 100.0%, with minimal fluctuations, reflecting a clear sentiment of caution among investors and a slowdown in liquidity. Overall, it is at a "zero premium" or "slight discount edge," indicating insufficient OTC buying interest.

4. Exchange Balance

The exchange balance proportion of Bitcoin continues to decline to 15.046%, reaching a nearly one-year low, with on-chain selling pressure easing. The exchange balance proportion of Ethereum has increased from 13.52% to 15.83%, indicating some selling activity.

5. Distribution of Holding Addresses

The number of holding addresses in the range of 1K-10K has seen a short-term decline, but it has mainly been absorbed by addresses in the range of 100-1K. There are short-term signs of bearishness, but the market structure has not changed significantly in the medium to long term.

Market Outlook

Based on various data, the market may continue to adjust next week, especially after Ethereum's recent surge. The overall market lacks the impetus for new capital to enter, and the sentiment of wait-and-see is strong, leading to an increased risk of short-term adjustments.