Behind Bitcoin's Return to Highs: A New Bull Run Dominated by Institutional Capital

In the era where cryptocurrency intersects with artificial intelligence, the truly important stories often hide beneath the surface noise. Recently, Bitcoin price has reached new highs and continues to rise. This wave of increase is significantly different from the past: the influx of large institutional capital is replacing the enthusiasm of retail investors, becoming the main driving force of the market. At the same time, the erosion of confidence in the dollar and the friendly shift in the regulatory environment have together created a "perfect storm" for the development of Bitcoin.

Market Performance Overview

Bitcoin price has broken through historical highs and continues to rise, with this round of increase mainly driven by institutional capital rather than retail investors. At the same time, the US stock market is also showing strong momentum, with both the Nasdaq and S&P 500 indices reaching historical new highs, and the Dow Jones Industrial Average also nearing its peak, indicating a significant increase in overall market risk appetite.

Changes in the Policy Environment

The "Too Big to Fail Act" recently passed in the United States has expanded fiscal spending and the debt scale, which may weaken the credibility of the dollar in the long term. In fact, the international rating agency Moody's downgraded the credit rating of U.S. Treasury bonds in May. This policy backdrop provides a favorable environment for alternative assets such as Bitcoin.

Characteristics of the Current Bull Run

Compared to previous speculative cycles, the current rise of Bitcoin is considered to be more sustainable. This is mainly attributed to the holdings of Bitcoin on corporate balance sheets and the supportive regulatory environment. However, the market may still face corrections, and the key lies in whether institutional investors can form effective price support.

Trend of Enterprises Holding Bitcoin

An increasing number of companies are starting to incorporate Bitcoin into their asset portfolios. For example, the software company Figma has invested about 5% of its balance sheet in Bitcoin. The motivations for companies holding Bitcoin vary, including asset diversification, appreciation potential, and brand differentiation. However, it is important to note that Bitcoin is not suitable for all companies, and businesses need to carefully consider their own risk tolerance and strategic objectives when making this decision.

Bitcoin's Dual Attributes

Bitcoin exhibits unique hybrid characteristics. When market risk appetite rises, it behaves similarly to tech stocks; during times of crisis (such as the recent trade disputes), it displays safe-haven properties akin to gold. This duality is both an advantage for Bitcoin and could also become a potential weakness.

Potential Risk Factors

Despite the current optimistic market sentiment, there are still some potential risks:

1. The Federal Reserve may unexpectedly raise interest rates (reportedly, a well-known bank CEO believes this possibility is between 40-50%)
2. Regulatory policies may suddenly tighten.
3. The occurrence of geopolitical "black swan" events

Currently, these risk factors have not had a substantial impact on the market, and funds continue to flow into the cryptocurrency market.

Large-scale Influx of Institutional Capital

Recently, institutional capital has flowed into the Bitcoin market on a large scale:

• In June, over 250 companies announced increased holdings of Bitcoin, purchasing a total of 68,000 Bitcoins.
• Last week, 54 institutions added 8,434 Bitcoins to their holdings, including design software giant Figma (which holds a Bitcoin ETF worth $70 million and plans to purchase an additional $30 million).
• From July 6 to July 11, the net inflow of funds into Bitcoin ETFs reached $1.6 billion, with a single-day inflow of $1.18 billion on July 10, setting a historical second-high.

Macroeconomic Positive Factors

1. Dollar trust crisis: Fiscal expansion has intensified inflation concerns, prompting investors to turn to scarce assets. Bitcoin has a fixed total supply of 21 million coins, and its scarcity even exceeds that of gold.
2. Risk easing: Global geopolitical conflicts have cooled somewhat, and inflation data in Europe and the United States has also shown unexpectedly mild signs.

The regulatory environment turns friendly

1. U.S. "Crypto Week": The House will review key legislation this week concerning stablecoin frameworks and market structures.
2. Regulatory Personnel Changes: A former executive of a cryptocurrency company has been appointed as the head of the Office of the Comptroller of the Currency (OCC), indicating that policies may become more lenient.

These factors have collectively propelled the strong performance of Bitcoin, shaping a new bull run environment dominated by institutions and characterized by regulatory friendliness. However, investors still need to remain vigilant of potential risks and maintain rational judgment.