Author: JiaYi

I firmly believe that this round of the crypto cycle is driven by U.S. government policies.

Just last week, Trump signed an executive order regarding 401(k) retirement investments, allowing a portion of retirement funds to be invested in private equity, real estate, and even digital assets. Looking back a few weeks, the GENIUS Act was officially passed, paving the way for stablecoin regulation; this month, the SEC also changed its stance, boldly declaring its intention to embrace "Crypto Everything." From stablecoins to DeFi, from on-chain identity to tokenized assets, almost every aspect is being reintegrated into the U.S. regulatory framework.

This is not just minor adjustments but a reorientation of the capital structure. The U.S. is doing one thing: integrating Crypto into the dollar system as the next phase of financial growth.

Today, let's discuss what the U.S. government is aiming to do, and what we, as crypto enthusiasts, should focus on to maximize our benefits.

What is the U.S. government planning?

The direction of this policy is neither "liberalizing trading" nor "allowing speculation," but rather a systemic reconstruction: systematically integrating crypto assets into the U.S.-led financial structure using a regulatory and financial framework dominated by the U.S. This may sound abstract, but the recent key actions have made the context very clear.

A critical step is the passage of the GENIUS Act, which marks the first time in U.S. history that a federal law has been established for "payment stablecoins." The U.S. government has defined the model for "compliant dollar stablecoins" and opened the doors of the financial system for them. This means that stablecoins are no longer gray patches on the blockchain but are financial instruments that can be incorporated into the monetary policy framework. With government bonds backing stablecoins, users can use them for cross-border payments, banks can use them for liquidity management, and even companies can use them for accounting. This is a true institutional authorization.

At the same time, the SEC has quietly completed its shift in attitude. They launched "Project Crypto," not to expel the industry but to "regulate" it within the existing legal framework. They are now willing to acknowledge: not all tokens are securities and are preparing to introduce a unified standard. They are also advancing a significant initiative: bringing on-chain trading platforms, stablecoins, DeFi, and RWA issuance into the registration framework. The core of this Crypto Everything plan consists of three things: 1. unified regulatory standards, 2. capturing compliant funds, 3. providing a "controllable role" for the on-chain world. This also means that in the future, you may see: legally licensed DeFi protocols, publicly funded RWA issuance platforms, and exchange wallet combinations that connect to TradFi.

Thus, what the U.S. government truly desires is not soaring coin prices but to make this on-chain system a productive tool it can control. To allow dollars to circulate on-chain, securities to be issued on-chain, and American-style finance to reconstruct a new global order. This is also why I have always said: the main theme of this cycle is not the self-evolution of Crypto but the "digital asset absorption plan" personally designed by the U.S. federal government.

Policy Implementation, Market Response

From the passage of the GENIUS Act to the signing of the 401(k) executive order today, BTC once surged to $123,000, and ETH saw a monthly increase of 54%, nearing $4,000.

Looking at the macro level, in July, U.S. crypto spot ETFs attracted a total of $12.8 billion, setting a new historical record. Among them, Bitcoin-related products accounted for nearly half, about $6 billion; ETH ETFs also performed strongly, with a single-month inflow of $5.4 billion. Meanwhile, BlackRock's Bitcoin trust IBIT has grown to $86 billion in assets under management, even surpassing some S&P 500 component ETFs.

Traditional financial institutions are also madly "taking over on-chain." BlackRock's on-chain treasury fund BUIDL has seen its management scale rise to $2.9 billion, and mainstream exchanges like Crypto.com and Deribit have started accepting it as collateral, indicating it can now function as liquidity within the crypto financial system. JPMorgan has also upgraded its payment chain Onyx to a brand new on-chain settlement system Kinexys, collaborating with clearing giant Marex to conduct the first "24/7 real-time on-chain clearing." In simple terms, they have completely integrated what used to take days to settle in the traditional financial system into the on-chain world.

Institutions are not "exploring"; they are genuinely treating on-chain as a serious business. You can continue to watch KOL statements, or you can see where the money is flowing. This market trend is not driven by narratives but by policies setting the tone, leading funds to actively seek liquidity. Capital has begun to bet on "those that can accommodate policies."

Which sectors will first benefit from policy dividends?

So, which sectors will receive the benefits of this policy? Let's analyze it slowly.

This opportunity is not evenly distributed; it will concentrate in a few directions. Here’s my personal judgment: stablecoins, on-chain financial infrastructure, and ZK sectors driven by compliance will be the first to reap the benefits, while other sectors will have varying rhythms.

The Direct Beneficiaries of Policy Dividends: Stablecoins

Stablecoins are the most direct winners in this round of U.S. regulatory benefits. The GENIUS Act essentially issued a passport for dollar stablecoins: legal issuance, proper identification, and finally able to walk into the main thoroughfare of the U.S. financial system. Thus, we also see that two sons of the Trump family entered the market early, launching USD1 through WLFI to secure a first-mover advantage as the era of compliance begins.

