Cwallet Crypto Market Weekly Report｜Unearthing Investment Opportunities Amidst a Volatile Crypto Market: The Base Ecosystem's Liquidity Aggregation Effect

Crypto Market Overview: Navigating Volatility

This week, the cryptocurrency market faced a volatile downturn. Bitcoin continued its fluctuating decline from the previous week, while most Altcoins followed a similar path, experiencing fluctuating downward trends. The overall market sentiment index dropped slightly from 30% last week to 28%, remaining in a bearish zone. This shift indicates a cautious sentiment among investors, as market conditions remain uncertain.

Stablecoin Market Dynamics: A Mixed Outlook

The stablecoin market largely continued its upward trajectory from last week, with both USDT and USDC seeing increases:

• USDT’s market cap reached $155.7 billion, marking a 0.32% weekly increase. However, the weekly capital inflow was less than $1 billion for the first time in recent weeks, signaling a slowdown in inflows.
• USDC’s market cap increased to $61.4 billion, showing a 0.33% weekly rise. This marks the end of its recent decline, hinting at a modest recovery.

While USDT’s market cap continued to rise, the incremental increase of $500 million this week is a notable slowdown compared to previous weeks. This suggests a decline in capital inflows, particularly from non-U.S. users. Conversely, USDC’s recovery reflects that U.S.-based investors may be starting to re-enter the market. While the inflow was small at $200 million, this trend warrants careful monitoring.

Market Segmentation: A Flight to Safety

The cryptocurrency market showed clear structural divergence this week: Bitcoin maintained a volatile downward trend, while Altcoins experienced larger declines. This divergence highlights a flight-to-safety trend, where capital is moving towards relatively safer assets like Bitcoin, reaffirming its role as a "safe haven" in the crypto space during uncertain times.

Geopolitical Risks Escalate: Impact on Market Sentiment

• Middle East Conflict Escalates: The ongoing conflict between Israel and Iran continues to intensify, with increasing U.S. military deployments around Iran. This escalation is raising concerns over the potential for direct U.S. involvement, which could further destabilize the market.
• Risk Transmission to Crypto: Heightened geopolitical tensions are influencing risk assets, reducing overall risk appetite. Cryptocurrencies, being high-risk assets, are particularly vulnerable, with less liquid altcoins facing heightened selling pressure.

Monetary Policy Shift: Hawkish Fed Stance Influences Market Dynamics

• Fed’s Hawkish Position: This week’s Federal Open Market Committee (FOMC) meeting held interest rates steady at 4.5%. However, the meeting minutes revealed a subtle shift in policymakers' tone, indicating a reduced expectation of rate cuts in the near future.
• Reduced Rate Cut Expectations: The number of officials not expecting rate cuts increased to seven, and the 2025 rate cut expectation dropped from two to one. This shift has dampened market expectations for looser liquidity.
• Inflation Concerns: The Fed’s lowered growth forecasts and raised inflation projections have intensified stagflation concerns, further contributing to market pessimism.

Policy Tailwinds: Positive Legislative Developments

• GENIUS Act’s Positive Impact: The GENIUS Act passed in the U.S. Senate with overwhelming support, offering a positive policy direction for the development of the cryptocurrency industry in the U.S.
• Stablecoin Growth Projections: U.S. Treasury Secretary Bessent predicts that the stablecoin market could reach $3.7 trillion by 2029, which bolsters long-term confidence in the growth of the crypto ecosystem.
• Limited Impact Amid Other Pressures: While these policy developments are positive, they provide limited relief due to the broader pressures of geopolitical risks and tightening monetary policies.

Investment Strategy: Defensive Approach Amid Growing Risks

• Rising Risk Aversion: As the Middle East geopolitical crisis continues to unfold, global risk aversion is likely to rise, suppressing risk assets further.
• Increased Market Fragility: With multiple risks intertwining, the volatility and fragility of the cryptocurrency market have significantly increased, raising the chances of flash crashes.
• Cautious Investment Strategy: Investors should remain highly cautious, closely monitor geopolitical developments, carefully manage their positions, and prepare for sudden risk events that could cause substantial portfolio damage.

Market Outlook: Navigating Uncertainty

Looking ahead, the cryptocurrency market is expected to face continued challenges. The ongoing escalation of the Middle East conflict, combined with the hawkish stance of the Federal Reserve, will likely weigh heavily on risk assets. While Bitcoin will struggle to balance its role as a safe haven amidst rising volatility, Altcoins may experience greater selling pressure and liquidity risk. The combination of technical support levels being tested, cautious institutional participation, and potential retail investor panic may contribute to heightened volatility. In such a market, investors should adopt a defensive strategy, monitor geopolitical events closely, and focus on risk management.

