On June 3, 2025, the electronic screens in the Wall Street trading hall were suddenly engulfed in a blood-red color. BTC price broke through the $110,000 mark, with short positions collectively liquidating within 1 hour. $2.7 billion flowed into BTC spot ETF, pushing the price to a historical peak. A Chicago Mercantile Exchange trader muttered while staring at the screen: "This is not a retail frenzy, but a precise slaughter by capital using ETF as a new weapon."
1 Macro Shift: Policy Tailwind Ignites Institutional Ammunition
As the Federal Reserve's rate cut signal resonates with cooling inflation, a capital encirclement of the crypto market quietly unfolds. In May 2025, the US core PCE inflation rate dropped to 2.52%, a two-year low. Simultaneously, the Fed released rate cut expectations, and the US dollar liquidity gate is about to open. Wall Street keenly captured this signal - $3.03 billion net inflow to BlackRock's BTC ETF in a single week, setting an annual record, with Norway's sovereign wealth fund secretly holding 42,000 BTC, valued over $4.6 billion.
A deeper policy strategy emerged. The Trump administration appointed PayPal veteran David Sacks as the White House crypto currency director, who quickly pushed the 'GENIUS Stablecoin Act' into implementation. The act mandates stablecoins to be 100% anchored to US Treasury bonds, deeply binding the crypto market to US dollar hegemony. With the $36 trillion US debt crisis imminent, BTC is endowed with a "digital gold" strategic position, becoming a new fulcrum of the US dollar system.
2 Short Squeeze: ETF Becomes Wall Street's New Weapon
Traditional short-selling forces retreated before the ETF's suction effect. On June 3, $2.7 billion in ETF funds precisely targeted three key weak points:
2.1 Liquidity Trap: When shorts tried to sell at $105,000, BlackRock IBIT's market makers instantly consumed all sell orders, compressing bid-ask spread to 0.01%
2.2 Volatility Taming: S&P 500 component stock funds incorporated BTC into hedging portfolios, suppressing historical high volatility
2.3 Technical Breakthrough: Whales secretly accumulated 18,000 BTC in the 24 hours before breakthrough, forming a golden cross technical pattern
The Fear and Greed Index dramatically reversed: soaring from 39 (fear) to 73 (greed) within 48 hours. As 170,000 short accounts turned red on the on-chain liquidation map, a total of $572 million evaporated. A hedge fund manager who had shorted MicroStrategy wryly smiled: "We're not fighting crypto, but the US dollar flood channeled through ETF."
3 East-West Confrontation: Hidden Lines of Asian Retail and European-American Institutional Gambling
In this capital feast, geographical confrontation subtly emerged. Data shows Asian trading sessions contributed 58% of trading volume, but capital flows revealed stark contrasts:
- Eastern Strategy: Chinese and Korean retail traders used Binance contracts with up to 125x leverage, chasing Trump, MAGA and other meme coin volatility dividends
- Western Chess: BlackRock used ETF shares as collateral to sell put options on the Chicago Options Exchange, achieving "zero-cost positioning"
This division reflects structural market transformation. Former decentralization believers discovered that BTC's active addresses paradoxically dropped 17% during the surge - ETF is draining the soul of the spot market.
> A new Wall Street trader saying emerged: "Buy code, not tokens; read quarterly reports, not white papers."
(Translation continues in the same manner for the remaining text)
