$BTC The Past, Present, and Future of Bitcoin

A Periodic Review and Summary of Cryptocurrency Market Trends

1. The Logic of the Past

In the past two years (2023-2024), the logic behind Bitcoin's rise can be divided into two parts: external macro drivers and internal capital inflow;

External: The Windfall of Interest Rate Cuts

The global macro environment is the main theme. In 2022-2023, the Federal Reserve's interest rate hike cycle made risk assets shiver, but starting mid-2023, the market caught a whiff of interest rate cuts;

Expectations of loosened USD liquidity and a warming risk appetite made Bitcoin, as 'digital gold' and a high beta asset relative to the US stock index, a natural fit for this logic. The anticipation of interest rate cuts was like giving the market a shot of adrenaline, and Bitcoin soared in response.

Internal: The Real Money of ETFs

Now, on the internal side, the approval of Bitcoin ETFs and the influx of capital are hardcore drivers. From 2023 to 2024, US Bitcoin spot ETFs were launched one after another, and institutional funds on Wall Street stopped being spectators, jumping in to buy, buy, buy. The purchasing power brought by major players like Fidelity, BlackRock, and MicroStrategy pushed Bitcoin from over 20,000 to around 100,000; retail investors FOMO-ed in, institutions increased their stakes, and the consensus was stronger than ever.

Why did good news frequently emerge at the end of 2024, yet the price did not rise?

Remember the end of 2024, when various positive news stories were flying around, like strategic reserves and other things—ETF funds were still flowing, the halving narrative was still being told, and institutional calls never stopped—but the price just wouldn’t cooperate, consolidating or even retracing. Why? One reason is that the price is very high, and the other is that the purchasing power consensus of capital has collapsed.

External: Macro Expectations Went Awry. The market originally bet on the Federal Reserve flooding the market with liquidity, but inflation reignited, disrupting the pace of interest rate cuts, and the USD index wasn’t as weak as expected, dousing the enthusiasm for risk assets.

Internal: The Diminishing Marginal Effect of ETFs. Early capital inflows were substantial, but later on, new capital slowed, and the FOMO sentiment among retail and institutional investors also depleted. The old trope in the crypto world of 'good news being fully priced in is bad news' played out again.

In summary: The sentiment of good news has been overly consumed. #加密市场回调 #比特币战略储备