Next Week's Major Crypto Events

Bullish Pick: AERO – Leveraging Coinbase’s Base Chain DEX Integration for Growth

• AERO’s Positioning: Last weekend, during the 2025 Cryptocurrency Summit, Max Branzburg, VP of Consumer Product Management at Coinbase, announced that Coinbase would integrate the Base chain's decentralized exchange (DEX) into its main app, providing future in-app DEX trading opportunities.

The Impact of Coinbase’s Integration on AERO

• Massive Liquidity Influx: Coinbase’s massive user base, including over 100 million registered users and 8 million active monthly traders, will funnel significant liquidity into Base chain DEXs, specifically benefiting Aerodrome, the largest DEX project within the Base ecosystem.
• Institutional Capital Advantage: With 82.05% of Q1 2024’s trading volume coming from institutional clients, Aerodrome stands to benefit from larger transactions, providing deeper liquidity and reducing slippage.
• Liquidity Aggregation and Competitive Edge: As the largest DEX within Base, Aerodrome accounts for 60% of the ecosystem’s DEX trading volume. The influx of liquidity will strengthen Aerodrome’s market position, increasing its trading depth and operational efficiency.
  

Aerodrome's Economic Model: How it Benefits from Coinbase’s Integration

• Incentive Structure for Revenue Distribution: Aerodrome’s revenue distribution mechanism ensures that token holders benefit directly from platform growth. veAERO holders receive 100% of fees and bribe revenues from their votes, while LPs receive 100% of AERO emissions.
• Staking-Driven Supply Contraction: With increased trading volume, staking AERO tokens will reduce circulating supply, triggering a positive feedback loop that drives the token's price higher.
• Governance and Long-Term Value: veAERO holders control the allocation of AERO emissions, enhancing governance value as liquidity and market activity increase.

On-chain Data: AERO’s Growth Post-Coinbase Announcement

• Aero’s TVL: Following Coinbase's announcement, Aerodrome’s TVL surged by 56%, reaching $1 billion, indicating a positive market response to the integration.
• Trading Volume Surge: Aerodrome’s trading volume saw a significant uptick, surpassing Uniswap, as funds from Coinbase flowed into the platform. This surge in trading volume further strengthened Aerodrome’s position within the Base ecosystem.

Bearish Picks: ALT and REZ

ALT: Token Unlocking Risk and Market Deterioration

• AltLayer’s Struggles: AltLayer faces substantial headwinds, with the Ethereum ecosystem’s weakness and increasing market skepticism towards Layer-2 solutions.
• Token Unlocking Pressures: The scheduled unlock of 195 million ALT tokens may trigger significant selling pressure, exacerbating the project’s price decline.

REZ: Struggling with Fundamentals and Unlocking Pressures

• Renzo's Market Challenges: As the Ethereum ecosystem struggles, Renzo faces a dramatic decrease in its TVL and revenue, further compounded by a large unlocking event scheduled for June 29, potentially increasing the circulating supply and intensifying selling pressure.

A Cautious Investment Approach Amid Rising Geopolitical and Economic Risks

This week’s crypto market saw a structural decline driven by multiple negative factors, including geopolitical risks and tightening monetary policy. While the stablecoin market continues to grow, the decline in USDT capital inflows and the recovery in USDC highlight the ongoing divergence in the market. Investors should focus on defensive strategies, carefully monitoring geopolitical developments, and managing their portfolios amid a volatile market environment.

Next week’s key events, such as Powell’s monetary policy testimony and Core PCE data, will significantly influence market sentiment. It’s a crucial time for investors to adapt their strategies accordingly, focusing on high-quality assets while remaining vigilant to risks from external events.

Cwallet: Your Gateway to a New Era of Crypto Finance

Cwallet is not just a crypto wallet; it's a comprehensive Web2.5 financial platform. We seamlessly integrate security, privacy, and convenience, laying the foundation for a transformative financial landscape. With Cwallet, you can securely hold, send, receive, swap, tip, and earn from over 60 blockchains and 1000+ cryptocurrencies — all within one powerful platform.

We aim to expand the rich applications of crypto. Our intuitive Telegram bot allows for effortless engagement in airdrops and fosters community connections through tipping and group management tools. Additionally, we offer $USDT earnings with a maximum APR of 10% and provide competitive loan services. We also offer the Cozy Card — your passport to global spending. This innovative card enables you to use your digital assets like cash, simplifying transactions worldwide and enhancing convenience through Apple Pay and Google Pay.

Furthermore, we provide additional toolkits, including HR bulk management system, mobile top-ups, gift cards, and more. With over 37 million users, Cwallet invites you to reimagine crypto. Stay cozy and step into the future of finance with us.

Offical Link

Official Site: https://cwallet.com

Twitter: https://twitter.com/CwalletOfficial