Bitcoin Breaks New High of $112,000: Driven by Weak Dollar and Institutional Capital Inflow

The price of Bitcoin broke through $112,000 in the early hours of today, setting a new historical high. Behind this surge are multiple factors including the continued weakening of the US dollar, abundant global liquidity, and the accelerated entry of institutional capital. This article will review the market dynamics since June, analyze the impact of geopolitical conflicts and economic data on risk assets, and explore Bitcoin's unique performance in this round of rebound and its future direction.

June Market Review

In June 2025, the market is shrouded in trade uncertainty, geopolitical conflicts, and complex economic data. Despite the severe macro environment, risk assets generally rebounded. U.S. stocks rose across the board, with both the Nasdaq 100 and the S&P 500 indices reaching all-time highs. Bitcoin, despite briefly falling below $100,000 in the middle of the month, rebounded strongly, posting a monthly increase of 2.84%. In contrast, the overall cryptocurrency market fell by 2.03%, with Ethereum exhibiting high volatility and underperforming other mainstream assets, recording a decline of 2.41%.

At the beginning of the month, the overall market was optimistic, and investors were actively digesting macro data and geopolitical situations. The US-China trade relationship initially became tense again, but eased after a phone call between the leaders of both countries. China's manufacturing PMI fell to the lowest point since 2022, and the OECD lowered its global growth forecast again. US economic data was mixed: non-farm payroll data exceeded expectations, the unemployment rate remained stable, and the number of initial jobless claims unexpectedly decreased, but retail sales showed a decline. June's CPI was again below expectations, reinforcing the view of cooling inflation. The Federal Reserve maintained interest rates unchanged for the fourth time at the June FOMC meeting, stating that it needs to wait for clearer signals regarding inflation and the job market.

The cryptocurrency market experienced several short-term shocks in June, including public disputes among political figures and a brief escalation of geopolitical tensions. After facing pressure in the second-to-last week of June, Bitcoin rebounded as market sentiment improved and institutional participation increased. The total net inflow of Bitcoin ETFs exceeded $4 billion in June. Ethereum, on the other hand, faced higher volatility and deeper corrections, with specific reasons still unclear. Meanwhile, cryptocurrency treasury strategies have garnered significant attention, with several companies beginning to expand their holdings to non-Bitcoin assets such as ETH and SOL, indicating a high level of market recognition for this strategy.

In late June, geopolitical issues became the focus of the market. The regional conflict that broke out on the 13th initially did not provoke a significant market reaction. On the 21st, after the situation escalated, the prices of crypto assets plummeted, while US stocks remained stable. The ceasefire agreement announced on the 24th alleviated short-term panic in the market. Although sporadic conflicts still occurred, the crypto market gradually recovered after the ceasefire, while traditional safe-haven assets like gold and crude oil retreated, reflecting a decreased concern about long-term conflicts.

Key Points for June:

• Crypto Treasury Boom: 53 companies involved in crypto treasury allocation, covering 8 types of crypto assets.
• Demand for stablecoins accelerates: After the relevant legislation is passed, multiple companies are preparing to issue their own stablecoins.
• Geopolitical conflicts: Attract global attention, but have limited impact on risk assets.

Diversification Beyond Bitcoin

An unexpected trend in 2025 is the rapid adoption of crypto treasury strategies by companies, especially accelerating significantly 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 has exceeded the total net inflow of $4 billion for the U.S. spot Bitcoin ETF for that month (.

Although Bitcoin and Ethereum still dominate, an increasing number of companies are beginning to allocate a wider range of crypto assets, such as SOL and BNB, showing an enhanced trend of diversification beyond mainstream coins. Data shows that among the current 53 crypto treasury companies, 36 focus on BTC, 5 allocate SOL, 3 allocate XRP, 2 each allocate ETH and BNB, and there is also 1 that allocates TRX, FET, as well as a comprehensive altcoin investment portfolio.

This trend is expected to continue, as companies continue to drive it forward, and the market shows a strong willingness to provide ample funding and support multi-asset allocations.

However, the market has also expressed skepticism about this strategy, especially as some companies configure cryptocurrency assets through debt financing, raising concerns about potential leverage risks. Currently, zero-interest or low-interest convertible bonds are commonly used. If they are "in the money" at maturity, investors can choose to convert to company equity; if they are "out of the money", 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 cryptocurrency assets for fundraising 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, to repay debts or acquire assets, this method has a lower risk of default.
4. If the asset value is insufficient to repay the debt, a default may occur.

