In August 2025, looking back at the cryptocurrency market, we are experiencing the mid-stage of a bull run. Bitcoin has broken through $120,000 to set a new high, and Ethereum is also approaching its historical peak, with the overall market capitalization once exceeding the $4 trillion mark. Despite recent market fluctuations causing concern among investors, from a historical perspective, this seems more like a normal adjustment in the process of a bull run rather than a signal of a trend reversal.

The market fundamentals remain strong. The U.S. government's attitude toward encryption has undergone a significant shift from strict regulation to active acceptance. The government not only allows 401(k) retirement plans to engage in crypto assets but is also considering the establishment of a national Bitcoin reserve. This optimization of the policy environment provides long-term institutional support for the market. According to industry data, cryptocurrency investment products have attracted $3.75 billion in inflows, and the asset management scale of a major asset management company's Bitcoin trust product has exceeded $87 billion, highlighting the continuous increase in institutional investor confidence.

Technological innovation has always been the core driving force behind the development of the cryptocurrency industry. Ethereum's scalability solutions have made significant progress, and the successful implementation of multiple Layer 2 networks has not only addressed Ethereum's performance bottlenecks but also paved the way for broader application scenarios. The total locked value of these Layer 2 networks has reached hundreds of billions of dollars. On the application front, innovations in decentralized finance (DeFi) protocols remain active, expanding from traditional lending and trading services to more complex financial products, continuously pushing the boundaries of the industry.

Although the market may face volatility in the short term, the long-term prospects for the development of the encryption currency industry remain bright. The combined push of technological advancements, institutional improvements, and market demand will continue to support the sustained growth of this emerging industry. For investors, while paying attention to short-term market fluctuations, it is more important to focus on the long-term development trends of the industry and to rationally assess risks and opportunities.