For months, Bitcoin sat still. The ‘number only goes up’ prophecy did not deliver. The faithful waited.
Now though the liturgy returns, after the world’s largest cryptocurrency surged past US$123,000 for the first time on Monday.
Thank the convergence of government-friendly policy momentum and big-money positioning. House Republicans declared “Crypto Week” in Washington as stablecoin legislation inches closer to passage. In the latest easing of the regulatory stance, US officials on Monday issued fresh guidelines for how banks can offer custody services tied to the digital asset class.
The losers: Non-believers who were caught in a short squeeze that wiped out billions of dollars of bets against the digital currency — helping to turbocharge the roughly 15% rally over the past week.
It’s a reversal of sorts. Bitcoin has been bound to a narrow range for months as investors grappled with trade tensions and one-time whales sold out. But the Bitcoin evangelists held on, while crypto exchange-traded funds boomed anew and Treasury companies, led by Michael Saylor’s Strategy, which have pledged to buy billions of dollars in the original virtual currency.
“I don’t think it was anticipated that there would be this level of upward movement so quickly,” said Eric Jackson, president and founder of EMJ Capital. “A lot of the smart investors that I talk to think we can see a quick shot to US$150,000 and even US$250,000 by the end of this year.”
See also: Bitcoin hits record high of US$120,000 as bullish momentum builds
Bitcoin Breaks Out of Range
ETFs and institutions are still gobbling up supply, while a cohort of long-term holders and miners simply aren’t selling.
See also: Alexander Hamilton’s three lessons for stablecoins
“We’ve seen record low exchange outflows and tight order books. There’s just no sellers to absorb demand,” said Adam Guren, founder and CIO at Hunting Hill Global Capital. “BTC breaking above US$120K is less ‘sprint’ and more ‘squeeze.’”
A swarm of liquidations in bearish bets against crypto assets has accelerated the rally — some US$574 million over the past 24 hours — as short sellers buy the tokens to close out positions.
More than US$1 billion in short positions was wiped out when Bitcoin first topped its previous all-time high on July 9, one of the largest liquidations in a single day this year, according to data compiled by Coinglass.
The US-listed Bitcoin ETFs attracted more than US$2.7 billion in inflows last week, the fifth-largest weekly tally since their launch in January 2024. BlackRock’s iShares Bitcoin Trust (IBIT) now has a market capitalization of more than US$85 billion. Bloomberg Intelligence projects assets in the BlackRock ETF could climb to US$100 billion soon.
Meanwhile, open interest in Bitcoin futures reached a record US$86.3 billion, according to data compiled by Coinglass. The total market value of all tokens is now brushing up against the US$4 trillion threshold, according to data compiled by CoinGecko.
Investors Pour US$2.7 Billion into US Bitcoin ETFs Last Week
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While investors pile into ETFs, a new wave of treasury companies are fresh participants in the current bull market run.
Firms from SoftBank Group Corp.-backed Twenty One Capital and Justin Sun’s Tron Inc. to influencer Anthony Pompliano’s ProCap Financial Inc. are raising equity and convertible debt to buy crypto — injecting the assets into vehicles that already trade on a stock exchange, with varying degrees of financial engineering. Meanwhile, Saylor’s Strategy, still the dominant corporate holder, looms large with more than 600,000 Bitcoin on its books with the value of its holdings hitting a once-unthinkable US$73 billion.
“The latest bull run has less meme stock frenzy compared to previous cycles,” said Gabe Selby, the head of research at CF Benchmarks. “The institutional adoption is deafening with new and more mainstream investors.”
Bitcoin-aligned equities — miners, brokerages, exchanges — are climbing in sync. Ethereum has joined the broad crypto rally, climbing to a five-month high above US$3,000.
Still, the market setup is far from bullet-proof. The rally has been buoyed by a broader risk-on sentiment on Wall Street, with stocks near records and AI-driven stocks rallying. An escalation in trade tensions could break the spell, with prominent voices like JPMorgan’s Jamie Dimon warning Wall Street is underpricing a renewed protectionist turn from President Donald Trump.
Regardless, Bitcoin advocates have clung to the various narratives that the cryptocurrency is an alternate means of exchange, an inflation hedge and a store of value during double-digit market downturns over the past decade. They remain stalwart.
“There is a core demographic of investors who are very pro-Bitcoin obviously, and then there’s been an explosion of new treasury stocks, which is different than past cycles,” said Jackson of EMJ. “But you don’t have the dinner conversations about Bitcoin the way that you did in those past market peaks. So I still think there is considerable more time to go in this current rally.”
Bitcoin futures suggest there’s no let-up in the bullish momentum. In the world of perpetual contracts — a popular way for traders to ride the crypto market with leverage — demand for long positions exceeds that for bearish bets on the token.
“A sustained move above US$122,000 could open the path toward US$124,000–US$125,000,” said Pankaj Balani, CEO & co-founder of Delta Exchange. “The breakout above the US$119,500–US$120,000 range, supported by rising volume, reflects continued buying interest.”
