Bitcoin broke through the $123,000 threshold for the first time on Monday.
Driven by friendly policies from the Trump administration and significant capital allocations, the world’s largest cryptocurrency$Bitcoin (BTC.CC)$broke through the $123,000 threshold for the first time on Monday. Blackrock’s Bitcoin spot ETF is approaching a size of $100 billion.
With stablecoin legislation on the horizon, U.S. House Republicans have announced the arrival of ‘Crypto Week.’ As the latest move to relax regulations, U.S. officials released new guidelines on Monday regarding how banks can provide custody services related to digital asset classes.
A short squeeze on Bitcoin has led to billions of dollars in bearish bets evaporating, contributing to a nearly 15% rally in Bitcoin over the past week.
This stands in stark contrast to the situation in recent months, where Bitcoin had been trading within a narrow range as investors grappled with trade tensions, and some previously large buyers were selling off. However, Bitcoin advocates held firm, and cryptocurrency exchange-traded funds (ETFs) have once again flourished, $Strategy (MSTR.US)$ Leading financial firms have committed to purchasing billions of dollars in Bitcoin.
Eric Jackson, President and Founder of EMJ Capital, said: ‘We didn’t expect the momentum to be so strong. Many of the sophisticated investors I’ve spoken with believe that by the end of this year, the price of Bitcoin could surge rapidly to $150,000, or even $250,000.’
Funds flood in, short sellers suffer heavy losses
ETFs and institutions continue to buy in large quantities, while a group of long-term holders and miners are unwilling to sell their Bitcoin.
Adam Guren, Founder and Chief Investment Officer of Hunting Hill Global Capital, said: ‘We are seeing record low outflows from exchanges and tight order books. There simply aren’t enough sellers to meet the demand. The move above $120,000 is more of a ‘squeeze’ than a ‘dash.”
As short sellers buy Cryptos to cover their positions, the mass unwinding has accelerated the rise in Cryptos, with about $574 million in liquidations over the past 24 hours.
According to data compiled by Coinglass, on July 9, when Bitcoin first broke through its previous all-time high, more than $1 billion in short positions were liquidated, marking one of the largest single-day liquidation events this year.
Last week, U.S.-listed Bitcoin ETFs attracted over $2.7 billion in inflows, marking the fifth-largest weekly inflow since their launch in January 2024. Blackrock’s iShares Bitcoin Trust (IBIT) currently has a market cap exceeding $85 billion. Bloomberg Intelligence expects the assets under management of this Blackrock ETF to soon reach $100 billion.
Meanwhile, according to data compiled by Coinglass, open interest in Bitcoin futures reached a record high of $86.3 billion. Data compiled by CoinGecko shows that the total market cap of all tokens is currently approaching the $4 trillion mark.
As investors flock to ETFs, a new wave of financial companies has also become participants in this bull run.
From$SoftBank Group (9984.JP)$Under Twenty One Capital and Justin Sun’s$TRON (TRX.CC)$ Inc., to cryptocurrency entrepreneur Anthony Pompliano’s ProCap Financial Inc., numerous companies are purchasing cryptocurrencies through equity and convertible bonds. Meanwhile, Strategy remains the primary corporate holder, with over 600,000 Bitcoin on its balance sheet, valued at up to $73 billion.
“This time is different?”
Gabe Selby, research director at CF Benchmarks, stated: “Compared to previous cycles, the current bull market has seen significantly less speculative frenzy related to cryptocurrencies. The level of institutional investor participation is remarkable, and new mainstream investors are also joining in.”
Stocks related to Bitcoin are rising in tandem.$Ethereum (ETH.CC)$has also joined the general uptrend in cryptocurrencies, with its price climbing to a five-month high above $3,000.
However, the market landscape is far from unassailable. This rebound has been fueled by a generally more optimistic risk appetite on Wall Street, with the stock market near record highs and AI stocks surging. An escalation in trade tensions could disrupt this momentum, with notable figures such as JPMorgan’s Jamie Dimon warning that Wall Street may be underestimating the likelihood of President Donald Trump re-implementing protectionist policies.
Regardless, Bitcoin advocates continue to argue that the cryptocurrency serves as an alternative means of transaction, a hedge against inflation, and a store of value.
Jackson of EMJ stated: “Clearly, there is a core group of investors who are very bullish on Bitcoin, and there is also a significant influx of new investor groups, which is different from previous cycles. I believe this current rally will last for a considerable period.”
Bitcoin Futures indicate that the bullish momentum has not diminished. In the perpetual contract market (a common way for traders to leverage the cryptocurrency market), the demand for long positions exceeds that for short positions.
Pankaj Balani, CEO and co-founder of Delta Exchange, stated: “A sustained break above $122,000 for Bitcoin could open the path to $124,000-$125,000. The breakout from the $119,500 to $120,000 range, supported by increased Volume, reflects continued buying interest.”
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Edited by Danial
