Bitcoin at $110,000 Is Just the Beginning; GENIUS ACT Poised to Ignite Crypto Super Cycle

Bitcoin has once again hit a new all-time high, with its price holding steady above $110,000. The market rally is fueled by a confluence of institutional capital, ETF inflows, and favorable policy expectations. The core driver for this surge is twofold: breakthrough progress in the U.S. GENIUS Act is creating wider channels for capital inflow, while the Trump administration’s pro-crypto stance has ignited investor confidence.

However, Elon, a senior analyst at Ultima Markets, notes that potential risks should not be overlooked. These include the volatility of ETF fund flows, technical resistance facing Bitcoin’s market dominance, and potential capital diversion to Ethereum and MEME coins, which could trigger market choppiness in the coming months.

1、What’s driving the recent bitcoin rally?

Three significant capital flows are fueling Bitcoin’s recent surge: aggressive accumulation by institutional investors, sustained inflows into Bitcoin Exchange-Traded Funds (ETFs), and safe-haven demand stemming from weak U.S. Treasury appetite.

Progress on the U.S. GENIUS Act has been the ultimate catalyst for Bitcoin reaching new all-time highs.

On May 20, 2025, the GENIUS Act passed a crucial procedural vote in the Senate with 60 votes, indicating sufficient support to advance through subsequent legislative stages. This will be followed by a full Senate vote, consideration by the House of Representatives, and presidential signature.

The significance of the GENIUS Act cannot be overstated: firstly, it has fueled strong market expectations for greater regulatory clarity during a potential Trump administration; secondly, it provides an institutional framework for the continued issuance of stablecoins.

A significant portion of the capital driving the Bitcoin market originates from stablecoins. As the regulatory framework becomes clearer, stablecoin issuers will gain greater operational flexibility, meaning the channels for capital inflow into the Bitcoin market will become more seamless and stable.

Beyond this, the influx of institutional and traditional capital continues to support Bitcoin’s price.

MicroStrategy Inc. is undoubtedly one of the biggest drivers of this Bitcoin rally. CEO Michael Saylor has recently been vocal on social media, hinting at continued large-scale Bitcoin purchases by the company. MicroStrategy currently holds over 550,000 Bitcoin, valued at over $50 billion, making it the publicly traded company with the largest Bitcoin holdings globally.

MicroStrategy’s success is triggering a ripple effect. An increasing number of companies are beginning to include Bitcoin on their balance sheets, and this trend of institutional adoption is providing strong buying support for Bitcoin.

Spot Bitcoin ETFs have seen robust inflows, attracting approximately $3.6 billion in May. The launch of spot Bitcoin ETFs has provided a convenient investment channel for traditional investors, a key factor driving Bitcoin’s ascent.

However, investors need to be wary of the volatile nature of ETF flows.

The U.S. Dollar Index has fallen to a 16-month low, marking its worst monthly performance since the Federal Reserve’s quantitative easing (QE) in 2009. Furthermore, the high term premium on U.S. Treasuries reflects market expectations of future interest rate hikes and economic uncertainty. Against this backdrop, Bitcoin is benefiting as an unconventional safe-haven asset. However, during market panics, ETFs could also face large-scale redemptions, which would exert significant downward pressure on Bitcoin prices.

2、How important is US President Donald Trump’s crypto optimism for the sector’s growth?

President Trump’s stance on cryptocurrencies is certainly a decisive factor for the industry’s development.

During his campaign, Trump repeatedly expressed support for cryptocurrency development, even proposing a vision to make the U.S. a “Bitcoin superpower.” This shift in policy expectations has significantly boosted market confidence, attracting substantial capital into the Bitcoin market.

Trump signed an executive order on March 6, 2025, to establish a strategic Bitcoin reserve, incorporating Bitcoin, Ethereum, and other cryptocurrencies into national reserves, and nominated pro-crypto officials (such as SEC Chair Paul Atkins). This has reduced regulatory pressure and attracted institutional and government investment.

For example, New Hampshire has become the first state to allow its treasury to invest in Bitcoin, permitting up to 5% of state assets to be allocated to it. Government agencies have also begun to indirectly increase their Bitcoin exposure by acquiring shares in companies like MicroStrategy.

Furthermore, the advancement of the GENIUS Act, the stablecoin regulation bill, provides much-needed regulatory clarity for the industry. Corporate digital currency strategies are receiving tacit approval and support at the policy level.