On the day the policy was implemented, JPMorgan officially announced the pilot issuance of JPMD deposit tokens on Coinbase's Base chain (essentially a bank deposit stablecoin with partial reserves). Coinbase's own stablecoin USDC also rapidly grew under the favorable compliance environment, adding $800 million in circulation in the past week and launching a crypto credit card backed by American Express, partnering with Shopify and Stripe to directly integrate USDC payments into e-commerce checkouts.

The explosion in scale is just the appetizer. The real change is: the expansion of usage.

Visa, Mastercard, and other settlement networks have already integrated stablecoins into their global networks, using them for high-frequency payments, bypassing the slow and expensive fees of traditional card networks. Once compliant stablecoins enter cross-border remittances, e-commerce, and in-game transactions, the efficiency gains are immediate. At the same time, the entry of "regular troops" also means a steep increase in barriers. Regulations require issuers to be subsidiaries of regulated financial institutions, licensed trust companies, etc., and to undergo safety assessments by financial regulatory committees.

This almost directly blocks small innovators from entering, and the stablecoin market will move more quickly toward oligopoly, with the confrontation between Circle, Coinbase, and traditional banking factions becoming increasingly evident. Additionally, with regulations prohibiting interest payments to holders, the positioning of stablecoins will return to payment and value storage itself, eliminating the illusion of algorithmic coins with extremely high annualized returns.

So how can ordinary users participate in this wave of dividends?

There are indeed pathways. For example, multiple compliant platforms are already offering reasonable yields on USDC, providing safer paths with strong liquidity, which are more suitable for conservative funds: Coinbase offers about 4.1% APY for USDC holdings. Binance has recently launched a flexible deposit product for USDC. In this promotional period, each account can enjoy up to 12% APR on a maximum of 100,000 USDC, with funds available for withdrawal at any time.

From an investment perspective, these yields are not low, and they offer stability, safety, and liquidity, making them far more practical than leaving funds in exchanges without any returns. Especially for cross-border users, holding stablecoins not only earns interest but also avoids exchange rate fluctuations and the complexities of traditional channels.

In summary, my judgment is that this round of policies clears the runway for stablecoins that are compliant and stable. In the short term, dollar stablecoins and their payment applications will welcome capital inflows; in the long term, they will become the ballast of on-chain finance and the core bridge for the digitization of fiat currencies.

Stablecoins as an Entry Point, Accelerating Development of On-Chain Economic Infrastructure

The clarity of U.S. regulation is actually paving the way for a localized financial economy. The so-called "localization" fundamentally refers to compliant public chains and protocols carrying more business from U.S. institutions, with traditional finance becoming more proactive in integrating these on-chain foundations, treating them as new infrastructure, which is the second sector I value.

A straightforward example is Base, which, leveraging Coinbase's compliance advantages and seamless exchange integration, has successfully accommodated an increasing number of U.S. institutions and enterprises' on-chain businesses, connecting multiple sectors such as payments, applications, and asset circulation. In this trend, I am optimistic about the ecological extension of the Base system. Besides promoting tokenized securities, it is also filling in applications with partners, such as collaborating with Stripe to enable on-chain stablecoin payments, making Base the hub of payment innovation; it also provides underlying settlement facilities for PayPal, JPMorgan, and others.

In the future, U.S. payment companies, banks, and brokerages will clearly prefer to use such a local, communicable network that can address issues promptly, rather than an overseas anonymous chain. Localization is essentially a compliance moat.

Base itself does not issue tokens; its traffic, value, and imagination are all realized through the unique bloodline channel B3. B3 is built on Base, and its founding team comes from Coinbase. B3 inherits the compliance system and user economic entry advantages of Base, which means that whether it’s dollar stablecoin payments, institutional settlements, or compliant narratives entering the North American market, B3 has an unparalleled first-mover advantage. This type of on-chain financial infrastructure, after closing the loop on scenario-based and personalized applications, will have a tremendous appeal to high-quality assets that want to go on-chain and operate efficiently in the long term. When Base experiences a large-scale application explosion, B3 will become the first choice for these applications to land and scale, truly serving as the super application layer and entry point for the on-chain economy.

Additionally, I have a good understanding of the B3 team; they operate very steadily, continuously refining their products while also expanding externally, and I’ll leave a hint here. It can be confirmed that after the announcement of significant collaborations, B3's position in the industry will become clearer.

Looking ahead, I don’t believe this is just an isolated case. As regulations continue to improve, more traditional giants will follow the path of JPMorgan and Coinbase, and we may see many large banks issuing on-chain bonds, insurance companies managing policies on-chain, and tech giants issuing corporate stablecoins for internal settlements… After all, every major client is a stable cash flow source for on-chain infrastructure.

Of course, this will also raise the requirements: performance must withstand massive transactions, privacy must protect corporate data, and compliance must integrate auditing and risk control into the system. In simple terms, this wave of U.S. policy is pushing on-chain infrastructure from the past of "international wild growth" towards "localized meticulous cultivation." In this upgrade, local compliant chains and modular innovative networks will be the biggest beneficiaries.

