Yesterday, Bitcoin just surged to a historical high of $124,500, only to plummet shortly after, with a daily drop of 4.24%, reaching a low of $117,000, with intraday fluctuations of nearly $7,000. However, such short-term violent adjustments do not mean the end of the bull market; from multiple dimensions, its long-term value logic continues.
First of all, the underlying scarcity of Bitcoin is irreplaceable. With a fixed total supply of 21 million coins, it inherently possesses anti-inflation properties. Currently, gold accounts for 12.5% of global central bank foreign exchange reserves, while Bitcoin's allocation ratio is still less than 0.1%, leaving significant room for institutional capital to enter in the future.
In addition to scarcity, the continuous evolution of the technical ecosystem also lays the foundation for long-term value. Layer 2 scaling technologies like the Lightning Network have reduced transaction costs by over 90%, and the booming development of DeFi and NFT ecosystems has further indirectly enhanced Bitcoin's liquidity and application scenarios.
Despite short-term volatility at the regulatory level, the long-term trend towards compliance is clear. The EU (Markets in Crypto-Assets Regulation) (MiCA) has clearly classified Bitcoin as a commodity. Although the SEC's review of spot ETFs has suppressed short-term sentiment, ETFs managed by institutions like BlackRock and Fidelity, totaling over $30 billion, have entered the compliance sprint phase, and the door to compliance is opening.
From the perspective of the halving cycle, the rhythm of Bitcoin's bull and bear markets has always been clear. Historical data shows that 12-18 months after a halving, a major upward wave often follows—after the 2012 halving, the increase exceeded 8000%, and after the 2020 halving, the increase reached 725%. After the 2024 halving, its inflation rate has dropped to 0.78% (lower than gold's 1.5%-2%). According to the cycle, the peak of this bull market is expected around October 2025.
On-chain data also reveals positive signals: if the net inflow to exchanges remains negative (Bitcoin flowing out of exchanges), it often indicates that investors prefer to hold for the long term; whale movements are also crucial to watch, as selling more than 5,000 in a single day could trigger short-term panic, but current market selling pressure has not reached extreme levels.
Policy and institutional movements are also worth anticipating. The Trump administration has allowed 401(k) pension plans to allocate Bitcoin, and the entry of over $7.3 trillion in funds will reshape pricing logic; the Harvard endowment fund increased its holdings in Bitcoin ETFs by $116.7 million in the second quarter of 2025, and asset management giants like BlackRock and Vanguard are also continuously increasing their positions, indicating a clear trend of institutional entry.
From a technical perspective, after Bitcoin broke through $100,000 in May, it successfully turned that level into strong support. The MACD indicator's 'golden cross' shows that bullish momentum is still dominant. After breaking through $120,000, the Fibonacci extension points to a range of $135,000 to $150,000, with institutions like Citibank and Standard Chartered providing target prices of $135,000 to $200,000 by the end of 2025.
The health of the industry ecosystem is also improving. Although miner income fell by 70% after the 2024 halving, daily average income had rebounded to $30 million by July 2025, indicating that the industry is gradually adapting to the new economic model; the amount of Bitcoin sold by miners only accounted for 18% of the daily trading volume, showing their confidence in long-term prices. Currently, the government, ETFs, and listed companies hold a total of 6.1 million BTC (accounting for 30.9% of circulation), and concentrated institutional holdings mean limited selling pressure.
In terms of investment returns, weekly investing $10 in Bitcoin over the past 5 years has yielded a total return of 202%, significantly outperforming gold (34%) and the S&P 500 (79%). Short-term volatility may be alarming, but the long-term value logic continues.
