Macro interpretation: The recent crypto market is like a roller coaster. After experiencing a "late spring cold snap" in February, the price rebounded from a low of $93,000 to around $99,000. This recovery is not only due to the macro-assistance of easing conflicts, but also foreshadowing of structural changes in the industry. It is interesting to note that when the market focuses on price fluctuations, the participants in the Bitcoin ecosystem have already quietly staged a "transformation".
The miners took the lead in the transformation and breakthrough. VanEck's latest report revealed that US listed mining companies are accelerating their penetration into the fields of mining and high-performance computing. Companies such as Cipher Mining and Iris Energy have begun to allocate 20-30% of their electricity capacity to non-mining businesses. This strategy of "not putting all your eggs in one basket" stems from the uncertainty of transaction fee income on the Bitcoin chain. Although the ETF craze has allowed miners to taste the sweetness of a short-term surge in handling fees, the rise of off-chain solutions such as the Lightning Network and centralized exchanges is shaking the foundation of the traditional mining model. An analyst joked: "The roar of the mining machine hides the whispers of the AI chip."
The fracture of the market structure is becoming increasingly evident in the flow of funds. The data showing a net outflow of $364.77 million for US spot Bitcoin on February 21 is like a bucket of cold water extinguishing some investors' enthusiasm. However, there may be hidden secrets behind this: CryptoQuant CEO Ki Young Ju pointed out that the trading volume of altcoins has surged to 2.7 times that of BTC, and stablecoin holders are flocking into the altcoin market. This 'openly maintaining the platform while secretly advancing' tactic has overturned the traditional understanding of market cycles defined by BTC's market share. As a Wall Street veteran put it: "When everyone is focused on the main stage, the real performance often takes place backstage."
Strategic players are planning a higher-dimensional game. MicroStrategy founder Michael Saylor's 'National Bitcoin Reserve Plan,' proposed at the Conservative Political Action Conference, is arguably the boldest financial proposal of the year. He suggested that the US government spend $39.2 billion to acquire 4 million BTC (about 20% of the circulating supply), a scale that makes the $29 billion valuation of the existing 395 million barrels of strategic oil reserves look insignificant. Although this idea has been viewed by some economists as a 'crypto utopia,' the game theory logic contained within is intriguing—if sovereign funds really enter the market in large numbers, Bitcoin may leap from 'digital gold' to 'strategic deterrent asset.'
However, movements in Washington cast a shadow over this crypto feast. Economist Wang Fuzhong warned that the Trump family's recent aggressive actions in the cryptocurrency space, from issuing coins to promoting the 'crypto capital of the world,' seem lively but actually harbor risks. If the former president, known for his 'art of the deal,' were to truly incorporate Bitcoin into the strategic reserve, it might lead to an absurd drama between decentralization ideals and centralized power. As a joke within the crypto community goes: 'When politicians start to love blockchain, the ideal of code autonomy is not far from bankruptcy.'
In this multi-party struggle, the market has shown remarkable resilience. Despite short-term disturbances caused by ETF capital outflows and regulatory uncertainties, the diversification transformation of mining companies has objectively enhanced the industry's risk resistance capabilities. It is worth noting that miners transitioning to AI may be inadvertently building the infrastructure for the integration of Web3 and AI, which is historically more significant than mere price fluctuations. As one anonymous miner humorously remarked on Twitter: "With one hand we mine Bitcoin, and with the other we train large models, humanity's future relies on these graphics cards."
Looking ahead to the market, the crypto market may exhibit a pattern of 'ice and fire.' The psychological pressure and technical resistance Bitcoin faces at the $100,000 mark should not be underestimated, but the restructuring of computing power brought about by mining companies' transformations, long-term layouts by institutional investors, and possible experiments with tokenized government bonds are all accumulating energy for the next cycle. Meanwhile, the activity in the altcoin market resembles secondary succession in tropical rainforests—when Bitcoin, the 'top community,' temporarily halts its expansion, various innovative protocols seize the opportunity to grow wildly. In this endless evolutionary game, the only certainty is that once the Pandora's box of blockchain is opened, it is hard to close again.
LTC data analysis:
Coinank data shows that, driven by ETF speculation, Litecoin's daily trading volume reached $9.6 billion. Previously, Bloomberg ETF analysts indicated that the likelihood of a spot Litecoin ETF being approved by the end of the year is 90%.
We believe that Litecoin's recent surge in trading volume to $9.6 billion is closely related to expectations of the spot ETF approval. Bloomberg analyst Eric Balchunas's team has repeatedly emphasized that the probability of the Litecoin ETF being approved by the end of 2025 is as high as 90%, primarily based on its similar proof-of-work (PoW) mechanism and commodity attribute positioning, which may reduce regulatory resistance from the SEC. Additionally, the initiation of the SEC's public comment process and the new acting chairman's open attitude towards crypto products further bolster market confidence.
The potential impact of ETF approval on Litecoin can be analyzed from three aspects:
Short-term market sentiment driven: The current surge in trading volume reflects investors' early positioning in anticipation of the ETF's benefits, similar to the influx of funds prior to the approval of the Bitcoin ETF. Historical data shows that although there is often profit-taking shortly after the Bitcoin ETF approval, long-term capital inflows are significant, and Litecoin may replicate this path.
Price elasticity space: Litecoin's market capitalization is relatively small (about $18 billion), and if its ETF capital inflow reaches 30% of Bitcoin's, its price could see several-fold increases. However, it is important to note that it needs to maintain the key support level of $60-70 to sustain an upward trend.
Regulatory and market risks: Although the probability of approval is high, the SEC's definitions of 'securities' and 'commodities' have not yet been fully clarified, and the Litecoin ETF still needs to pass the 19b-4 and S-1 form reviews. Additionally, if the actual capital inflow after the ETF is launched falls short of expectations, it may trigger a price correction.
In the long term, if the Litecoin ETF is successfully approved, it will accelerate institutional capital entry and enhance its application scenarios in payment and value storage. However, the cryptocurrency market is still influenced by macro policies (such as Federal Reserve interest rate cuts) and Bitcoin's price movement, requiring investors to balance short-term speculation with long-term value logic.
