Encryption frenzy begins! Bitcoin surpasses $123,000, BlackRock ETF aims for billion-dollar scale.

With the push of the Trump administration's friendly policies and large capital allocation, the world's largest cryptocurrency Bitcoin broke through the $123,000 mark for the first time on Monday. BlackRock, Inc.'s Bitcoin spot ETF is moving towards a scale of $100 billion. With stablecoin legislation set to pass, Republican members of the US House of Representatives announced the arrival of "Crypto Week". As the latest move to relax regulations, US officials on Monday released new guidelines on how banks can offer custody services related to digital asset categories. Short positions in Bitcoin were squeezed, causing billions of dollars in bearish bets to evaporate, which in turn helped push Bitcoin rebound by about 15% over the past week. This is in stark contrast to the situation a while ago. For months, Bitcoin has been stuck in a narrow range of fluctuations as investors cope with trade tensions and some former major buyers have been selling off. However, Bitcoin advocates continue to hold on, while cryptocurrency exchange-traded funds (ETFs), led by companies like Strategy (MSTR.US), have flourished once again, with financial companies promising to buy tens of billions of dollars worth of Bitcoin. Eric Jackson, President and Founder of EMJ Capital, said, "We did not expect this rapid rise. Many savvy investors I have spoken to believe that the price of Bitcoin could skyrocket to $150,000 or even $250,000 by the end of this year." As funds pour in like crazy, short sellers are being washed out. ETFs and institutions continue to buy large amounts, while a group of long-term holders and miners refuse to sell their Bitcoin. Adam Guren, Founder and Chief Investment Officer of Hunting Hill Global Capital, said, "We have seen record-low outflows from exchanges and tight order volume. There are simply no sellers to meet the demand. Bitcoin breaking $120,000 is not so much a 'sprint' as it is a 'squeeze'." As short sellers buy cryptocurrencies to close their positions, a massive wave of liquidation has accelerated the rise of cryptocurrencies - with around $574 million being liquidated in the past 24 hours. According to data compiled by Coinglass, on July 9th, when Bitcoin first broke its previous all-time high price, over $1 billion in short positions were liquidated, making it one of the largest liquidation events of the year. Last week, US-listed Bitcoin ETFs attracted over $2.7 billion in inflows, marking the fifth largest weekly inflow since their introduction in January 2024. The market value of the iShares Bitcoin Trust (IBIT) under BlackRock, Inc. has now surpassed $85 billion. Bloomberg Intelligence expects that the assets under management of this BlackRock, Inc. ETF could soon reach $100 billion. Meanwhile, according to data compiled by Coinglass, open futures contracts for Bitcoin have reached a record $86.3 billion. Data from CoinGecko shows that the total market capitalization of all tokens is approaching the $4 trillion mark. As investors continue to flock to ETFs, a new wave of financial companies has become new participants in this bull market. From Twenty One Capital under SoftBank Group to Tron Inc. under Justin Sun and ProCap Financial Inc. under cryptocurrency entrepreneur Anthony Pompliano, many companies are buying cryptocurrencies through equity and convertible bonds. Meanwhile, Strategy remains a major corporate holder, holding over 600,000 Bitcoins worth $73 billion. "Is this time different?" Gabe Selby, Director of Research at CF Benchmarks, said, "Compared to previous cycles, speculation related to cryptocurrencies is much less pronounced in the current bull market. The level of institutional investor participation is surprising, with new mainstream investors joining in." Stocks related to Bitcoin are also rising in sync. Ethereum has also joined the general uptrend of cryptocurrencies, with its price reaching a five-month high above $3,000. However, the market situation is far from invincible. This rebound is due to a more optimistic risk appetite on Wall Street overall, with stocks nearing historical highs and AI stocks rising significantly. The escalation of trade tensions may disrupt this momentum, with prominent figures like Jamie Dimon of JPMorgan warning that Wall Street is underestimating the possibility of US President Donald Trump re-implementing protectionist policies. Nevertheless, supporters of Bitcoin still believe that this cryptocurrency is an alternative means of exchange, a tool against inflation, and a store of value. Jackson of EMJ said, "Clearly, there is a core group of investors who are very bullish on Bitcoin, and there are also a large number of new investor groups that are different from previous cycles. I believe this current uptrend will continue for quite some time." Bitcoin futures indicate that the bullish trend has not weakened. In the area of perpetual contracts (a common way for traders to leverage in the cryptocurrency market), the demand for long positions exceeds the demand for short positions. Pankaj Balani, CEO and Co-founder of Delta Exchange, said, "With the price of Bitcoin continuing to break through $122,000, it may pave the way to $124,000-$125,000. With increasing volume, the price breaking through the $119,500 to $120,000 range reflects continued buying interest."