The reasons behind Bitcoin's breakthrough of $112,000: Weak dollar and institutional entry as the main driving forces.

Bitcoin broke through the $112,000 mark this morning, hitting an all-time high. The rally was driven by a combination of factors such as the continued weakening of the US dollar, abundant global liquidity, and the accelerated entry of institutional capital. In this article, we will review the market dynamics since June, analyze the impact of geopolitical conflicts and economic data on risky assets, and explore the unique performance of Bitcoin in this rally and its future direction.

June Market Review

In June 2025, the market was shrouded in trade uncertainties, geopolitical conflicts, and complex economic data. However, despite the grim macro backdrop, risk assets generally rebounded. The U.S. stock market closed higher across the board, with both the Nasdaq 100 Index and the S&P 500 Index hitting all-time highs. Bitcoin briefly fell below $100,000 mid-month but then rebounded strongly, rising 2.84% for the month. In contrast, the overall cryptocurrency market dropped 2.03%, with Ethereum experiencing heightened volatility and underperforming other mainstream assets, recording a decline of 2.41%.

At the beginning of the month, the market was generally positive, and investors were more optimistic about the digestion of macro data and geopolitical situation. U.S.-China trade tensions initially heated up again, but eased after the phone call between the two leaders. China's manufacturing PMI fell to its lowest level since 2022, and the Organisation for Economic Co-operation and Development (OECD) lowered its global growth forecast again. In the US, economic data was mixed: non-farm payrolls beat expectations, the unemployment rate held steady, initial jobless claims unexpectedly fell, and retail sales retreated. The (CPI) of the consumer price index in June came in lower than expected again, reinforcing the view that inflation is cooling. The Federal Reserve left interest rates unchanged for the fourth consecutive time at the June FOMC meeting, saying it needs to wait for more clear signals on inflation and the labor market.

The crypto market experienced several short-term shocks in June, including a public clash between Trump and Musk over tax policies, as well as a brief escalation of geopolitical tensions. After the market faced pressure in the penultimate week of June, Bitcoin rebounded with improved market sentiment and increased institutional participation. The total net inflow of Bitcoin ETFs in June exceeded $4 billion. Ethereum, on the other hand, faced higher volatility and deeper corrections, with specific triggers still unclear. At the same time, crypto treasury strategies gained attention, with several companies beginning to expand their holdings to non-Bitcoin assets like ETH, SOL, BNB, and HYPE, demonstrating the market's strong recognition of this strategy.

Geopolitics became the main focus in late June. On June 13, war broke out between Israel and Iran. Despite the Israeli military's airstrikes on Iranian nuclear facilities and Iran's missile retaliation, the market initially reacted calmly. After the U.S. airstrikes on three Iranian nuclear facilities on June 21, cryptocurrency asset prices fell sharply, while U.S. stocks remained stable. On June 24, Trump announced a ceasefire agreement mediated by Qatar, alleviating short-term panic in the market. Although sporadic missile attacks continued, the crypto market gradually recovered after the ceasefire, while traditional safe-haven assets like gold and crude oil retreated, reflecting a decrease in market concerns about a prolonged conflict.

Multiple allocations after BTC

An unexpected trend in 2025 is the rapid adoption of cryptocurrency treasury strategies by enterprises, particularly in June, when this trend accelerated significantly, with the number of related companies nearly doubling. Measured by trading volume, in June, the scale of Bitcoin purchases by cryptocurrency treasury companies surpassed the total net inflow of the US spot Bitcoin ETF (which was $4 billion that month).

While Bitcoin and Ethereum still dominate, more and more companies are starting to allocate to a wider range of crypto assets, such as SOL, BNB, TRX, and HYPE, indicating a growing trend of diversification beyond mainstream currencies. According to the research data, of the 53 crypto treasury companies that have been confirmed so far, 36 are focused on BTC, 5 are allocated to SOL, 3 are allocated to XRP, 2 are allocated to ETH, BNB and HYPE, and 1 is allocated to TRX, FET, and a comprehensive altcoin portfolio.

The continuation of this trend is strongly anticipated, as companies continue to push this strategy, while the market also demonstrates a strong willingness to provide ample funding and support for multi-asset allocation.

However, the market is starting to doubt this strategy, especially as some companies are using debt financing for cryptocurrency asset allocation, raising concerns about potential leverage risks. The commonly used instruments are zero-interest or low-interest convertible bonds. These bonds, if they are "in the money" at maturity (meaning the company's stock price exceeds the conversion price, making conversion to equity economically favorable), allow investors to choose to convert them into company equity. However, if they are "out of the money" at maturity, 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 crypto assets to raise funds, which may exert downward pressure on market prices and affect other treasury companies holding the same assets;
2. Issuing new debt to repay old debt is equivalent to refinancing;
3. Issuance of new shares for financing to repay debts or purchase additional assets, which is less risk-free;
4. If the asset value is insufficient to repay the debt, it may default.

The path the company ultimately takes will depend on the market conditions at the time of maturity. Generally speaking, the company can only resolve issues through refinancing if the market permits.

In contrast, the purchase of crypto assets through the issuance of shares is less risky, because it does not involve debt and does not constitute a mandatory repayment obligation, so it is more acceptable to the market in the overall risk structure.

