KCV Weekly Report 0519-0525
2025/05/27 01:22:41
KuCoin Ventures Weekly Report: Bitcoin Hits Record $110K, Stablecoin Legislation & Treasury Debates Intensify, Trump Family-Linked Stablecoin Fuels Secondary Market Hype
1. Weekly Market Highlights
Believe Reborn: A Comeback in an Overcrowded On-Chain Token Launch Landscape
Bitcoin surpassed $110,000 on May 22nd, setting a new all-time high. Beyond the buzz around "Bitcoin Pizza Day," discussions surrounding stablecoin legislation are believed to be one of the factors driving this Bitcoin rally.
Just two days before this latest Bitcoin record, on May 20th, FOX Business reporter Eleanor Terrett stated on her X account that with 16 Democratic senators changing their stance to support it, the U.S. Senate voted to advance the "Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025" (the "GENIUS Act"). The bill was initially proposed by Republican lawmakers in February of this year, and after multiple discussions and revisions, it will now proceed to a full deliberation process. The GENIUS Act itself has not yet been passed, and discussions will continue in the Senate, but market expectations for its passage are quite strong. Discussions related to this bill are attracting close attention not only within the crypto community but also from figures in traditional finance and macroeconomics.
Coincidentally, Hong Kong's Legislative Council also passed the "Stablecoin Bill" on its third reading on May 21st, formally establishing a licensing regime for fiat-backed stablecoin issuers to regulate Hong Kong's stablecoin market. What's generating market buzz isn't just that major financial centers are establishing their own stablecoin regulatory frameworks, but rather the underlying strategic maneuvering and the more profound strategic implications.
Japan's 30-year government bond yield reaches its highest level since 2000
Recently, volatility in the global sovereign bond market has intensified. Last week, auctions for U.S. 20-year Treasuries and Japanese long-term government bonds both performed poorly, causing long-term bond yields in both countries to continue climbing to interim highs, triggering market concerns about debt sustainability. Previously, the "tariff war" initiated by the U.S. had already put pressure on the bond markets of developed countries globally, with newly issued bonds facing insufficient demand and reduced subscription appetite from institutional investors.
Against this backdrop, an interpretation has emerged in the market: that some countries, exemplified by the United States, are accelerating stablecoin legislation with one potential motive being the hope to develop a compliant stablecoin market into a "reservoir" for their own government bonds. This would aim to attract more funds to be allocated to short-term government debt, thereby alleviating some of the confidence pressure faced by the long-term government bond market.
However, it should be noted that the stablecoin regulatory frameworks currently being designed in multiple regions worldwide reflect a high degree of prudence. Regulators generally require stablecoin issuers' reserve assets to be highly concentrated in highly liquid, short-duration products, such as short-term government bonds with maturities of six months or even less, to strictly prevent liquidity crises that could arise from duration mismatches. Therefore, even if the overall issuance scale of stablecoins experiences breakthrough growth in the future, under the current regulatory framework, their direct purchasing power and impact on medium to long-term government bond markets (such as long-term U.S. or Japanese government bonds) would likely remain limited. It would be difficult to fundamentally reverse the structural problems faced by long-term bond markets.
Nevertheless, from a broader perspective, the recent surge in Bitcoin's price and the accelerated push for stablecoin legislation globally clearly reveal an important trend: crypto assets, represented by Bitcoin and stablecoins, are no longer marginalized concepts but are increasingly entering the mainstream financial landscape and are beginning to play an undeniable role in the complex interplay of global political economy.
2. Weekly Selected Market Signals
BTC Surges Past $110,000 to Hit All-Time High, Showing Resilience Amid Renewed Trade Policy Uncertainty
Despite mounting global macroeconomic pressures—including Moody’s recent downgrade of the U.S. credit outlook, persistently high fiscal deficits in major economies, and rising long-term interest rate risks (with Goldman Sachs warning that, unless fiscal or monetary policy undergoes a major shift, the continued rise in global long-term rates could pose systemic risks)—Bitcoin has delivered a strong performance.
On May 22, BTC surpassed $110,000 for the first time, setting a new all-time high. Its market dominance remains elevated at 63.3%. This rally has been largely fueled by regulatory tailwinds, including the progress of the U.S. stablecoin legislation, Texas’ strategic BTC reserve initiative, and Hong Kong’s passage of its own stablecoin bill—collectively reducing uncertainty and boosting market confidence.
Source: TradingView, as of May 25, 2025
Later in the week, broader markets came under pressure following President Trump’s remarks on trade policy, which included threats to impose a 25% tariff on Apple and Samsung if they fail to establish manufacturing facilities in the U.S., along with plans to levy a 50% tariff on EU imports starting June 1. While risk assets generally corrected, BTC displayed notable resilience over the weekend, with panic sentiment not yet spilling significantly into the crypto space. Market participants are watching the next U.S. equity market open and subsequent policy developments to assess trade risks more clearly.
Bitcoin ETF Inflows Hit Recent High; Stablecoin Supply Rises Steadily
On the same day BTC reached its all-time high, spot Bitcoin ETFs recorded net inflows totaling $934.7 million—marking the highest level in recent weeks. However, compared to the surge seen during BTC’s breakout in 2024, institutional enthusiasm for chasing momentum remains relatively moderate.
Meanwhile, the ETH/BTC ratio remained in a narrow range throughout the week. Although ETH ETFs saw a modest increase in net inflows, the scale still lags far behind 2024 peak levels.
On the stablecoin front, supply continues to trend upward. Notably, sUSDe’s yield remains above 7%, and USDe supply grew approximately 4.5% over the past week—indicating that crypto-native capital still holds a degree of confidence in the market outlook.
