Original text: galaxy
Translated by: Yuliya, PANews
Bitcoin broke above $112,000 this morning, setting a new historical record. This surge is the result of multiple factors, including the continued weakness of the dollar, ample global liquidity, and accelerated entry of institutional capital. Galaxy reviewed market dynamics since June, analyzing the impact of geopolitical conflicts and economic data on risk assets, and exploring Bitcoin's unique performance in this rally and its future trajectory. Below is the original article, translated by PANews.
June Review
The market in June 2025 was shrouded in trade uncertainty, geopolitical conflicts, and complex economic data. However, despite the severe macro backdrop, risk assets generally rebounded. The U.S. stock market rose across the board, with both the Nasdaq and S&P 500 indices setting historical highs. Bitcoin briefly fell below $100,000 in mid-June but then rebounded strongly, rising 2.84% for the month. In contrast, the overall cryptocurrency market fell 2.03%, with Ethereum experiencing increased volatility and underperforming other mainstream assets, recording a 2.41% decline.
At the beginning of the month, the market overall leaned towards optimism, with investors being relatively positive about macro data and the geopolitical situation. The U.S.-China trade tensions initially flared up again, but eased after the leaders of the two countries had a phone call. The Chinese manufacturing Purchasing Managers' Index fell to its lowest point since 2022, and the Organization for Economic Cooperation and Development again lowered global growth expectations. On the U.S. side, economic data showed mixed results: non-farm payroll numbers exceeded expectations, the unemployment rate remained stable, initial jobless claims unexpectedly decreased, while retail sales saw a decline. The June Consumer Price Index (CPI) again fell below expectations, reinforcing the view of easing inflation. The Federal Reserve maintained interest rates at the June FOMC meeting for the fourth consecutive time, stating the need to wait for clearer signals regarding inflation and the labor market.
The cryptocurrency market experienced several short-term shock events in June, including the public conflict between Trump and Musk over tax policies and the brief escalation of geopolitical tensions. After the market came under pressure in the penultimate week of June, Bitcoin rebounded alongside improving market sentiment and increasing institutional participation. Bitcoin ETFs saw total net inflows exceeding $4 billion in June. Ethereum faced higher volatility and deeper corrections, with specific incentives still unclear. Meanwhile, crypto treasury strategies gained attention, as several companies began expanding their holdings to non-Bitcoin assets such as ETH, SOL, BNB, and HYPE, indicating a high level of market recognition for this strategy.
Geopolitics became the main theme in late June. On June 13, war broke out between Israel and Iran. Despite Israeli airstrikes on Iranian nuclear facilities and retaliatory missile attacks from Iran, the market initially showed stability. After the U.S. airstrikes on three Iranian nuclear facilities on June 21, cryptocurrency asset prices plummeted, while the U.S. stock market remained stable. Trump announced a ceasefire agreement mediated by Qatar on June 24, alleviating short-term market panic. Although sporadic missile attacks continued to occur, the cryptocurrency market gradually repaired itself after the ceasefire, while traditional safe-haven assets like gold and oil retreated, reflecting a reduction in market concerns about long-term conflict.
June Highlights:
Crypto treasury craze: Currently, 53 companies are involved in crypto treasury allocations, covering 8 different crypto assets
Accelerated demand for stablecoins: After the passage of the GENIUS Act, multiple companies are preparing to issue their own stablecoins
"12 Days that Shook the World": The Israel-Iran conflict drew global attention, but had limited impact on risk assets
Diversified allocations post-BTC
An unexpected trend in 2025 is the rapid adoption of crypto treasury strategies by companies, particularly in June, where the trend significantly accelerated, with the number of relevant companies nearly doubling. Measured by trading volume, the scale of Bitcoin purchases by crypto treasury companies in June surpassed the total net inflow of the U.S. spot Bitcoin ETF (which was $4 billion that month).
Although Bitcoin and Ethereum still dominate, an increasing number of companies are beginning to allocate a wider range of crypto assets, such as SOL, BNB, TRX, and HYPE, indicating an increasingly strong trend towards diversification beyond mainstream coins. According to Galaxy Research data, among the 53 confirmed crypto treasury companies, 36 focus on BTC, 5 allocate SOL, 3 allocate XRP, 2 each allocate ETH, BNB, and HYPE, and there is one that allocates TRX, FET, and a comprehensive altcoin investment portfolio.
The continuation of this trend is strongly anticipated, with companies continuing to push this strategy while the market also shows a strong willingness to provide ample funding and support multi-asset allocation.
