The market has been rising since April, continuously charging upward; however, very few people were on board at the true bottom, while too many think there is significant risk at Bitcoin's current position.

Of course, many people wonder why there hasn't been an interest rate cut and no speculative expectations, yet the crypto market or the entire financial market has begun to rebound and reverse.

Based on this issue, some say that the expectation of Trump's increased tariffs has been broken, allowing enough time for the market to rebound from overselling. But here comes the question: even if the expectation of tariffs diminishes, why can Bitcoin break its previous high directly? What other reasons continue to drive Bitcoin's increase? How much longer can Bitcoin's rise and the subsequent increase be maintained?

1. The core logic behind the rebound of U.S. stocks and the crypto market:

1. Expectations of a 'soft landing' for tariff policies.
Trump announced the 'reciprocal tariffs' policy on April 2, 2025, initially triggering panic in global markets (the three major U.S. stock indices dropped over 2% in a single day, and Bitcoin fell to $82,500 at one point). However, subsequent policy details revealed that some tariffs would not take effect immediately but would establish a 'negotiation window' (for example, baseline tariffs effective April 5 and additional tariffs effective April 9). This strategy of 'threat outweighs substance' was interpreted by the market as a 'negotiation chip,' with investors betting that trade frictions could ease through negotiations, leading to a recovery in risk preference.

For example: 2. U.S. stock rebound: During the policy buffering period on April 5, the Dow rebounded 1.14%, with tech stocks (like Tesla and Nvidia) leading the way, as the market believed the actual impact of tariffs might be lower than expected.

3. Interconnection in the crypto market: Bitcoin rebounded from $82,500 to $88,000, while Ethereum returned above $2,100, forming a short-term positive correlation with U.S. stocks (the Nasdaq and Bitcoin correlation reached 0.5).

4. Liquidity support for the Fed's interest rate cut expectations.
Although tariff policies have elevated inflation pressures, U.S. economic data (such as the March consumer confidence index falling to a four-year low) indicates recession risks, and the market has rekindled expectations of three interest rate cuts by the Fed this year (totaling 75 basis points).

5. U.S. stock valuation repair: Tech stocks, being sensitive to interest rates, benefit from declining discount rates under expectations of interest rate cuts, leading to a rebound in stock prices.

6. 'Interest rate cut trades' in the crypto market: Bitcoin, as 'digital gold,' is linked to expectations of liquidity easing; after the Fed's April 10 meeting minutes released dovish signals, Bitcoin briefly rebounded to $77,930.

7. Negative news fully priced in and technical recovery.
The market had partially digested the tariff impact by early April, and technical overselling triggered short covering.

8. Short covering in U.S. stocks: The S&P 500 index rebounded 4.2% from April 5 to 10, as some hedge funds closed short positions.

9. Relief from leverage liquidation in the crypto market: Bitcoin derivatives open interest has fallen from historical highs, avoiding further 'long liquidation' cascades, and prices have stabilized.

If the Fed delays interest rate cuts due to inflation stickiness, or if Trump adds tariffs (such as in the chip sector), risk assets may come under pressure again, while Trump has begun imposing tariffs on Europe, and the problems currently faced by U.S. debt are even greater. Will crypto and other risk assets continue to rise? How long can this market maintain its upward momentum?

2. Bitcoin's breaking of high points while the main players have not exited, gold continues to charge forward—what are the reasons for the market being filled with risk-averse demands?

Before considering risk assets like Bitcoin, it is essential to clarify the core logic of the dollar and debt. Where is the capital coming from that is allowing Bitcoin, gold, and U.S. stocks to maintain their upward momentum? How long can this expectation be sustained?

1. Trump's tax cut policy may add $3-5 trillion in debt, shaking market confidence in dollar credit; most funds have chosen to diversify risks into the currently hot stock market, gold, or Bitcoin, with some going into the more stable yen.

2. The 50% tariff increase on the EU triggered capital outflows, and Eurozone countermeasures threaten the dollar settlement system.

3. Dollar depreciation pushes up commodity prices priced in dollars, exacerbating imported inflation in the U.S., and weakening the Fed's policy space. 4. Credit collapse, rating agencies downgrade U.S. sovereign credit ratings, accelerating the global sell-off, with foreign holdings of U.S. debt falling from 50% to 30%; U.S. debt yields soar, raising global financing costs, while other central banks continue to choose more stable gold or other safe-haven assets due to risk.

3. The core driving force behind Bitcoin breaking previous highs: the resonance of the U.S. debt-dollar credit crisis. So, has a part of this safe-haven asset or outflowing funds flowed into Bitcoin? The likelihood of this is very high, as since the stablecoin legislation came out, the crypto market has seen a resurgence. Because the stablecoin legislation can provide a new reservoir for the currently unstable U.S. debt system, and it is highly likely to continue maintaining the existence of dollar hegemony.

1. Imbalance in supply and demand for U.S. debt and liquidity traps.
The scale of U.S. government bonds has reached $36 trillion, accounting for over 120% of GDP, while the proportion held overseas has dropped from 50% to 30%. The frequency of short-term government bonds being rolled over has risen to 84.5%, leading to a surge in refinancing pressure. In April 2025, U.S. debt auctions may encounter cold demand (the bid-to-cover ratio for 20-year bonds hit a historical low), indicating a structural shrinkage in demand, accelerating the collapse of market confidence in U.S. debt. Against this backdrop, investors are turning to Bitcoin as a 'decentralized credit hedge tool,' with its price breaking the historical high of $110,000, becoming a core target for safe-haven funds alongside gold.

