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Market inflow dynamics

$BTC 1. Institutional fund inflows remain strong:

• ETF inflows: According to Cointelegraph, as of May 26, the U.S. spot Bitcoin ETF saw a net inflow of approximately $650 million this week, continuing the strong momentum of the past few weeks. BlackRock's iShares Bitcoin Trust (IBIT) saw a single-day inflow peak at $210 million, showing continued institutional demand. The total net inflow for ETFs in May has exceeded $4.3 billion, far surpassing the outflow levels seen during April's lows.

• MicroStrategy increase: Cointelegraph reports that MicroStrategy announced on May 25 that it purchased 3,500 BTC at an average price of $108,500 each, totaling approximately $380 million, raising its holdings to 583,750 BTC, valued at about $41 billion. Michael Saylor posted a BTC price chart on X, suggesting further purchases may occur.

• Emerging market participation: Cointelegraph notes that Hong Kong-listed DDC Enterprise continues to advance its plan to purchase 5,000 BTC over three years, most recently acquiring 15 BTC on May 24. Simultaneously, Sweden's H100 AB Group has added 30 BTC through financing supported by Adam Back, bringing its holdings to 200 BTC, indicating rising interest from small and medium-sized enterprises in BTC.

2. On-chain data and market sentiment:

• Increased outflows from exchanges: Latest data from Glassnode shows that approximately 15,000 BTC left major exchanges (like Binance and Coinbase) in the past week, totaling nearly 120,000 BTC for May, reflecting investors' preference for cold storage and long-term holding.

• Realized market cap growth: Bitcoin's realized market cap has increased by approximately $32 billion since early May, currently standing at $1.96 trillion, indicating new funds continuously entering the market. However, retail participation remains low, with Google Trends for 'Bitcoin' search volume at only 30% of its peak in 2021.

• Futures market frenzy: Cointelegraph reports that Bitcoin futures open interest hit a record high of $74.96 billion on May 21, indicating strong bullish sentiment in the market, but high leverage also increases the risk of liquidation.

3. New trends from governments and institutions:

• Government investments: Cointelegraph notes that El Salvador has increased its holdings by 8 BTC over the past week, bringing its total holdings to 5,708 BTC, valued at approximately $620 million, continuing its 'one BTC a day' strategy. Furthermore, the Pakistani government has allocated 2,000 megawatts of electricity to BTC mining and AI infrastructure, attracting the attention of investors from the Middle East and Asia.

• Sovereign wealth funds: Some sovereign wealth funds and state pension funds are increasing their BTC holdings through ETFs, driven by de-dollarization and changes in the energy market. For example, Bitcoin Suisse in Abu Dhabi has been approved to expand its operations in the Middle East, reflecting growing institutional confidence in BTC.

Latest developments in macroeconomic policy

1. U.S. regulation and tariff policies:

• Regulatory optimism: Cointelegraph reports that the U.S. Senate is set to pass stablecoin legislation, expected to provide a clearer regulatory framework for the crypto market, boosting market confidence. Crypto policy advocate David Sacks stated on X, 'The passage of the stablecoin bill and Bitcoin reaching new highs is a dual victory for the crypto industry.'

• Trump's tariff adjustments: Latest news from Yahoo Finance indicates that Trump has announced a delay in imposing a 50% tariff on EU goods until July 9, allowing room for negotiation, but the threat of a 25% tariff on Apple's iPhone still causes market volatility. Bitcoin's price dropped to $108,500 on May 25 before rebounding to $109,800, showing the short-term impact of tariff policies on risk assets.

• U.S. fiscal concerns: Cointelegraph notes that after Moody’s downgraded the U.S. debt rating, market concerns about the long-term stability of the dollar have intensified, enhancing BTC's appeal as an alternative asset. Additionally, Fed Chair Powell's speech and the upcoming FOMC meeting minutes (on May 28) are expected to reinforce high interest rate expectations, potentially exerting short-term pressure on BTC prices.

2. Global currency and policy trends:

• M2 money supply: Cointelegraph's latest analysis shows that the global M2 money supply continues to expand, with a correlation of 0.85 between Bitcoin prices and M2 growth, reinforcing its bullish momentum. The total market value of stablecoins has surpassed $220 billion, providing additional liquidity for BTC.

• International policy support: Brazil has passed new legislation allowing BTC to be used as collateral for loans and exempting mining equipment from tariffs, expected to attract more miners' investments. Pakistan's electricity distribution policy also indicates increased support for BTC mining in emerging markets.

3. Interest rates and economic environment:

• Federal Reserve stance: IG International reports that U.S. long-term Treasury yields have surpassed 5%, a new 18-month high, and the Fed's hawkish policies might limit the upside for risk assets. However, the market expects the probability of rate cuts before the end of 2025 to rise to 40%, potentially providing upward momentum for BTC.

• Global economic uncertainty: Cointelegraph notes that geopolitical tensions and concerns about the U.S. fiscal deficit (expected to reach $2.1 trillion by 2025) are driving investors towards non-traditional assets like BTC. Analyst Geoffrey Kendrick predicts that despite resistance such as Trump's tariffs, BTC could reach $200,000 by the end of the year.

Latest market risks and forecasts

1. Short-term volatility risk:

• CoinDesk reports that on May 26, BTC prices dropped below $109,000, triggering $185 million in long liquidations, highlighting the fragility of highly leveraged markets. Analysts warn that if prices drop below $108,000, further declines to the $105,000 support level could occur.

• Large sell order cancellations on exchanges like Binance suggest potential market manipulation, increasing short-term uncertainty.

2. Long-term price predictions:

• Bullish forecasts: Cointelegraph cites Titan of Crypto's analysis, with BTC's target price for 2025 set between $135,000 and $320,000. BlackRock CEO Larry Fink predicts that if sovereign wealth funds allocate 1% of their assets to BTC, the price could reach $700,000.

• Bearish risks: CoinDesk points out that if the Federal Reserve maintains high interest rates or if the global economy deteriorates further, BTC could pull back below $90,000, necessitating caution against liquidation risks caused by an overheated market. #MicroStrategy"