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Bitcoin (BTC) hit a new all-time high last night and continues to rise, reinforcing its position as "Digital Gold." The rally gained momentum following Moody’s downgrade of U.S. bonds, which weakened the U.S. dollar (USD).
(Please note that there will be market correction soon as it passes new all time high).
Picture: Screen shot ~12 hrs ago from publish time.
The Trump-era tax cuts are projected to increase the federal deficit, putting further downward pressure on the USD. In addition, markets are anticipating a Federal Reserve rate cut in the second half of the year. These macroeconomic indicators suggest continued upward momentum for BTC.
Based on recent trends, a net inflow of approximately USD 1.6–2 billion appears to correlate with a USD 5,000 increase in BTC’s price. If BTC receives a net inflow of USD 450 billion, the price could reach USD 1 million — a 10x increase from the current level of approximately USD 100,000. While exact predictions are not possible, available data supports a projected range of BTC/USD 500,000 to 1,000,000.
(Recent data indicates that a net inflow of approximately $674.9 million into BlackRock’s iShares Bitcoin Trust (IBIT) on May 2, 2025, contributed significantly to this price surge. This single-day inflow accounted for the entire increase in Bitcoin's price during that period. Additionally, between April 25 and May 1, 2025, Bitcoin ETFs experienced a total net inflow of $1.51 billion, with BlackRock’s IBIT ETF attracting over $2 billion of that amount .
Based on this data, it appears that for every $674.9 million in net inflows into Bitcoin ETFs, the price of Bitcoin increased by approximately $5,000. Furthermore, the case should consider inflow from other retail investors. Therefore, estimated USD 5,000 increase in USD 1.6 billion net inflow. However, it's important to note that this relationship is not linear and can be influenced by various factors, including market sentiment, macroeconomic conditions, and regulatory developments.
In summary, recent market activity suggests that substantial institutional inflows into Bitcoin ETFs have been a significant driver of Bitcoin's price increases. While the exact amount of inflow required to achieve a specific price increase can vary, the recent data provides a useful benchmark for understanding the impact of institutional investment on Bitcoin's market price.)
With over USD 20 trillion sitting in M2 money supply — amid high interest rates and low inflation — a shift of capital into alternative assets like BTC could accelerate if the USD weakens further.
Other Key Drivers Include:
🌟Institutional and Government Adoption: For the first time, institutions and governments are considering BTC as a reserve asset.
🌟Asset Tokenization: U.S. Treasury Secretary Scott Bessent recently disclosed plans to digitalize government bonds.
🌟Blockchain Integration: SWIFT and major financial institutions are adopting crypto and blockchain technology for instant settlements. (China already rolls out its digital RMB ahead).
🌟E-Government Applications: The U.S. plans to adopt blockchain for e-governance and transparent public tenders — a trend likely to be followed by other nations.
Market Outlook and Profit-Taking Strategy:
Unlike stocks, crypto assets do not generate dividends. Investors can only realize profits through selling, which often leads to market corrections. A significant correction is expected around the Christmas holiday period as investors take profits.
Recommended Profit-Taking Windows in This Bull Run:
1. Before the end of September
2. Before the end of November or ahead of the December holiday season.
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Disclaimer:
The information provided in this content is for informational purposes only based on interpretation of facts, data and information available at the time of writing. The opinions expressed are based on personal analysis and are subject to change without notice due to the act of key actors in the system. Cryptocurrency investments are highly volatile and carry significant risk. Always conduct your own research and adopt risk management and consult with a qualified financial advisor before making any investment decisions. The author (I am) not responsible for any financial losses or gains resulting from the use of this information.