Behind the Bitcoin All-Time High: Dual Driving Forces of Liquidity Easing and Institutional Get on Board

The price of Bitcoin recently broke through the $112,000 mark, setting a new historical high. Behind this surge, there are mainly three driving factors: the continued weakening of the dollar, abundant global liquidity, and accelerated institutional capital getting on board. This article will review recent market dynamics, analyze the impact of geopolitical situations and economic data on risk assets, and discuss Bitcoin's unique performance in this rebound and its future direction.

June Market Review

In June 2025, the market is shrouded in the gloom of trade uncertainty, geopolitical conflicts, and complex economic data. However, despite the harsh macro environment, risk assets are generally showing a rebound trend. The U.S. stock market has risen across the board, with both the Nasdaq 100 index and the S&P 500 index reaching all-time highs. Bitcoin briefly fell below the $100,000 mark in the middle of the month but then surged back strongly, with a monthly increase of 2.84%. In contrast, the overall cryptocurrency market dropped by 2.03%, with Ethereum experiencing increased volatility and underperforming other major assets, recording a decline of 2.41%.

At the beginning of the month, the overall market leaned towards optimism, with investors interpreting macro data and geopolitical situations positively. Although the US-China trade relationship was once tense, it eased after a call between the leaders of the two countries. The manufacturing PMI in China fell to a nearly three-year low, and the OECD further downgraded its global economic growth forecast. US economic data was mixed: non-farm payroll data exceeded expectations, the unemployment rate remained stable, and initial jobless claims unexpectedly decreased, but retail sales showed a decline. The June CPI fell below expectations again, reinforcing the view of cooling inflation. The Federal Reserve maintained interest rates for the fourth consecutive time at the June FOMC meeting, stating that clearer signals of inflation and the job market are needed.

The crypto market experienced several short-term shocks in June, including public debates by political figures regarding tax policies and a brief escalation in geopolitical tensions. In the last two weeks of the month, with improved market sentiment and increased institutional participation, Bitcoin saw a rebound. In June, the net inflow into Bitcoin ETFs exceeded $4 billion. Ethereum, on the other hand, faced greater volatility and deeper corrections, with the specific reasons still unclear. Meanwhile, crypto treasury strategies gained attention, as multiple companies began expanding their holdings into non-Bitcoin assets, indicating an increased acceptance of this strategy in the market.

Geopolitics became the focus in late June. The Middle East conflict that broke out in mid-month attracted global attention. Although the situation was once tense, a ceasefire agreement was reached through diplomatic mediation, alleviating short-term panic in the market. The crypto market gradually recovered after the ceasefire, while traditional safe-haven assets like gold and crude oil retreated, reflecting a reduction in market concerns over long-term conflict.

Diversified Allocation Beyond Bitcoin

An unexpected trend in 2025 is the rapid adoption of crypto treasury strategies by enterprises, especially as this trend significantly accelerated in June, with the number of related companies nearly doubling. Measured by trading volume, the scale of Bitcoin purchases by crypto treasury companies in June exceeded the total net inflow of 14 billion USD from the US spot Bitcoin ETF for that month, (.

Although Bitcoin and Ethereum still dominate, an increasing number of enterprises are beginning to configure a broader range of crypto assets, such as SOL, BNB, TRX, and HYPE, indicating a strengthening trend of diversification beyond mainstream coins. According to research data, among the 53 confirmed crypto treasury companies, 36 focus on BTC, 5 configure SOL, 3 configure XRP, 2 configure ETH, BNB, and HYPE respectively, and there is one company that configures TRX, FET, as well as a comprehensive altcoin investment portfolio.

This trend is expected to continue, with existing companies continuing to promote this strategy, and the market also showing a strong willingness to provide ample funding and support for multi-asset allocation.

However, the market has begun to question this strategy, especially as some companies are allocating cryptocurrency assets through debt financing, raising concerns about potential leverage risks. Currently, zero-interest or low-interest convertible bonds are commonly used. These bonds allow investors to choose to convert them into company equity if they are "in the money" at maturity. However, if they are "out of the money" at maturity, the company must repay the principal and interest in cash, raising concerns about liquidity and solvency. Some companies even lack sufficient cash to pay interest.

In this case, companies usually have four response options:

1. Selling crypto assets to raise funds may put downward pressure on market prices;
2. Issuing new debt to repay old debt is equivalent to refinancing;
3. Issuing new shares for financing, used to repay debts or acquire additional assets;
4. If the asset value is insufficient to repay debts, a default may occur.

The path the company ultimately takes will depend on the market conditions at maturity. Generally speaking, the company can only resolve issues through refinancing when the market allows.

In contrast, the method of acquiring crypto assets by issuing stocks carries less risk, as it does not involve debt and does not create a mandatory repayment obligation, making it more easily accepted by the market within the overall risk structure.

According to the analysis report from early June, current market concerns about the leverage structure may have been amplified. Most of the debt issued by Bitcoin treasury companies will mature between June 2027 and September 2028. Although the crypto industry has historically faced systemic risks caused by high leverage, this type of debt structure does not currently pose an imminent threat. However, it is worth noting that if more companies adopt this strategy in the future and issue shorter-term debt, the potential risks will gradually accumulate.

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The Stablecoin Industry Reaches a Turning Point

June 2025 will be a key turning point in the stablecoin industry, mainly driven by two significant events: a well-known stablecoin company successfully going public, and the U.S. Senate passing the first comprehensive stablecoin legislation.

