Market liquidity shows a trend of centralization, and crypto compliance sentiment is yet to be realized.
Written by: Pzai, Foresight News
As Bitcoin once again creates a new high of $97,000, its market share in the cryptocurrency market has also reached a new high in three years. Pro-crypto groups under Trump have always placed Bitcoin at the core of their crypto strategy, and with the clarification of the crypto compliance environment, various compliant investment methods are being sought after by investors.
Crypto stocks are rising, while altcoins are underperforming.
With Bitcoin's further consolidation of on-market and off-market liquidity, its market share has reached a recent high of 61.6%. The performance of altcoins has mostly declined, with only BTC, SOL, and XRP among the top ten crypto assets showing an increase. Due to the liquidity in existing compliant entry channels being largely concentrated in Bitcoin and its related assets, the liquidity of altcoins has been displaced.
Additionally, the exchange rate of Ethereum, the second-largest crypto asset, against Bitcoin has dropped to 0.03217, reaching a new low in nearly three years, and its poor price performance has raised certain doubts in the Chinese community about Ethereum and its operational model. As of press time, Ethereum is quoted at $3,125, long hovering around the $3,000 mark.
The trend of market polarization is also prominently reflected in the MEME-related markets. Among the leading MEME tokens on Solana, the average daily decline is around 5%-10%, indicating a trend of funds partially flowing back to mainstream assets.
Meanwhile, off-market, a large influx of funds is driving a steady rise in Bitcoin prices. Bloomberg senior ETF analyst Eric Balchunas stated that the trading volume of Bitcoin ecosystem stocks reached $50 billion, equivalent to the average daily trading volume of the entire UK stock market. Among them, MicroStrategy (MSTR) alone contributed $32 billion, while MSTU and MSTX (two leveraged ETFs of MSTR) totaled $6 billion, surpassing the total trading volume of all spot Bitcoin ETFs. Compared to spot ETFs, investors are more willing to trade with related companies, and MSTR's stock price also hit a historic high of $504.83, with a market capitalization exceeding $100 billion, and its daily trading volume surpassed Tesla, second only to Nvidia.
As MSTR, a crypto entity in the US stock market, has been very active recently, including plans to sell notes worth $2.6 billion and use the proceeds to purchase Bitcoin. So far, MicroStrategy has already seen an unrealized gain of over $15.5 billion.
Regarding ETFs, the net inflow in the past two months has also exceeded $9 billion, reflecting traders' confidence in Bitcoin prices, especially after Trump's election, further solidifying crypto confidence.
Can the bull market continue?
CryptoQuant founder Ki Young Ju analyzed that there is still a lot of room for the subsequent bull market of Bitcoin, as the bull-bear index has recently turned positive. Additionally, the accumulation of whales on-chain is also rising, similar to the situation in 2020. He stated that the upcoming halving cycle combined with the liquidity from institutional entry can support certain trends in the future.
Crypto compliance sentiment is still to be realized.
This week, traders are closely watching Trump's appointments for Secretary of the Treasury and SEC Chair. According to sources, the Trump team is considering establishing the first crypto-related position in office, injecting another dose of motivation for institutions to enter the crypto space.
Currently, the popular candidates for SEC chair include Goody Guillén, who has worked in blockchain legal affairs at law firms, as the Trump team seeks a leader who understands the industry and takes a cautious approach to applying securities laws to digital assets until Congress passes clear legislation. Additionally, Howard Lutnick, CEO of Cantor Fitzgerald, which manages most of Tether's reserves, has been nominated by Trump as the new Secretary of Commerce. The company recently announced an initial Bitcoin leveraged financing business of up to $2 billion, reflecting the Trump team's shifting attitude towards integration in the crypto space.
In terms of legislative progress, although there has been a constant call within the US Congress for the regulation of digital assets, real progress in forming a concrete policy framework has been very limited. In May of this year, the US House of Representatives passed the (21st Century Financial Innovation and Technology Act) (FIT21), aimed at providing federal guidance for the digital asset industry. However, the bill still faces many challenges, including further coordination and cooperation with the Senate and the executive branch. With the Trump administration coming to power, we also look forward to a solid reassurance that crypto compliance will truly be realized.
