Bitcoin price breaks through $109,565, once again setting a new historical record. Under the triple resonance of trade easing, institutional involvement, and supply tightening, Bitcoin once again proves its unique value as digital gold, with its scarcity and consensus being amplified at this moment.
Notably, just a day before Bitcoin broke through this threshold, the US Senate advanced the procedural motion for the 'GENIUS Stablecoin Act' with a 66:32 vote. The 'GENIUS Stablecoin Act' will provide a federal regulatory framework for US dollar stablecoins, enabling traditional banks to use existing lending channels to provide collateral and clearing services for stablecoin issuance. Combined with the on-chain interoperability of DeFi protocols, this "on-chain-off-chain" liquidity bridge will unleash massive capital momentum. From a liquidity spillover effect perspective, the scaled expansion of stablecoin supply will directly boost available funds on exchanges and DeFi platforms, significantly reducing trading slippage while enhancing the feasibility of leverage strategies. Market volatility and price upward momentum will also be further stimulated in this process.
Similar to the United States, Hong Kong passed the 'Stablecoin Regulation Bill' in its third reading yesterday. The regulation is expected to take effect this year, giving the industry sufficient time to understand the licensing requirements, and also means Hong Kong becomes one of the first regions globally to complete stablecoin legislation. Hong Kong's stablecoin draft aims to provide a clear regulatory framework for the local market, promoting compliant stablecoin development.
We anticipate that in the coming years, the global stablecoin market value will expand from the current $250 billion to trillions of dollars. More importantly, stablecoin compliance will attract more "quasi-dollar" funds, endowing core assets like Bitcoin and Ethereum with stronger hedging and value storage attributes. As these funds gradually flow in, Bitcoin and Ethereum are expected to see a 20%-50% valuation increase in the next 6-12 months. Simultaneously, the maturation of compliant channels will provide a bridge for long-term capital like pension funds and mutual funds to enter the crypto market, significantly enhancing market demand stability and effectively reducing structural risks. The interaction of policy dividends and market consensus is opening up a new growth space for Bitcoin and crypto assets.
Beyond macro policy promotion, the market itself is reinforcing Bitcoin's scarcity logic. According to glassnode data, long-term Bitcoin holders' holdings have increased to 13.76 million coins, accounting for 65.6% of circulating supply, hitting a new high. Meanwhile, Bitcoin reserves on exchanges continue to decline, reaching only 2.437 million coins as of May 20th, the lowest level since 2018. This means tradable Bitcoin in the market is rapidly decreasing, and supply-demand mismatch further consolidates the basis for price increases.
Simultaneously, strong institutional fund inflows have become a powerful catalyst for market movement. MicroStrategy has added 7,390 more Bitcoins in the past week, with total holdings reaching 576,230 coins, valued at approximately $6.1 billion at current prices. Grayscale Bitcoin Trust (GBTC) and multiple Bitcoin ETFs have attracted over $633 million in net fund inflows over the past few weeks. Institutional investors' continuous layout through compliant channels not only strengthens market consensus on Bitcoin's scarcity and digital gold attributes but also establishes solid demand-side support for long-term price appreciation. This is a victory of "long-term thinking" - when institutions view Bitcoin as part of core asset allocation, its value ceiling is fundamentally reshaped.
The macroeconomic situation also provides excellent soil for Bitcoin's rise. Trump's early May statement about "historic cooperation with major powers" ignited market optimism about US-China trade easing. On May 12th, China and the US signed a tariff agreement, reducing mutually imposed tariffs from up to 84% to 10%. This unexpectedly policy breakthrough not only alleviates global economic uncertainty but also injects new upward momentum for risk assets like Bitcoin.
From policy relaxation to supply tightening, from institutional involvement to liquidity channel construction, this Bitcoin rally is the result of multiple logical resonances. Behind the historical high, it is not just a market fund carnival but also signifies that global capital is ushering in a new round of value consensus reconstruction for decentralized assets.
