BTC breaks 75,000: bears recede, ETF and Strategy set the tone

According to Woofun AI, Trump urged Congress to advance the CLARITY Act at the White House crypto meeting, which quickly improved market expectations about the future of US crypto regulation. At the same time, the US Treasury has expanded long-term bond repurchases, driving long-term yields back, and the pressure on the dollar and real interest rates on risky assets has eased. Bitcoin once surpassed $75,000 due to the narrowing of policy discounts and improved liquidity expectations, and bears' recovery resonated. This round of rise was initially initiated by policy signals, then breaking through key prices triggered large-scale short order liquidation. Bears were forced to make up for further amplification of gains, causing Bitcoin to quickly break out of the previous volatile range.

However, purchases brought about by forced liquidation are phased. As highly leveraged short orders are cleared one after another, the subsequent market requires active capital relay. Determining whether Bitcoin can move from a rapid rebound to a continuous rise has fallen to the core of two institutional funding channels: the US Bitcoin Spot ETF, and Strategy (MSTR.US)'s financing and buying cycle.

Closing short positions can quickly push up prices and improve market sentiment, but it is difficult to independently support a round of continuous market conditions. The ability to absorb short-term profit markets and raise the price center still comes from the spot market, especially the US Bitcoin spot ETF. Data compiled by Woofun AI shows that on August 19, the US Bitcoin Spot ETF had a net inflow of about US$517 million in a single day, recording a net inflow for the third day in a row, and the largest single-day net inflow in three and a half months. This shows that institutional capital has begun to take over and make up for bears, and the buying structure of the market is shifting from being driven by derivatives to resonating with spot and derivatives.

This change improved the quality of the current round of rebound. Previously, Bitcoin rose rapidly, stimulated by policy news, and the market may still interpret it as an event-driven transaction; net ETF inflows for three consecutive days indicate that some institutional capital is using improved policy expectations to re-establish spot exposure. The key to the future is whether ETF net inflows can continue to be in the hundreds of millions of dollars and spread from a few leading products to more funds. Continued large net inflows can absorb short-term profit markets and support the price center after Bitcoin breaks through; if capital flows quickly decline, the market may still fluctuate again at a high level after marginal buying caused by short positions disappears. Therefore, the continuity of ETF funding flows over the next few days will directly determine the quality of this round of growth. Price breakthroughs indicate that the market has already started, and institutional spot capital determines whether the market can continue.

The second potential buy to watch out for comes from Strategy (MSTR.US). Strategy (MSTR.US) recently disclosed that it holds 840,447 bitcoins, with an average purchase cost of around $75,385. As Bitcoin rose above $75,500 in the intraday period, its position once returned above the break-even line. Credit expectations for Strategy (MSTR.US) common stock and preferred stocks improved simultaneously after pressure on the asset side declined, with STRC (STRC.US) recovering above $95. STRC (STRC.US) is an important financing tool for Strategy (MSTR.US) to expand Bitcoin's balance sheet. Its price target is close to the face value of $100. The closer the price is to face value, the lower the market's concerns about dividend coverage and credit risk, and the more mature the conditions for Strategy (MSTR.US) to reissue STRC (STRC.US) financing. As of August 16, the company still retains approximately US$17.51 billion in STRC (STRC.US) issuance quota, with plenty of potential financing space.

However, the rise of STRC (STRC.US) above $95 currently indicates that the financing window is being repaired, and this does not mean that new funds to buy coins have been landed. Strategy (MSTR.US) did not issue STRC (STRC.US) in the last week, did not buy new bitcoins, and is still repairing the financing structure by selling MSTR (MSTR.US), supplementing dollar reserves, and repurchasing STRC (STRC.US) at the discount STRC (STRC.US). The next phase of a truly signalling change is STRC (STRC.US) getting closer and stabilizing around $100, followed by Strategy (MSTR.US) resuming STRC (STRC.US) issuance and Bitcoin accumulation. Once this cycle is restarted, STRC (STRC.US) financing may be converted into direct spot Bitcoin purchases and resonate with ETF capital inflows. The return of Strategy (MSTR.US) positions to the main line also has important emotional significance. When the price of Bitcoin falls below its average cost, the market pays more attention to balance sheet pressure, financing costs, and potential coin selling risks; once the price returns above the cost line, investors' focus will shift back to its ability to expand financing. Whether STRC (STRC.US) can continue to recover is therefore a leading indicator for observing when Strategy (MSTR.US) will once again become a big buyer of Bitcoin.

This round of Bitcoin's rise has completed the first phase: favorable policies improve sentiment, macro-liquidity expectations drive valuation repair, and short positions close to accelerate price breakthroughs. The second phase requires continued incremental funding from ETF and Strategy (MSTR.US). The strength and weakness of the market can be judged based on two data points: whether the US Bitcoin Spot ETF can continue to absorb market pressure after the bears recouped the tide; whether STRC (STRC.US) can stabilize its recovery to a face value of $100 and push Strategy (MSTR.US) to resume preferred stock financing and increase Bitcoin holdings.

If the two funding channels are strengthened at the same time, Bitcoin is expected to rebound from a bearish recouping market to a trend driven by institutional funds. ETFs are responsible for providing continuous spot demand, and Strategy (MSTR.US) converts capital market capital into Bitcoin purchases through financing. The resonance of the two may further raise the market price center.

If ETF inflows cool down rapidly, the Strategy (MSTR.US) financing cycle fails to resume, and profit markets accumulated by rapid short-term surges may drive the market to a higher level of volatility. The pace of regulatory legislation, US bond yields, and the trend of the US dollar will also continue to influence the risk appetite of institutional capital. Following the shift in macroeconomic policy, the market once again verifies the central position of institutional capital in pricing power. If dual-channel resonance fails, high level shocks will become the norm in the short term.