We ended our Q1 update on a note of uneasy optimism. The digital asset market had just endured its worst start to a calendar year on record, but the U.S. was finally turning pro-crypto. SEC lawsuits were dropped, the plan for the Strategic Bitcoin Reserve was freshly announced, and bipartisan stablecoin legislation was advancing in both the House and Congress. For the first time in years, the regulatory path ahead looked navigable for market participants. While this did not immediately translate into price gains, the first steps toward long-term alignment with investor needs were finally being taken. In industry terms, the “rails” for institutional adoption were being laid.
The new quarter opened with a moment of historic volatility. On April 3rd, the White House announced a dramatic expansion of its tariff regime, extending punitive duties as high as 30% across dozens of trade partners. The move, termed the “Liberation Day Tariff Plan,” stoked fears of an unraveling of the global trade architecture that had underpinned markets for decades and sent shockwaves through risk assets worldwide. This triggered a violent wave of de-risking, which culminated in the sharpest equity drawdown since the March 2020 pandemic crash: the S&P 500 plunged into correction territory, and the Nasdaq endured double-digit weekly declines as hedge funds scrambled to unwind positions. As had been the pattern in Q1, crypto was swept up in the broader chaos—Bitcoin dove to $74,400, and altcoins shed 20%–40% in what marked one of the most severe synchronized corrections in the last two years. As liquidity evaporated and classic risk-off reflexes kicked in, even fundamentally sound tokens were indiscriminately sold.
But the turmoil did not end with stocks and digital assets. Broader markets convulsed under renewed debt-sustainability fears, as the administration’s promise of tariff-linked tax credits and subsidies threatened to balloon the deficit. The worry also crossed party lines in Washington: tariffs were seen as a drag on growth, but the larger worry was that a massive stimulus package signaled unchecked fiscal overreach. With Treasury issuance forecasts accordingly revised sharply upward, the 10-year yield broke above 5.1%, and volatility spiked back to pandemic highs. In response, investors sold off the dollar and stampeded into gold, driving it to fresh all-time highs day after day; perhaps a quiet signal that confidence in U.S. fiscal governance was slowly eroding.
For Bitcoin, however, a different pattern was beginning to emerge. Despite its initial sell-off early in the month, it began decoupling from equities and moving more in line with gold in late April. This marked the start of a broader dynamic that would define the remainder of the quarter, where Bitcoin was being reconsidered not simply as a speculative asset, but as a sovereign-agnostic store of value akin to gold capable of holding its own in a new market regime defined by fiscal uncertainty.
The final weeks of April brought a measure of much-needed relief. Equity markets staged a sharp rebound, and Bitcoin climbed back to $96,500 by May 1, driven by renewed flows into spot ETFs, which returned to $1–2 billion a week—levels not seen since February. Altcoins followed suit, retracing a significant portion of their losses with average gains of 20% to 40% off the lows. For a brief moment, the market looked aligned: risk was recovering, flows were returning, and the stage seemed set for a sustained risk-on environment.
While markets had clearly found a local bottom, the chaos of April gave way in May to something slower, but no less unsettling. Instead of sharp moves and clear catalysts, investors were met with a landscape defined by mixed signals and shifting narratives. Policy direction seemed to change by the day, political pressure was building, trade deals were perpetually “weeks away,” and inflation data failed to offer a consistent message. Meanwhile, the administration’s stimulus push—in the form of a new tax bill focused on industrial subsidies and direct consumer support—was meant to stabilize sentiment but ended up fueling more uncertainty. Expansionary fiscal policy is typically supportive for risk assets, but growing concerns over the ballooning deficit rattled bond markets, which in turn kept equities on edge. Adding to the unease, Trump’s increasingly vocal push for Fed Chair Powell to lower rates caused rate expectations to whipsaw with each new economic release. By mid-month, traders briefly priced in a June pivot—only to reverse course days later. Ultimately, the Fed held its line. That steadiness helped calm markets and, for a moment, prompted Trump to dial back his pressure campaign.
On a more positive note, crypto found moments of resilience amid the broader uncertainty. The pain of April’s capitulation gave way to a more selective recovery, especially among fundamentally sound tokens. Bitcoin retained its dominant position, supported by a growing narrative around non-sovereign monetary assets and longer-term macro relevance, but more notable was the rebound in high-quality altcoins. Unlike earlier cycles, this rally was now less driven by hype or leverage and more by a gradual reallocation toward assets perceived as credible, liquid, and strategically positioned for the next phase of market maturation.
This trend was most clearly reflected in projects with dedicated teams, proven track records, strong financials, and a clear alignment with market narratives. Two standout examples were Maple Finance and Hyperliquid, which became consensus trades that significantly outperformed the broader market by rallying over 300% and 450% respectively. For Hyperliquid, this momentum was driven by sustained revenue growth and surging trading volumes, while Maple benefitted from a sharp acceleration in institutional lending on its platform during the quarter.
Beneath all of the macro noise, Q2 brought a wave of institutional positioning across crypto infrastructure. That adoption momentum started with the appointment of Paul Atkins as the new SEC Chair in early April. Known for his market-friendly approach, Atkins moved swiftly to replace enforcement-driven oversight with a rules-based framework aimed at restoring industry confidence in regulatory direction.