According to a report released on June 4, current market concerns about the leverage structure may be exaggerated. Most debts issued by Bitcoin treasury companies will mature between June 2027 and September 2028. Although there have been systemic risks caused by high leverage in the crypto industry in the past, this type of debt structure does not currently pose an imminent threat. However, it is worth noting that if more companies adopt this strategy in the future and issue shorter-term debts, the potential risks will gradually accumulate.

Circle Goes Public and the GENIUS Act Catalyzes a Turning Point in the Industry

June 2025 will become a key turning point in the stablecoin industry, primarily driven by two major events: a certain company's successful listing and the U.S. Senate's passage of the GENIUS Act, which is 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 6 times in June. Despite such a substantial increase suggesting that the IPO pricing may have been too low, more importantly, investors' recognition of the future infrastructural role of stablecoins has significantly strengthened.

On June 25, the GENIUS Act was passed in the Senate with a vote of 68 to 30, marking a breakthrough after months of procedural voting and political maneuvering. This includes a key procedural vote failure on May 8 due to last-minute disagreements. The bill has now been handed over to the House of Representatives, where some members have suggested incorporating it into the broader CLARITY Act. However, the prospects for merging remain unclear, especially in the context of Trump’s public opposition.

Under regulatory encouragement, enterprises' interest in stablecoins continues to heat up. American retail giants are considering issuing their own stablecoins; a certain payment company is further expanding ecological support by integrating stablecoin products from multiple institutions. These companies are not only competing to issue stablecoins but also hope to take the lead in circulation scale and practical use. The industry's focus has shifted from "whether it can be issued" to "whether it can be implemented," and the success of stablecoins will depend on their penetration in real payment scenarios and user coverage.

Internationally, this trend is also gradually spreading. For example, a certain company 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, the United States is currently the most advanced in this regard.

Stablecoins are just the starting point. They mark the first stage of bringing traditional fiat currencies onto the blockchain, achieving the deployment of all-weather, fast-interoperable infrastructure. The focus of the next stage is the introduction of on-chain financial assets, with the first being the tokenization of stocks.

A trading platform has recently launched tokenized trading features for 200 listed stocks to users in Europe, becoming a pilot platform to test user demand and execution quality. Another company is also seeking the corresponding regulatory approval in the United States to promote similar products. These early attempts pave the way for more traditional financial products to go on-chain, with the next steps expected to cover asset classes such as private credit and structured funds.

Limited Impact of Geopolitical Conflicts on the Market

The Israel-Iran war that erupted on June 13, 2025, lasted for 12 days. Despite attracting global public attention, its long-term impact on risk assets is limited. In the early stages of the conflict, the crypto market and the stock market reacted mildly; however, on June 22, after the U.S. government launched "Operation Midnight Hammer" and bombed Iranian nuclear facilities, the prices of crypto assets experienced a significant drop. With Trump's announcement of a ceasefire agreement reached jointly with Qatar on June 24, prices quickly rebounded. Although there were still sporadic missile strikes at the end of the month and the war has not officially ended, the market has generally returned to stability.

During this period, Bitcoin's trend rose in tandem with U.S. stocks, and it did not show a safe-haven attribute. Compared to the performance of Bitcoin in April and May, which was considered a value reserve asset due to trade tariffs and a tight global bond market, this time it is more biased towards the logic of risk assets. Bitcoin's outperformance of gold and the overall crypto market can be attributed in part to strong institutional support, including $4 billion in monthly ETF inflows, continued buying by treasury companies, and emerging signs of sovereign buying, suggesting that the impact of geopolitical shocks on bitcoin is relatively short-lived.

The conflict has also sparked a renewed focus on Iran's local crypto infrastructure, particularly Bitcoin mining. According to a 2021 estimate, about 4.5% of the world's Bitcoin mining takes place in Iran, mainly relying on low-cost government-subsidized electricity settled in riyals. During Bitcoin's upward cycle, this structure brings significant profits.

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

In addition to infrastructure, the conflict has sparked discussions about the role of crypto in Iran's financial system. For a long time, Iran's high inflation, international sanctions, and unstable exchange rate against the US dollar have prompted the adoption of cryptocurrencies by the private sector and the gray economy.

Past data from a certain data analysis agency shows that during the assassination of the Hezbollah leader in 2024, as well as during multiple missile exchanges, there was a significant increase in the outflow of Iranian crypto assets.

Bitcoin and TRON have historically been the main blockchain networks used in Iran, especially Tron for USDT stablecoin transfers. However, in this round of conflict, the volume of on-chain stablecoin transactions and settlements did not increase significantly, indicating that the overall crypto usage pattern has not changed due to the war, and the on-chain activity of short-term holders has declined.

Although there were no significant anomalies in the on-chain data, the crypto industry emerged symbolically during this conflict: Iran's largest crypto exchange suffered a $90 million hack during the conflict, with the attackers being an organization supporting Israel, leaving anti-Islamic Revolutionary Guard Corps messages through wallet addresses. This exchange has previously been linked to the flow of funds associated with IRGC entities, and this attack seems more like a cyber psychological operation rather than a profit-driven attack.