Circle IPO, Musk and Trump’s Fallout, and Ethereum ETF Attracts $300 Million: Capital Concentrates on Stablecoins and Mainstream Assets

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Circle IPO Releases Policy Dividend Signal, Stablecoin Track Enters Compliance Acceleration Race

The trend of the cryptocurrency market this week has been influenced by multiple events, including the official listing of Circle’s IPO, changes in the liquidity of Ethereum and Bitcoin ETFs, division among American politicians on crypto assets, and a public dispute between Musk and Trump. These events not only affect market sentiment but also have a substantial impact on the flow of funds into stablecoins, meme coins, and mainstream assets. Although there hasn’t been a clear trend reversal in the overall market, signs of structural fund positioning are beginning to emerge, and the regulatory environment and narrative core of crypto assets are gradually changing.

Musk and Trump Fall Out, Cryptocurrency Market Cap Shrinks by Approximately $80 Billion

In early June, a public rift emerged between Musk and Trump. The conflict was sparked by Musk’s strong criticism of the large tax and spending bill promoted by Trump, whom he called a “disgusting outrage” on X platform, believing it would further exacerbate the $3.62 trillion US debt burden. Trump expressed his disappointment publicly during a meeting in the Oval Office on June 5, saying “we had a good relationship, but I don’t know if it will continue.” Musk retaliated by claiming “without me, Trump would lose the election.” The conflict escalated rapidly, with Trump threatening to “terminate Musk’s government subsidies and contracts,” while Musk openly supported Trump’s impeachment.

Bitcoin and Ethereum ETF Fund Flows Differentiate, Market Structure Enters Adjustment Period

Despite short-term disruptions due to political and economic events, the ETF market has shown a complex pattern of fund flows. According to Farside Investors data, Bitcoin ETFs experienced significant volatility from late May to early June, with BlackRock’s Bitcoin ETF setting a record of $430.8 million in outflows on May 30, ending a 31-day streak of inflows. However, according to Bloomberg data, Bitcoin ETFs performed strongly overall in May, with IBIT recording the largest monthly inflow since its launch in January 2024, attracting over $6.35 billion in net inflows that month, pushing total assets under management over $71 billion. Ethereum ETFs, on the other hand, showed a completely different performance. According to Farside Investors data, BlackRock’s Ethereum ETF recorded $77.06 million in inflows on June 3, driving total inflows for the day to $109.4 million. BlackRock’s Ethereum ETF has accumulated inflows of over $4.73 billion since its launch, with inflows recorded for 12 consecutive trading days since May 15. This rotation of funds reflects investors’ growing expectations for the “Ethereum season,” with the price of Ether rebounding strongly from above $1,800 in early May to over $2,600, with a monthly increase of 45%, mainly driven by the successful implementation of the Pectra hard fork upgrade and optimistic expectations for tokenization trends.

Summary: Cautious Optimism in Structural Transformation

This week’s market shows a subtle “structural optimism,” with mainstream assets maintaining relative strength under policy dividends and institutional support, while meme coins and political concept coins undergo fund rotation and adjustment. Circle’s IPO represents regulatory endorsement of stablecoin infrastructure and paves the way for future crypto compliance; at the same time, the differentiated flow of ETF funds and the continuous rebound of Ethereum prices provide substantial signals of market maturity enhancement.

However, political uncertainty and narrative fragmentation continue to put pressure on certain asset classes, and the conflict between Musk and Trump rings an alarm bell for the market, reminding investors to distinguish between narratives and fundamentals. Technical indicators and market sentiment indices are overall in the “healthy but need careful observation” range, and whether the market can continue to reach new highs will depend on US economic data, the progress of Ethereum ETF reviews, and the evolution of the political situation.

Against this backdrop, it is recommended that investors focus on the intersection of fund flows and narrative evolution, maintain a high sensitivity to macro and policy signals, and adopt flexible strategies to respond to market rotations. Mainstream assets still have room for performance, but the pace of entry and the structure of holdings need to be more carefully designed. The current market is in a key transition phase from politically driven to fundamentally driven, a transformation that itself implies new investment opportunities and risks.

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