However, the market has also begun to express doubts about this strategy, especially as some companies finance crypto asset allocations through debt, raising concerns about potential leverage risks. Currently, commonly used instruments are zero-interest or low-interest convertible bonds, which, if they are 'in the money' at maturity (i.e., the company's stock price exceeds the conversion price, making conversion to equity economically beneficial), investors can choose to convert them into company equity. However, if they are 'out of the money' at maturity, the company must repay the principal and interest in cash, raising concerns about liquidity and repayment capability. Some companies even lack sufficient cash to pay interest.
In this situation, companies typically have four response options:
Selling crypto assets to raise funds may put downward pressure on market prices and affect treasury companies holding the same assets;
Issuing new debt to repay old debt is equivalent to refinancing;
Issuing new shares for financing to repay debt or purchase additional assets carries less risk of default;
If asset values are insufficient to repay debts, default may occur.
The path companies ultimately take will depend on the market conditions at maturity. Generally, companies can only resolve issues through refinancing if the market allows.
In contrast, raising funds through issuing stocks to purchase crypto assets is less risky because it does not involve debt and does not create a mandatory repayment obligation, making it more readily accepted in the overall risk structure.
According to a report released by Galaxy on June 4, current market concerns about leveraged structures may be exaggerated. Most of the debt issued by Bitcoin treasury companies is set to mature between June 2027 and September 2028. Although the crypto industry has previously faced systemic risks due to high leverage, this type of debt structure currently does not pose an imminent threat. However, it is worth noting that if more companies adopt this strategy in the future and issue shorter-term debt, the potential risks will gradually accumulate.
Circle's listing and the GENIUS Act catalyze an industry turning point
June 2025 became a key turning point for the stablecoin industry, primarily driven by two major events: Circle's successful listing and the U.S. Senate's passage of the GENIUS Act, the first comprehensive stablecoin legislation in U.S. history.
As the world's second-largest stablecoin issuer, Circle became the first native stablecoin company to go public in the U.S., with its stock price soaring more than sixfold in June. Despite such a significant increase suggesting that the IPO pricing may have been too low, more importantly, investor recognition of stablecoins' future role in infrastructure has significantly strengthened.
On June 25, the GENIUS Act was passed in the Senate with a vote of 68 to 30, marking a breakthrough after months of procedural voting and political maneuvering. This includes a critical procedural vote failure on May 8 due to last-minute disagreements. The bill has now been handed over to the House of Representatives, where some legislators have suggested merging it into the broader CLARITY Act. However, the prospects for merging remain unclear, especially against the backdrop of President Trump's public opposition.
Under regulatory push, corporate interest in stablecoins continues to grow. U.S. retail giants like Walmart and Target are considering issuing their own stablecoins; Mastercard is further expanding ecosystem support through the integration of stablecoin products from Paxos, Fiserv, and PayPal. These companies are not only racing to issue stablecoins but also seeking to gain an advantage in circulation scale and actual usage. Industry focus has shifted from 'Can it be issued?' to 'Can it be implemented?' The success of stablecoins will depend on their penetration in real payment scenarios and user coverage.
Internationally, this trend is also gradually spreading. For example, Ripple has obtained regulatory approval for its RLUSD stablecoin in Dubai, and the Bank of Korea is also exploring the issuance of a stablecoin pegged to the Korean won. However, the current development in the U.S. is the most advanced.
Stablecoins are just the starting point. They mark the first phase of introducing traditional fiat currency into the blockchain, achieving 24/7, rapid interoperability infrastructure deployment. The next phase will focus on the introduction of on-chain financial assets, starting with tokenizing stocks.
Robinhood has recently launched tokenized trading of 200 listed stocks for users in Europe, becoming a pilot platform to test user demand and execution quality. Coinbase is also seeking corresponding regulatory approval in the U.S. to promote similar products. These early attempts pave the way for more traditional financial products to be brought on-chain, with the next step expected to cover asset classes such as private credit and structured funds.
Geopolitical conflicts have a limited impact on the market
The Israel-Iran war that broke out on June 13, 2025, lasted for 12 days. Although it attracted global public attention, its long-term impact on risk assets was limited. In the early stages of the conflict, the cryptocurrency market and stock market reacted mildly; however, after the U.S. government launched 'Operation Midnight Hammer' on June 22, airstrikes on Iranian nuclear facilities led to a sharp decline in crypto asset prices. With Trump's announcement of a ceasefire agreement reached with Qatar on June 24, prices quickly rebounded. Although there were sporadic missile attacks at the end of the month and the war has not officially ended, the market as a whole has stabilized.
During this period, Bitcoin's trend rose in sync with U.S. stocks, showing no safe-haven attributes. Compared to April and mid-May, when Bitcoin was seen as a store of value asset due to trade tariffs and global bond market tensions, this time it leaned more towards risk asset logic. Bitcoin outperformed gold and the overall cryptocurrency market, partly due to strong institutional support, including $4 billion in monthly ETF inflows, continued purchases by treasury companies, and signs of sovereign buying, indicating that geopolitical impacts on Bitcoin are relatively short-lived.
