On June 3, 2025, the electronic screens in the Wall Street trading hall were suddenly flooded with blood-red. Bitcoin's price broke through the $110,000 mark, and short positions collectively liquidated within an hour, as $2.7 billion flooded into Bitcoin's spot ETF, pushing the price to historic highs. A trader at the Chicago Mercantile Exchange stared at the screen and murmured, 'This is not a retail celebration; it's a precise slaughter initiated by capital using ETFs as new weapons.'
1 Macro Changes: Policy tailwinds ignite institutional ammunition depots.
As signals from the Federal Reserve regarding interest rate cuts resonate with cooling inflation, a capital encirclement targeting the crypto market quietly unfolds. In May 2025, the U.S. core PCE inflation rate drops to 2.52%, a new two-year low. Meanwhile, the Federal Reserve releases expectations for interest rate cuts, and the liquidity gates for the dollar are about to open. This signal is keenly captured by Wall Street—$3.03 billion in net inflows into BlackRock's Bitcoin ETF in a single week, setting an annual record, while the Norwegian Sovereign Wealth Fund holds 42,000 Bitcoins—valued at over $4.6 billion—through a discreet channel.
A deeper policy conspiracy is surfacing. The Trump administration appointed PayPal mafia veteran David Sacks as the White House cryptocurrency czar, who quickly pushed for the (GENIUS Stablecoin Bill) to be enacted. This bill mandates that stablecoins be 100% backed by U.S. Treasury bonds, deeply binding the crypto market to dollar hegemony. With the $36 trillion Treasury crisis looming, Bitcoin is endowed with the strategic status of 'digital gold', becoming a new pivot in the dollar system.
2 Short Squeeze: ETFs have become a new weapon for Wall Street.
Traditional short-selling forces are retreating under the siphoning effect of Bitcoin ETFs. On June 3rd, $2.7 billion in ETF funds pierced three critical weak points like a scalpel.
2.1 Liquidity Trap: When shorts attempted to crash the market at $105,000, market makers from BlackRock IBIT instantly absorbed all sell orders, compressing the bid-ask spread to 0.01%.
2.2 Volatility Control: S&P 500 component stock funds incorporate Bitcoin into hedging portfolios to suppress historically high volatility.
2.3 Technical Breakdown: Whales ambushed and accumulated 18,000 BTC in the 24 hours leading up to the breakout, forming a golden cross technical pattern.
The fear-greed index staged a dramatic reversal: soaring from 39 (fear) to 73 (greed) within 48 hours. When 170,000 short accounts turned red in the on-chain liquidation monitoring map, a total of $572 million turned to ashes. A hedge fund manager who once shorted MicroStrategy chuckled bitterly: 'What we are fighting against is not cryptocurrency, but the flood of dollars through ETFs.'
3 East vs. West: The game between Asian retail investors and Western institutions runs deep.
In this capital feast, regional games are quietly emerging. Data shows that the Asian trading session contributed 58% of the trading volume, but the flow of funds presents a stark contrast:
- Eastern Strategy: Retail investors in China and South Korea are leveraging Binance contracts up to 125 times to chase the volatility dividends of meme coins like Trump and MAGA.
- Western Chess Game: BlackRock uses ETF shares as collateral to sell put options on the Chicago Options Exchange, achieving 'zero-cost positions'.
This division reflects structural changes in the market, with former believers in decentralization discovering that active addresses on the Bitcoin chain have decreased by 17% amidst soaring numbers—ETFs are draining the soul of the spot market.
> A new saying circulates among Wall Street traders: 'Buy the code, not the token; watch the quarterly reports, not the white papers.'
4 Conspiracy Emerges: The Trump administration's Bitcoin strategy.
Political power and capital have achieved a historic convergence at this moment. World Liberty Financial, controlled by the Trump family, secretly absorbed 32,000 Bitcoins through the over-the-counter market a week before prices broke through. Meanwhile, Trump shouted on social media: 'Not a single Bitcoin can be sold!'—outwardly calling for holding coins, but in reality squeezing liquidity.
A deeper national strategy is surfacing. The U.S. controls only about 200,000 Bitcoins (10% of circulation) and urgently needs millions of reserves to control pricing power. A former White House economic advisor revealed an internal strategy in two steps:
- Short-term Squeeze: Attracting opposing positions through regulatory loosening, then leveraging the ETF channel to blow up shorts.
- Long-term Hoarding: Forcing institutions to hold coins long-term through tax law adjustments, aiming to control 30% of circulation.
Such operations directly target the crisis of dollar hegemony. $35 trillion in national debt sees an additional $1 trillion every 100 days, the petrodollar system faces rebellion from Saudi Arabia, and gold reserves are repatriated by multiple countries. When Bitcoin's total market value surpasses 10% of gold, it officially becomes a new anchor point in the dollar system.
5 Hidden Dangers: The ecological fissures behind the celebration.
Under the capital feast, the cryptocurrency market is undergoing a genetic mutation. The total market value of stablecoins has fallen by 37% from its peak in 2024, and the trading volume of CEX altcoins has hit a three-year low. The once-thriving 'altcoin season' transmission mechanism has completely broken down—when BlackRock CEO Larry Fink announced a target price of $700,000, funds only remained in the IBIT trust and no longer flowed into Uniswap or the Solana ecosystem.
The collapse of security defenses is even more chilling. In May, hackers stole assets worth $182 million, North Korean hackers used 'wrench attacks' to interrogate high-net-worth holders, with a single raid yielding $5.2 million. When Coinbase faced a $400 million lawsuit for leaking user data due to customer service bribery, the ideal of decentralization crumbled before centralized vulnerabilities.
06 Endgame Simulation: The Tamed Bitcoin and the Disappearing Crypto Spirit.
Standing at the peak of $110,000, Satoshi Nakamoto's white paper is turning yellow in the vaults of Wall Street. As Bitcoin's 30-day volatility drops to the level of traditional tech stocks and ETF holdings exceed miners' reserves, a harsh reality has emerged: the financialization of Bitcoin is the incorporation of traditional capital.
The crypto world once shouted 'banks are untrustworthy', but now BlackRock builds a new power hub with $55.38 billion in ETF management scale; blockchain touted 'resistance to censorship', but now the GENIUS act transforms each stablecoin into a U.S. Treasury bond vehicle. > Capital never sleeps, but freedom needs to breathe. When $2.7 billion in ETF ammunition blasts open the $110,000 door, the ghost of Satoshi Nakamoto whispers in the block rewards: Is this a victory for Bitcoin, or the ultimate pacification of the crypto uprising by Wall Street?