ZK: New Infrastructure for Privacy Under Policy Vision

Which sectors that were once declared "dead" might see their second chance? For example, ZK.

On August 13, the surge of OKB ignited Twitter and various communities. The price soared from 46 to nearly 120, almost tripling. This price increase was not only due to OKX's one-time destruction of 65.25 million historical repurchased and reserved OKB, eliminating some past potential selling pressure. The X Layer upgrade also added structural changes on both the supply and demand sides, making OKB the only Gas Token for X Layer, directing traffic across wallets, exchanges, and payment scenarios.

Supply contraction + concentrated demand made the market suddenly realize that the scarcity and utility of OKB were simultaneously amplified, leading to a short-term spike driven by capital rush and emotional resonance. Another trading variable is compliance expectations. The market has been closely watching the dynamics of "OKX preparing to go public in the U.S.," thus holding imaginative space for its entry into the U.S. market, although whether it can materialize still depends on U.S. regulatory policies.

My attitude towards this sector is clear: no FOMO, just observation. ZK may very well find its revival opportunity in the era of compliance, or it may just be a brief resurgence. Regardless, its movements are worth keeping an eye on.

The latest U.S. digital asset report has clearly stated that individuals should be allowed to conduct private transactions on public blockchains and encourages the use of self-custody and privacy-enhancing technologies to reduce the risk of on-chain data leakage. The White House's 2025 digital asset policy report also mentions that ZK is a key path to balancing privacy and compliance. This shift in attitude is interesting; previously, privacy coins and mixers were on the regulatory "blacklist," but now decision-makers acknowledge: to attract more traditional funds onto the chain, the "on-chain privacy" shortcoming must be addressed, and ZK is a ready-made solution.

On the enterprise application side, Google Wallet has launched a ZK age verification based on Succinct Labs: you can prove you are over 18 without exposing any ID details. It sounds very Web2, compliant with KYC while protecting privacy, but this time it runs on-chain.

The underlying Succinct has thus been pushed to the forefront, and after the token $PROVE was launched, its performance has been relatively good compared to other recent projects, recently outperforming many altcoins. This case illustrates one thing: when top tech companies and real business scenarios start using ZK, market patience will return.

I understand the revival of ZK not just as an emotional rebound, but as an inevitable demand in the era of compliance. Once assets and transactions move on-chain, companies cannot accept all business details being public to competitors, and individuals do not want their financial trajectories to become transparent flows.

Regulatory requirements are also very clear. What needs to be audited must be auditable, and what needs to be traced must be traceable. This seemingly contradictory demand is precisely the stage for ZK: "prove legality first, then hide details." For example, in interbank large-value settlements, ZK can verify that transactions comply with anti-money laundering regulations without disclosing who the customers are. Such scenarios will become increasingly common in the future: identity verification, credit scoring… all of which could be reshaped by ZK. Many high-quality ZK projects have not yet issued tokens, but the policy window may prompt them to accelerate their implementation.

In the previous cycle, top ZK teams continuously secured funding, but many secondary performances were "from kings to the fallen," driving the heat of the ZK sector to a freezing point. In this round, is there an opportunity to reverse the impression of "ZK secondary must perish"?

I think we can focus on two types of targets: one type is teams that have not yet issued tokens but have solid technical reserves and implementation capabilities; the other type is projects that have already issued tokens but have a healthy chip structure and are genuinely advancing their business. For me, this sector is worth observing in the short term, even though it is not yet at a level where one can blindly invest heavily, but it does not rule out the emergence of a few winners that ride the wave.

Policy Determination, New Pattern Set Sail

As a long-term investor looking at sectors, I am very clear: once the regulatory boot drops, the structural opportunities in the market begin to rearrange. The clarity of this round of U.S. policies is genuinely changing the flow of funds and the order of the industry.

In the short term, the influx of funds and bullish sentiment brought by compliance benefits have already allowed some sectors to outperform the market, with stablecoin issuers and market capitalization tokenization providing the market with very intuitive feedback in terms of price and trading volume. This is just the first wave of capital testing. More importantly, is the long-term reshaping of the landscape. When the rules are clear and the thresholds are defined, only truly valuable sectors will solidify. Conversely, those that detach from real demand and rely solely on speculative games will find increasingly less room for survival in a strongly regulated environment, and industry resources will flow towards more meaningful directions.

I personally firmly believe: the real opportunity lies in adapting to structural changes: in the short term, observe policies and capital flows to find points of entry that align with the trend; in the long term, identify which sectors can resonate with future financial and technological developments. I see this round as the "fourth phase moment of the internet" for the crypto industry. Those interested can check out my previous article on the development path of the web3 industry: back then, the internet had rule establishment and technological transformation, with short-term growing pains, but ultimately welcomed a larger and healthier ecosystem.

The current crypto industry is bidding farewell to the chaotic growth of the barbaric era and moving towards a mature phase with rules to follow. Those who can seize the policy dividends during this window period will have a better chance of securing their position in the next phase of the landscape.

New pathways have been opened, and those who sail with the wind will reach the future faster.

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