Source: DeFiLlama, as of May 25, 2025
Primary Market Insight：AI-native Finance and Stablecoin-first Exchanges Take Shape
Catena Labs Raises $18 Million to Build an AI-Native Financial System
On May 20, Catena Labs—founded by Circle co-founder Sean Neville—announced the completion of an $18 million seed round led by a16z Crypto, with participation from Breyer Capital, Circle Ventures, and Coinbase Ventures, among others.
Catena Labs is building a financial infrastructure optimized for AI agents, envisioning a future where AI can independently manage financial activities such as account creation, payments, investment, and even autonomous business negotiation. The vision is “AI serving AI,” positioning artificial intelligence not just as a tool, but as a financial actor.
Although product details remain undisclosed, the team has open-sourced its Agent Commerce Kit (ACK)—a protocol framework focused on agent identity verification and autonomous payments. It plans to open APIs to developers and businesses, aiming to lay the groundwork for an AI-driven financial ecosystem. While the funding underscores strong market interest in “AI + financial infrastructure,” future success hinges on product execution and ecosystem adoption.
Catena Labs also represents a divergence from the typical “AI-generated content” narrative. Instead, it explores a path where AI agents have wallets, identities, and transactional capabilities—a shift that, if realized, could reshape the foundational roles of AI within financial systems.
True Markets Raises $11 Million Series A to Build a Stablecoin-Native Exchange
True Markets recently secured $11 million in a Series A round led by Accomplice and RRE Ventures, with follow-on participation from PayPal Ventures, Reciprocal, and Variant.
The platform is a non-custodial, stablecoin-native exchange. It uses PYUSD—the PayPal-issued stablecoin—as its primary settlement asset. All custody is handled externally by Paxos to ensure security, and the exchange’s core architecture separates execution from custody. The platform also features a proprietary matching engine and a mobile-first user experience.
Whereas most DeFi stablecoin transactions still rely on traditional AMMs and LP-based liquidity, True Markets is reimagining trading from the ground up—prioritizing regulatory clarity, transaction transparency, and settlement efficiency. With PayPal backing PYUSD, True Markets may emerge as a central player in the next generation of stablecoin-centric financial rails.
3. Project Spotlight
USD1 Lists on Binance Spot, USD1 Trading Pairs Gain Traction
USD1, officially named World Liberty Financial USD, is a stablecoin pegged 1:1 to the U.S. dollar, launched in April 2025 by World Liberty Financial, a project backed by the Trump family. Issued and managed by BitGo Trust Company, USD1 is fully backed by reserves consisting of short-term U.S. Treasury securities, U.S. dollar deposits, and other cash equivalents. As of May 25, 2025, USD1’s total issuance stands at approximately $2.152 billion, with $2.128 billion issued on the BNB Chain and $24.09 million on Ethereum. Plans are in place to expand USD1 to additional networks, such as Tron, in the future. Despite being launched just two months ago, USD1 has surpassed PayPal’s PYUSD and Binance-backed FDUSD, becoming the fifth-largest stablecoin, trailing only USDT, USDC, DAI, and USDe. However, its circulation remains highly concentrated, with 75% of the total supply held by a single address (0x20...3E36) on BNB Chain.
Last week, Binance announced the listing of USD1 for spot trading, an event the community has described as a strategic move. The first close connection and simultaneous news appearance of USD1 with Binance originated from a share acquisition of Binance by MGX, an investment firm headquartered in Abu Dhabi. USD1 was designated as the official stablecoin for completing MGX’s $2 billion investment in Binance. This was revealed by Eric Trump, the second son of former President Trump, during a speech at Token 2049 in Dubai in early May. On May 21, Binance Alpha launched BUILDon (B), a BNB Chain-based memecoin with USD1 trading pairs. On May 22, World Liberty Financial purchased 637,000 B tokens for $25,000 in USD1, coinciding with Binance’s USD1 spot listing. On May 23 and 24, the top USD1 holding address (0x20...3E36) transferred 400 million USD1 to Binance, making Binance the second-largest USD1 holder, while the address retains 1.6 billion USD1.
USD1 has partnered with over a dozen DeFi protocols, with the deepest ties to BNB Chain projects, including leading protocols like PancakeSwap, Venus, Four Meme, and ListaDAO. Market makers DWF Labs, Jump Crypto, and Wintermute hold USD1, with DWF Labs facilitating tens of millions in trading liquidity for USD1 pairs with USDT, USDC, and BNB.
The listing of USD1 trading pairs has created on-chain alpha opportunities. BUILDon (B), openly purchased by WLFI with USD1, reached a peak market cap of $370 million, achieving over 10x returns since its Binance Alpha launch. It ranks among the highest daily trading volume tokens on Binance Alpha, second only to ZKJ, which is inflated by wash trading. Beyond memecoins, VC-backed tokens like MERL and BANK have established USD1 trading pairs on BNB Chain to capture liquidity. BNB Chain tokens not yet listed on Binance Alpha may leverage USD1 trading pairs and increased USD1 trading volume to attract Binance’s attention, potentially securing a fast-track listing opportunity.
About KuCoin Ventures
KuCoin Ventures, is the leading investment arm of KuCoin Exchange, which is a top 5 crypto exchange globally. Aiming to invest in the most disruptive crypto and blockchain projects of the Web 3.0 era, KuCoin Ventures supports crypto and Web 3.0 builders both financially and strategically with deep insights and global resources.
As a community-friendly and research-driven investor, KuCoin Ventures works closely with portfolio projects throughout the entire life cycle, with a focus on Web3.0 infrastructures, AI, Consumer App, DeFi and PayFi.
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