The path the company ultimately takes will depend on the market conditions at the time of maturity. Typically, the company can only address issues through refinancing when the market allows.

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

According to a report on June 4, current market concerns about the leverage structure may be exaggerated. The majority of debt issued by Bitcoin treasury companies will mature between June 2027 and September 2028. Although the crypto industry has previously faced systemic risks caused by high leverage, it currently seems that this type of debt structure does not 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 Welcomes a Turning Point

June 2025 will be a critical turning point for the stablecoin industry, driven primarily by two significant events: a stablecoin issuer successfully going public and the U.S. Senate passing related legislation, marking the first comprehensive stablecoin legislation in U.S. history.

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 soaring 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 transferred to the House of Representatives, where some members have suggested incorporating it into a broader bill. However, the prospects for merging remain unclear, especially against the backdrop of public opposition from certain high-level officials.

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

On the international front, this trend is also gradually spreading. For example, a well-known project has obtained regulatory approval for its stablecoin in Dubai, and the Bank of Korea is also exploring the issuance of a stablecoin pegged to the Korean won. However, currently, the United States is the most advanced in this development.

Stablecoins are just the starting point. They mark the first stage of introducing traditional fiat currencies into the blockchain, achieving the deployment of a 24/7, fast interoperable infrastructure. The focus of the next stage will be the introduction of on-chain financial assets, starting with tokenized stocks.

A well-known trading platform has recently launched tokenized trading functionality for 200 listed stocks to users in Europe, becoming a pilot platform to test user demand and execution quality. Another crypto exchange is also seeking corresponding regulatory approval in the United States to promote similar products. These early attempts pave the way for more traditional financial products to be brought on-chain, with the next steps expected to 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 regional conflict that broke out on June 13, 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 reacted mildly; however, after the escalation of the situation on June 22, cryptocurrency asset prices fell significantly. With the announcement of a ceasefire agreement on the 24th, prices quickly rebounded. Despite sporadic conflicts still occurring by the end of the month, the market as a whole has stabilized.

During this period, Bitcoin's price trend has risen in sync with the US stock market, showing no safe-haven attributes. Compared to the performance in April and May when Bitcoin was regarded as a store of value asset due to trade tariffs and global bond market tensions, this time it leans more towards the logic of risk assets. Bitcoin has outperformed gold and the overall crypto market, partly due to strong institutional support, including a monthly inflow of $4 billion into ETFs, 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 local crypto infrastructure, particularly the Bitcoin mining industry. According to estimates from 2021, approximately 4.5% of global Bitcoin mining occurs in this region, mainly relying on low-priced government-subsidized electricity settled in local currency. During the Bitcoin bull market, this structure yields considerable profits.

After the escalation of the conflict, there are rumors that some local mining sites were damaged, leading to a decline in network hash rate. However, short-term hash rate fluctuations are often more likely caused by block time differences or data noise, and there is currently no clear evidence that this conflict has caused systemic damage to mining facilities. Another possible explanation is that the heat wave weather in the Eastern US and the Midwest has forced miners to temporarily reduce production.

In addition to infrastructure, this conflict has sparked discussions about the role of cryptocurrency in the local financial system. For a long time, the region has seen significant adoption of cryptocurrencies by the private and gray economies due to high inflation, international sanctions, and the unstable exchange rate against the dollar.

Past data shows that during major local events in 2024, there was a significant increase in the outflow of crypto assets.

Bitcoin and a certain public chain have traditionally been the main blockchain networks used in the region, especially the latter for USDT stablecoin transfers. However, in this round of conflict, on-chain stablecoin transaction and settlement volumes did not show a significant increase, indicating that the overall cryptocurrency usage pattern did not change due to the outbreak of war, and the on-chain activity of short-term holders actually declined.

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

This region is one of the countries most severely affected by currency devaluation and long-term sanctions globally. For such societies, crypto assets do play an important role in cross-border capital flows. The political and network dimensions exhibited in this round of conflict further indicate that crypto has become a 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 be on several key events and macro indicators that may have a significant impact on asset pricing and the overall environment.

A bill signed on July 4 may significantly expand the fiscal deficit, which is already above expectations. According to