Regulatory clarity for institutions advanced on multiple fronts this quarter, most notably with the GENIUS Act—passed in the Senate and now under House review—which aims to establish a federal framework for USD-backed stablecoins. The bill introduces a dual licensing model that preserves state-level flexibility while giving institutional players a clear path to issue and adopt stablecoins. Within weeks of the first legislative milestones, both major US banks (Goldman Sachs, Bank of America, Citi) and payment providers (Stripe, Visa, Mastercard) signaled plans to launch or directly integrate stablecoin services, showing just how quickly policy alignment can unlock pipelines long in development.
Perhaps the clearest expression of growing institutional demand and corresponding policy alignment in Q2 came through a surge in appetite for regulated crypto exposure—seen both in new product approvals and the strong investor interest they attracted. In April, Canada approved the first Solana ETF, followed by U.S. approval in early July. Building on that momentum, ETF giants like BlackRock and Fidelity advanced proposals for staking-enabled Ethereum and Solana ETFs, reflecting the growing issuer demand for compliant, yield-bearing crypto vehicles.
At the same time, a new wave of public acquisition vehicles—some following the MicroStrategy model, others newly formed—continued turning heads by raising fresh billions in Q2 via equity and convertibles to accumulate BTC, ETH, SOL, and other major altcoins. For comparison, treasury vehicles in Q2 even outpaced ETFs in BTC acquisitions, purchasing 131,000 BTC ahead of 111,000 bought through the latter type. Many of these vehicles also traded at a significant premium to NAV, and it was not uncommon to see them rally over 150% during the quarter.
This institutional momentum wasn’t limited to the private sector. At the state level, previously signaled interest in holding Bitcoin as a treasury asset began to translate into concrete action. Arizona and New Hampshire passed earlier in the quarter budget-neutral Bitcoin reserve bills akin to the nation-wide Strategic Bitcoin Reserve, while Texas, in June, became the first to formally allocate taxpayer funds toward digital asset stockpiling.
Meanwhile, public crypto equities delivered some of the quarter’s most dramatic market moves. With many institutional mandates still restricting direct exposure to “spot” crypto, listed infrastructure names became favored proxies by offering directional access without the regulatory drag. The stablecoin issuer Circle, which IPO’d at a modest $1.1 billion valuation on June 6, surged over 300% (at its highest wick) in its first three weeks of trading as hedge funds rushed into only the second crypto IPO to date. Likely this surge can be attributed to the scarcity of investable crypto-related names, strong regulatory tailwinds, and an alignment with the broader stablecoin narrative, which immediately made it a market favorite among high-growth stocks. By the same token, Coinbase and Robinhood as the only incumbent crypto equities have also rallied sharply in recent months. Robinhood’s rally in particular has been fueled by a bold pivot toward tokenized finance, as the company introduced on-chain stock tokens for EU investors, announced plans for its own Layer 2 blockchain, and positioned itself as a gateway for real-world assets on crypto rails.
Note: Lines on the Chart reflect daily closing prices, indexed to the start of Q2 2025. As a result, the chart may understate peak gains that occurred intraday and are referenced in the text.
While Q2 may have lacked headline price gains, it was structurally one of the strongest quarters crypto has seen to date.
As the macro picture finally began to settle toward the end of May with the announcement of the US-China trade deal, markets had another shock waiting for them around the corner. A sudden military escalation between Israel and Iran shocked global markets in early June, fueling fears of a broader regional conflict. Oil prices surged, and traders scrambled to reprice inflation expectations just as signs of fragility in the US economy were simultaneously beginning to re-emerge. As has been the story so far this year, markets reverted to their headline-driven nature, treasury yields ticked higher, and equities stumbled. But, this time around, one key shift stood out: Bitcoin held its ground.
As the crisis unfolded, Bitcoin remained steady in the $101-110k range, showing none of the volatility that had plagued its earlier cycles. In contrast, altcoins front-ran equity sell-offs day after day and posted sizable losses, continuing their high-beta relationship to risk. For institutional observers, Bitcoin’s relative calm marked a key turning point; not only had it held up during fiscal chaos in April and May, but it was now weathering geopolitical shocks with long-awaited maturity.
And this is not just anecdotal. By mid-June, Bitcoin’s 30-day rolling volatility dropped below that of gold for the first time on record. These relationships can always reverse, but the signal was clear. Bitcoin’s store-of-value narrative is no longer theoretical; it is being observed and, for the first time, actively priced in.
Overall, Q2 did not offer clarity so much as it demanded recalibration. Tariffs, fiscal expansion, geopolitical shocks, and institutional friction all tested the boundaries of how far markets could stretch without breaking. And, through it all, Bitcoin began to act less like a fringe asset and more like a durable macro bet. In a world increasingly defined by noise, that kind of clarity has great value that should not be understated.
Despite a rocky start to June, the quarter ended on a more hopeful note. Both the ceasefire in the Middle East and Fed Chair Powell’s recent signal of flexibility on policy––which boosted the odds of a September rate cut––have pushed equities to new all-time highs week after week. Bitcoin, too, has recently broken to fresh all-time highs above $118,000, reinforcing the sense that momentum is returning across risk assets. While crypto has already seen some relief, the setup increasingly points to the next phase of the market cycle being still ahead of us. As mentioned, a first US-listed Solana ETF has recently been announced, the GENIUS stablecoin act is expected in late July, and institutional appetite for DeFi continues to accelerate. At the same time, a growing wave of new treasury vehicles and ETF structures is putting a sustained, structural bid for the assets we hold.
The next leg of the market cycle will be about where capital wants to go, not just where it can allocate. And, if Circle’s post-IPO performance is any indication, the demand for credible crypto exposure from traditional finance is not just real––it is only getting started.