This conflict has also rekindled market focus on Iran's local crypto infrastructure, particularly the Bitcoin mining industry. According to an estimate by Elliptic in 2021, approximately 4.5% of global Bitcoin mining occurs in Iran, primarily relying on low-cost government-subsidized electricity settled in Iranian rials. This structure has brought substantial profits during Bitcoin's bullish cycles.
After the U.S. airstrikes, rumors surfaced that some Iranian mining farms were damaged, resulting in a decline in network hash power. However, short-term fluctuations in hash power are often more likely caused by block time differences or data noise, and there is currently no clear evidence indicating that the conflict has caused systemic damage to mining facilities. Another possible explanation is that the heat wave in the U.S. East Coast and Midwest has forced miners to temporarily reduce production.
Beyond the infrastructure, this conflict has also sparked discussions about the role of crypto in Iran's financial system. For a long time, Iran has seen significant adoption of cryptocurrencies by the public and gray economy due to high inflation, international sanctions, and an unstable exchange rate against the dollar.
Past data from Chainalysis shows that during the assassination of Hezbollah's leader in 2024 and multiple missile exchanges, there was a significant increase in the outflow of crypto assets from Iran.
Bitcoin and Tron have historically been the main blockchain networks used in Iran, especially Tron for USDT stablecoin transfers. However, during this round of conflict, the on-chain trading and settlement volume of stablecoins did not show significant increases, indicating that the overall usage pattern of crypto has not changed due to the war, while on-chain activity among short-term holders has actually decreased.
Although on-chain data did not show significant anomalies, the crypto industry symbolically emerged during this conflict: Iran's largest crypto exchange, Nobitex, suffered a $90 million hack during the war, with the attackers being a pro-Israel organization called 'Predatory Sparrow', which left anti-IRGC messages such as 'F*ckiRGCTerrorists' through wallet addresses. Nobitex has previously been linked to funding flows involving IRGC-associated entities, and this attack appears more as a form of cyber psychological warfare rather than a profit-driven attack.
Iran is one of the countries facing the most severe currency depreciation globally and is under long-term sanctions. For such societies, crypto assets indeed play an important role in cross-border capital flows. The political and network dimensions they have shown in this round of conflict further indicate that crypto has become part of the financial system of certain countries.
Key variables in July will influence macro and market trends
As we enter July 2025, the core focus of the market will be on several key events and macro indicators that may have a significant impact on asset pricing and the overall environment.
Trump signed the 'Big and Beautiful' Act on July 4, which could significantly expand the already higher-than-expected fiscal deficit. According to the latest economic data, U.S. fiscal spending is continuously exceeding revenue levels.
Inflation pressure remains a core consideration, but recent data shows that inflation has eased. The core Personal Consumption Expenditures (PCE) index is on a downward trend, recording only a monthly increase in February 2025, with the increase likely mainly stemming from prior pricing pressures related to tariffs. For now, inflation seems to be under control, but the real risk lies in the Federal Reserve prematurely cutting rates, which could reignite price increases.
The labor market remains tight, providing greater flexibility for Federal Reserve decision-making. In June, new job numbers exceeded expectations, and the unemployment rate dropped to 4.1%, lower than the most optimistic market forecast. This decline is partly due to the labor participation rate falling from 62.4% to 62.3%. Currently, market expectations for a rate cut in July have dropped to zero, with an overall expectation of two rate cuts for the year, depending on the trajectory of tariffs and growth data.
Another trend to closely watch is the continued weakness of the dollar. Economic uncertainty, unclear fiscal policy, and expectations of potential rate cuts in the future are jointly driving the dollar weaker. The dollar index (DXY) is heading towards its worst first half performance since 1973. Risk assets are priced in dollars, and the weakness of the dollar helps explain the current resilience of the stock market and the strong performance of Bitcoin, despite complex fundamental data. Meanwhile, U.S. M2 money supply is nearing historical highs, and market liquidity is ample; if the Federal Reserve shifts to easing in the second half of the year, the dollar may come under further pressure.
Key time points to focus on in July:
July 11: Consumer Price Index (CPI) released
July 16: Producer Price Index (PPI) and Federal Reserve Beige Book released
July 30: FOMC interest rate decision
Cryptocurrency performance
Volatility data
(The above content is excerpted and reprinted with the authorization of partner PANews, original link)
"Behind Bitcoin's $112,000 New High: Weak Dollar and Institutional Inflows" This article was first published in (Blockkey).
