The market capitalization of Ethereum has surged by $150 billion since July 1, accompanied by one of the largest short squeezes in history, with net short positions reaching all-time highs, causing Ethereum prices to rise by 70% in less than a month.
Ethereum is making history:
We are witnessing one of the largest short squeezes in cryptocurrency history. Since July 1, Ethereum's market capitalization has surged by $150 billion—just days ago, net short positions had just set a historical high.
What exactly happened? This article will explain it for you.
Please see the chart below:
According to Zerohedge data, as we entered July, Ethereum's net leveraged short position reached a historical peak. In fact, the net short exposure is about 25% higher than the level in February 2025. This directly led to Ethereum soaring 70% in less than a month.
But the story is far from over.
President Trump's World Liberty Financial has been increasing its holdings of Ethereum. The latest trading records show that just 24 hours ago, the firm completed a purchase of $5 million. This adds fuel to an already fierce short squeeze.
It is worth noting that these short positions mostly come from institutional capital.
What’s even more intriguing is:
Zerohedge reports that in the 30 days leading up to July 1, BlackRock's ETF increased its holdings of Ethereum for 29 days. But as mentioned earlier, due to the sudden surge in leveraged short exposure, prices continued to decline. Clearly, some 'smart money' anticipated this storm.
We are now witnessing: billions of dollars in short positions being liquidated in succession. If Ethereum rises another 10%, another $1 billion in short positions will be liquidated.
Moreover, as most of these short positions are leveraged, the market is facing stronger short-squeeze pressure.
Ethereum may soon reach $4,000.
We have also observed a similar effect with Ripple, while Bitcoin continues to show relative strength. Bitcoin has officially returned to the $120,000 mark, adding $900 billion to its market cap since the April low. After months of stagnation, both Ethereum and Ripple have finally started to catch up with Bitcoin's gains.
We anticipated this trend in advance. Here are some of the early warnings we provided to senior members: We bought in batches at $80,000, $90,000, and $100,000, and accurately predicted a target of $115,000. Last week, we raised our target to $120,000+, and that target has just been achieved.
More importantly, the market is digesting the heavyweight report released by FT today. President Trump is expected to sign an executive order this week allowing 401k pension plans to invest in cryptocurrency. This will become one of the most milestone benefits in crypto history.
As of the first quarter of 2025, the size of U.S. 401k pensions has reached $8.7 trillion. Meanwhile, the current total market capitalization of cryptocurrency is only $3.8 trillion. This means that an amount equivalent to 2.3 times the entire crypto market is about to gain entry. This is epoch-making.
More importantly, the U.S. House of Representatives has passed three important Bitcoin and cryptocurrency bills: (Clarity Act), (Genius Act), and (Anti-CBDC Act).
The biggest victory for the cryptocurrency industry is the bipartisan support it has gained. Candidates who refuse to accept cryptocurrency can no longer win elections.
As we have always emphasized: institutional capital can no longer ignore cryptocurrency. Over the past 13 years, Bitcoin's annual compounded growth rate has reached +90%, outperforming almost all global assets.
We continue to receive feedback from institutional investors that their assets under management (AUM) are gradually being allocated to crypto assets.
Looking ahead, the core logic driving the rise of cryptocurrency will trigger significant macroeconomic changes. This is redefining the operational paradigm of financial markets.
Lastly, don't forget the strongest bull market engine for cryptocurrency—the U.S. deficit spending crisis. Not only has Bitcoin risen by 55% since April, but the dollar index has also fallen by 10% this year. The dollar is trapped in a perpetual bear market.
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