Crypto Takes a Hit, But Liquidity Shift Could Spark Rebound, Says Analyst

Bitcoin dropped 3.2% over the past 24 hours, dragging the broader crypto market down with it and triggering $1.15 billion in liquidations across crypto futures. Ethereum and Solana were hit even harder, each falling 9%, with Bitcoin dipping below $104,000 for the first time in a week.

Despite the downturn, Han Xu, CEO of Hashkey, believes this marks a mid-phase in the ongoing bull cycle. Speaking to FXStreet, Han pointed to a shift in macroeconomic policy as a potential catalyst for a rebound — namely, the end of quantitative tightening (QT), rising M2 money supply, and a possible easing of the Supplementary Leverage Ratio (SLR) for banks.

These changes could boost market liquidity and drive more interest in risk assets like crypto. Han also emphasized Bitcoin’s unique monetary properties, calling it “inelastic like gold, but with stricter constraints,” due to its capped supply of 21 million BTC and the halving mechanism that slows its issuance every four years.

Han’s long-term view? Bitcoin could eventually match the market cap of tradable gold — estimated at $5.6 trillion — over the next decade. That would put BTC on a path to hit $1 million per coin, a prediction he says is grounded in monetary theory and historical patterns.

Supporting the bullish case are strong inflows into U.S. spot Bitcoin ETFs, which have amassed $45.31 billion since launch, according to SoSoValue. Meanwhile, corporate giants like Strategy (formerly MicroStrategy) have helped drive Bitcoin treasury holdings to $85.2 billion, per BitcoinTreasuries.

Han notes that gold saw a 30% annual growth rate during the stagflationary 1970s, and sees a similar environment potentially boosting Bitcoin's future valuation.