2. The 'double-edged sword' effect of fissures in dollar hegemony and stablecoin legislation.
Trump’s tariff policy (such as a 50% tariff increase on the EU) has caused the dollar index to drop to 97.92 points, hitting a new low since 2022, exacerbating capital outflows. Meanwhile, the GENIUS Act is pushing for the expansion of stablecoin scale (expected to reach $2 trillion by 2028), requiring reserve assets to primarily consist of short-term U.S. debt, indirectly providing liquidity support for U.S. debt, but this also accelerates the penetration of dollar credit into the crypto market, with Bitcoin becoming a value storage option outside the dollar system due to its 'decentralized attributes.'

3. Policy expectation gaming and liquidity illusion.
Although the Fed's interest rate cut expectations have been delayed, the market has already priced in the logic of 'recession forcing easing.' The U.S. GDP decreased by 0.3% quarter-on-quarter in the first quarter, and the consumer confidence index fell to a four-year low, compounded by inflation stickiness driven by tariffs (Michigan University’s 5-year inflation expectation rose to 4.4%), creating a 'stagflation trade' environment, which greatly enhances Bitcoin's appeal as an anti-inflation asset.

4. Potential triggers for market reversal: Deepening U.S. debt crisis and policy backlash.

1. The 'death spiral' of U.S. debt liquidity crisis.
If the 30-year U.S. debt yield exceeds 5.5%, it may trigger the following chain reactions:

2. Uncontrolled debt interest burden: U.S. debt interest expenditure is expected to reach $882 billion in 2024, and if interest rates continue to rise, interest expenditure may account for 9% of GDP by 2035, squeezing fiscal space.

3. Domestic institutional absorption at the limit: The share of U.S. mutual funds and individual investors has risen to 23.7%, with trading capital dominating the market, increasing volatility; once selling starts, it will trigger a stampede.

4. The 'butterfly effect' of Japan selling U.S. debt: Japan has reduced its U.S. debt holdings by $50.4 billion and intervened in the foreign exchange market; if continued selling occurs, it may prompt other sovereign funds to follow suit, potentially triggering a U.S. debt liquidity crisis by Q3 2025.

5. The 'credit tipping point' of the dollar system.
The dollar's share in global foreign exchange reserves has fallen to 57.8% (the lowest since 1994), while gold, the renminbi, and digital currencies (such as digital renminbi) are accelerating their replacement. If the U.S. cannot solve its fiscal deficit (expected to reach $1.8 trillion by 2025) and political polarization issues, the collapse of dollar credit will push Bitcoin to break through $150,000.

6. Internal risks in the crypto market: Regulation and leverage liquidation.
Bitcoin ETFs saw inflows exceeding $40 billion in a single week, but the open interest in derivatives remains high; if the Fed raises interest rates beyond expectations or Trump adds tariffs (such as in the chip sector), it may trigger liquidation of leveraged funds, leading to a short-term correction of 10%-15%.

5. Future path projections: Deepening crisis or policy rescue?

1. Short-term (Q3-Q4 2025): Bitcoin surges amid a deepening crisis; U.S. debt auctions continue to meet cold demand: $6.5 trillion in U.S. debt will mature in June, and if demand is weak, the 30-year yield may breach 5.5%, pushing Bitcoin to test $120,000-$130,000. Strengthening correlation between gold and Bitcoin: The target price for spot gold is $3,500, and the correlation between Bitcoin and gold has risen to 0.6, forming a 'digital + physical' dual safe-haven pattern.

2. Mid-term (2026): Policy rescue and market differentiation. The Fed is forced to cut interest rates: If the U.S. falls into recession (65% probability), the Fed may cut rates by 75 basis points, with liquidity easing supporting Bitcoin's surge to $150,000, but the risk of 'rescue falling short of expectations' must be heeded. The siphoning effect of the stablecoin legislation: After the implementation of the GENIUS Act, the annual bond purchase scale of stablecoins may reach $400 billion, providing short-term support for U.S. debt but strengthening the digital hegemony of the dollar in the long run, with Bitcoin potentially benefiting from 'compliance premiums.'

3. Long-term reversal conditions: Global monetary system reconstruction and the disintegration of dollar hegemony: If the dollar's reserve share falls below 50%, Bitcoin may become a new anchor asset alongside gold, targeting a price of $200,000. Failure of a soft landing for the U.S. debt crisis: If the U.S. government cannot reduce the deficit (CBO predicts that debt/GDP will reach 156% by 2055), credit collapse will force the market to completely abandon dollar assets, with Bitcoin becoming the ultimate safe-haven choice.

Conclusion: The current rise of Bitcoin driven by the crisis is essentially a triple resonance of 'dollar credit crisis + U.S. debt liquidity trap + global de-dollarization,' rather than merely expectations of interest rate cuts or tariff easing.

The key signals for a market reversal include:

U.S. debt yields peaking: If the 30-year yield falls below 4.5%, it marks a sign of crisis alleviation.

The dollar index stabilizing and rebounding: Breaking through 105 may signal capital returning to the dollar system.

Geopolitical risk abatement: If U.S.-China tariff negotiations reach an agreement or the situation in the Middle East eases, a shift in risk preference may suppress Bitcoin at 6710.

Personal investment advice:

Short-term: Hold a Bitcoin + gold combination (ratio 7:3) to hedge against U.S. debt volatility.

Mid-term: Focus on the Fed's policy shift and the progress of the GENIUS Act, increasing allocation during corrections.

Long-term: Beware of a 'Minsky moment' in U.S. debt; allocate physical assets and decentralized finance (DeFi) targets.