As the world's second largest stablecoin issuer, the company became the first native stablecoin company to go public in the United States, with its stock price surging more than six times in June. Despite such a significant increase suggesting that the IPO pricing may have been too low, more importantly, investors' recognition of the future infrastructure role of stablecoins has significantly strengthened.

On June 25, the relevant bill was passed in the Senate by a vote of 68 to 30, marking a breakthrough after months of procedural voting and political maneuvering. The bill has now been handed over to the House of Representatives, where some lawmakers have suggested incorporating it into a broader comprehensive bill. However, the prospects for merging remain uncertain, especially against the backdrop of certain political figures publicly expressing opposition.

Under regulatory pressure, companies' interest in stablecoins continues to heat up. U.S. retail giants are considering issuing their own stablecoins; a certain payment giant is further expanding ecosystem support by integrating stablecoin products from multiple institutions. These companies are not only competing to issue stablecoins but also hope to gain an edge in circulation scale and actual use. The industry's focus has shifted from "Can it be issued?" to "Can it be implemented?" The success of stablecoins will depend on their penetration in real payment scenarios and user coverage.

Internationally, this trend is also gradually spreading. For example, a well-known crypto company has obtained regulatory approval for its stablecoin in the Middle East, and the Bank of Korea is also exploring the issuance of a stablecoin pegged to the Korean won. However, the United States is currently the most advanced in this regard.

Stablecoins are just the starting point. They mark the first phase of bringing traditional fiat currency into the blockchain, achieving the deployment of an all-weather, fast interoperable infrastructure. The focus of the next phase is the introduction of on-chain financial assets, starting with stock tokenization.

A certain American brokerage has recently launched tokenized trading of 200 listed stocks for users in Europe, becoming a pilot platform to test user demand and execution quality. Another cryptocurrency exchange is also seeking corresponding regulatory licenses in the United States to promote similar products. These early attempts pave the way for more traditional financial products to be brought on-chain, and it is expected that the next steps will cover asset classes such as private credit and structured funds.

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The impact of geopolitical conflicts on the market is limited

The Middle East conflict that broke out in mid-June 2025 lasted for 12 days. Although it attracted global public attention, its long-term impact on risk assets was limited. In the early stages of the conflict, the cryptocurrency market and stock market responded mildly; however, after a certain country's government airstrikes on related facilities on June 22, the prices of crypto assets fell sharply. With the ceasefire agreement reached, prices quickly rebounded. Although there were still sporadic conflicts at the end of the month, the market as a whole had returned to stability.

During this period, Bitcoin's trend has risen in sync with the US stock market, showing no safe-haven attributes. Compared to its performance in April and May, when Bitcoin was seen as a store of value asset due to trade tariffs and global bond market tensions, this time it leans more towards risk asset logic. Bitcoin outperformed gold and the overall crypto market, partly due to strong institutional support, including monthly ETF inflows reaching 4 billion USD, continuous purchases by treasury companies, and signs of sovereign buying, indicating that the impact of geopolitical shocks on Bitcoin is relatively short-lived.

This conflict has also sparked renewed attention in the market towards the cryptocurrency infrastructure in the relevant region, particularly the Bitcoin mining industry. It is estimated that about 4.5% of global Bitcoin mining occurs in this area, primarily relying on low-cost government-subsidized electricity. During the Bitcoin bull market, this structure yields substantial profits.

After the airstrikes, there are rumors that some mining farms have been damaged, leading to a decline in network hash rate. However, short-term fluctuations in hash rate are often more likely caused by block time differences or data noise, and there is currently no clear evidence to suggest that this conflict has caused systemic damage to mining facilities. Another possible explanation is that the heat wave in the East Coast and Midwest has forced miners to temporarily reduce production.

In addition to infrastructure, this conflict has also sparked discussions about the role of cryptocurrency in the financial systems of the relevant regions. For a long time, high inflation, international sanctions, and the unstable exchange rate of the dollar have prompted local communities and the gray economy to adopt cryptocurrencies extensively.

Past data shows that during similar conflicts, there has been a significant increase in the outflow of cryptocurrency assets from the relevant regions.

Bitcoin and Tron have traditionally been the main blockchain networks used in the region, especially Tron for USDT stablecoin transfers. However, in this round of conflict, the on-chain stablecoin trading and settlement volume did not see a significant increase, indicating that the overall cryptocurrency usage pattern has not changed due to the war, and the on-chain activity of short-term holders has actually declined.

Although there are no significant anomalies in on-chain data, the cryptocurrency industry has emerged symbolically during this conflict: the largest cryptocurrency exchange in a certain region suffered a $90 million hack during the hostilities, with the attackers being an organization supporting the opposing side, leaving messages of dissent through wallet addresses. This exchange has previously been linked to the flow of funds related to relevant entities, and this attack seems more like a form of cyber psychological warfare rather than a profit-driven attack.

For countries facing long-term economic difficulties and sanctions, crypto assets indeed play an important role in cross-border capital flows. The political and network dimensions exhibited during this round of conflict further indicate that crypto has become part of the financial systems of certain countries.

Key variables in July will influence macro and market trends

As we enter July 2025, the core focus of the market will concentrate on several key events and macro indicators that may have a significant impact on asset pricing and the overall environment.

A certain country's leader signed a new bill on July 4th, which may significantly expand the fiscal deficit that is already above expectations. According to the latest economic data, the country's fiscal spending continues to exceed revenue levels.

Inflation pressure remains a core consideration, but recent data shows that inflation has eased. The core Personal Consumption Expenditures ) PCE ( index is on a downward trend, with only a single month of increase recorded in February 2025, and the increase may mainly stem from prior tariffs.