The subsequent development of Bitcoin will exhibit a dual characteristic of 'animal coin retreat' and 'institutional acceleration'. The current animal coin market is undergoing structural adjustments: PEPE token trading volume has decreased by 37% from its peak, whale holdings have dropped to historic lows, while the daily transaction volume of leading animal coins like Dogecoin and Shiba Inu has shrunk to below $500 million, a decrease of 85% compared to the bull market period in 2024. This phenomenon of capital withdrawal starkly contrasts with Bitcoin — in the week of March 25, Bitcoin funds saw a net inflow of $724 million, ending a trend of five consecutive weeks of outflow, while the average value of large on-chain transfers broke through $129,000, approaching the peak of the 2017 bull market.
From the perspective of institutional movements, Bitcoin's 'digital gold' attribute continues to strengthen. Strategy Company has recently increased its Bitcoin holdings to 499,000, with an average holding cost of $66,000, setting a record for a single institutional entity's holdings; sovereign nations like Brazil and Russia are accelerating their crypto reserves, with Brazil planning to convert 5% of its foreign exchange reserves into Bitcoin, a policy that could release over $30 billion in incremental funds. On the technical front, the Bitcoin ecosystem is breaking through traditional limitations: Layer 2 protocols like BitLayer have attracted over 500 developer projects, pushing the daily minting volume of BRC-20 tokens back up to 200,000, and after the Ordinals protocol's optimization proposal was passed, the number of on-chain NFT transactions increased by 127% month-on-month.
Risks and opportunities coexist in the Federal Reserve's policy cycle. The market expects the probability of a rate cut in May to rise to 18.5%; historical data shows that Bitcoin usually experiences a major upward wave 1-3 months after the initiation of a rate cut cycle, as seen with a 1500% increase within 12 months after the rate cut in March 2020. However, short-term volatility should be watched closely: the high correlation of 0.74 between Bitcoin and U.S. stocks may amplify the risk of a correction, and if it falls below the key support level of $84,000, it could trigger the liquidation of derivative contracts worth approximately $61 billion.
Overall, Bitcoin is benefiting from the 'animal coin siphoning effect', with institutional holdings, sovereign reserves, and technological innovation forming a triple support. Investors should pay close attention to two major signals: first, the continued migration of the animal coin capital pool towards Bitcoin (currently, Bitcoin's share of the total crypto market cap has rebounded to 41.7%); second, the inflow intensity of compliant financial instruments (such as spot ETFs) after the Federal Reserve's rate cut. In this market reconstruction of 'de-speculation', Bitcoin's value anchoring effect will further stand out.
