Recently, the Bitcoin market has been very active, influenced by multiple factors, with price trends fluctuating, presenting both opportunities and risks.
I. Price Trend Review
As of July 14, Bitcoin broke through $122,000 during trading, hitting a historic high. On July 10, it surged to $112,000, initiating a new round of increases. From the beginning of the year to July, despite multiple fluctuations, Bitcoin's price has increased by over 20%.
In mid-March, influenced by expectations of a Federal Reserve rate cut, the appeal of spot ETFs, and the regulatory stance of the Trump administration, its price broke through $83,000 and $86,000; it returned to $100,000 in May and reached a new high of $110,000 on the 22nd; on July 3, it touched $110,000 again and broke through $120,000 on the 14th.
However, after reaching new highs, prices plummeted. From 8 AM on July 15 to 8 AM on the 16th, 120,000 overseas users were liquidated within 24 hours, amounting to $465 million (approximately 3.33 billion RMB); as of 2 PM on the 17th, 122,000 were liquidated within 24 hours, amounting to $462 million (approximately 3.31 billion RMB), highlighting the high risks and volatility in the market.
II. Factors Driving Price Increase
(I) Continued Inflow of Institutional Funds
In the second quarter of 2025, U.S. listed companies purchased about 131,000 Bitcoins, an increase of 18% year-on-year. Strategy holds 597,000 coins, ranking first, followed closely by miner Mara with nearly 50,000 coins.
Since the U.S. launched the Bitcoin ETF in January 2024, current reserves exceed 1.4 million coins, accounting for 6.8% of the 21 million supply cap; publicly listed companies hold about 855,000 coins, accounting for 4%. In the first two weeks of July, net inflows into the ETF exceeded $1.2 billion, reflecting strong institutional interest. BlackRock's IBIT fund reached $76 billion, doubling since the beginning of the year, with stable institutional demand supporting prices.
(II) Marginal Improvement in Regulatory Environment
Many countries are paying attention to cryptocurrency regulation, and the market is becoming more institutionalized. In the U.S., the Stablecoin Innovation Guidance and Establishment Bill will be implemented in 2025, allowing financial accounting standards to permit institutions to measure crypto assets at fair value and recognize them as income, enhancing reserve incentives.
Hong Kong's Stablecoin Regulation will take effect on August 1, pioneering 'value anchoring regulation'; the EU's Crypto Asset Market Regulation Bill classifies Bitcoin as a commodity-type asset, clarifying property rights. Global regulatory improvements have enhanced market confidence.
(III) Market Risk Appetite Improvement
NVIDIA's market value broke $4 trillion, driving the NASDAQ to a new high, with funds flowing into crypto assets, benefiting Bitcoin. The Federal Reserve's June meeting minutes released dovish signals, with most officials believing that a rate cut is suitable within the year, enhancing risk appetite and favoring high-volatility assets. Additionally, the weakening dollar index also provided upward support for Bitcoin priced in dollars.
III. Market Risk Reminder
(I) High Volatility Risk
Bitcoin prices are highly volatile, lacking a stable value foundation. After soaring from under $10,000 to nearly $70,000 in 2020-2021, it plummeted, and this time, following a new high, it quickly retraced, leading to numerous liquidations, making prices hard to predict, with investors facing asset devaluation risks and it being difficult to serve as a reliable medium of exchange.
(II) Regulatory Policy Risks
There are significant and variable differences in regulatory policies among countries. Bitcoin trading is illegal in China, while some countries impose full bans and others cautiously open up, leading to high uncertainty in cross-border transactions and increasing investment risks.
(III) Technological Security Risks
Bitcoin is based on blockchain technology, but hacker attacks are frequent. A report from Slow Mist indicates that there were 121 blockchain security incidents in the first half of 2025, resulting in losses of $2.373 billion, far exceeding the $1.43 billion in the first half of 2024. Assets stored on platforms or wallets are at risk of theft, threatening market stability.
IV. Market Outlook
Market views on future trends vary, but optimism prevails. Vincent Liu, Chief Investment Officer of a cryptocurrency trading company, stated that caution is necessary regarding profit-taking or macro changes that could trigger a correction, but the trend remains bullish. Standard Chartered Bank predicts Bitcoin may break $135,000 in the third quarter and could reach $200,000 by the end of the year.
More companies are incorporating Bitcoin into their reserves, institutional interest is high, and U.S. regulatory legislation is advancing, which may support prices. However, investors need to pay attention to changes in macroeconomic conditions, regulatory policies, and technological security, recognizing high risks and managing risks and asset allocation effectively.
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