3、Do you expect bitcoin’s market dominance (currently 63%) to continue to rise in the coming months?

In the short term (1-3 months), the continued impact of Trump’s policies, institutional inflows into Bitcoin ETFs, and the market’s reaction to macroeconomic uncertainties (such as tariffs and inflation) remain key factors supporting an upward trend in Bitcoin’s dominance.

However, two bearish factors warrant close attention.

First, from a technical perspective, Bitcoin dominance may face a pullback around the 64%-65% resistance level.

Bitcoin dominance (BTC.D) faces selling pressure at the 0.786 Fibonacci retracement level and the previous support-turned-resistance zone around 64.22%, potentially signaling a short-term decline. This could create opportunities for capital rotation into other digital currencies.

Second is the catch-up rally in Ethereum and the development of the MEME coin ecosystem.

On May 14, Ethereum announced its “Trillion Dollar Security Plan,” emphasizing Ethereum’s decade of stable uptime and its decentralized validator set to demonstrate its capability to secure trillion-dollar-level value.

Although this appears more like a marketing strategy than a genuine technological innovation, it has, to some extent, attracted capital inflows into Ethereum amidst a backdrop of rising trading sentiment in the digital currency market.

Additionally, on-chain data reveals that “whale” addresses holding over 10,000 ETH had quietly made large-scale strategic accumulations before this price surge.

Since late April, the net ETH positions of these whale addresses have turned positive and have continued to steadily increase their holdings.

The total supply of ETH held by these large entities has risen to its highest level since March 2025, exceeding 40.75 million ETH.

Continuous accumulation by “whales” is often interpreted by the market as a sign that large, well-informed investors have strong confidence in future prospects. Their active positioning has undoubtedly injected a shot of adrenaline into the entire Ethereum market, reinforcing bullish expectations.

Meanwhile, the recent rise of MEME coins and artificial intelligence-related tokens has shown a tendency to attract capital flows.

In 2020-2021, although Bitcoin was still in a strong uptrend, the DeFi and NFT crazes caused Bitcoin’s dominance to drop from 70% to 40% at one point.

Whether it’s Trump-themed coins potentially launched after his election or the recently popular Labubu coin following Pop Mart’s Labubu character craze, it signifies that speculative sentiment is still likely to attract a portion of capital.

If a trend similar to 2021 reoccurs in 2025, Bitcoin’s dominance might struggle to quickly surpass its May high. Even if it does, Ultima Markets believes it will remain capped below the key resistance level of 68% for the next three months.

4、Do you think other digital assets including Ethereum, Solalan, XRP will hit all-time highs this year as well?

Ranking by probability of a breakout, Ethereum would certainly be first, followed by Solana. A breakout for XRP within the year is less likely.

From a technical perspective, Ethereum has completed its corrective trend and is poised to resume its upward trajectory. Solana’s moving average signals also indicate the bull market is ongoing. XRP, however, is more likely to experience wide range-bound trading within the year.

From a fundamental perspective:

• Ethereum spot ETFs were approved in July 2024, with assets under management (AUM) reaching $24 billion by 2025, and institutional inflows continue to increase. Trump’s pro-crypto policies further boost confidence. Combined with Ethereum’s aforementioned “Trillion Dollar Security Plan,” if the market enters an altcoin season, Ethereum could be the first to break out.

• Solana’s ecosystem and the probability of ETF approval support a new price high. Solana’s Decentralized Exchange (DEX) trading volume reached $2 billion per day in February 2025, surpassing Ethereum multiple times. Its DeFi Total Value Locked (TVL) reached $5 billion, and its NFT and meme coin (like Solana Monkey Business) ecosystems are flourishing. Additionally, speculation about Solana ETF approval in 2025 is growing, with Polymarket data indicating a high probability. If officially approved within the year, it could attract billions in institutional funds, similar to the 60% rally effect seen with Bitcoin ETFs.

• XRP lags behind Ethereum and Solana in the DeFi and NFT sectors, with its growth reliant on the single narrative of cross-border payments. XRP’s current market capitalization is approximately $138 billion. For its price to surpass $3.40, its market cap would need to increase to about $190 billion, making a substantial rise more difficult to achieve compared to Ethereum (which would need to reach $182 billion for a similar scale of market cap).

5、Where do you see bitcoin by the end of the year?

Before answering this question, it’s crucial to re-emphasize the importance of the U.S. GENIUS Act.

The GENIUS Act requires stable coin issuers to hold 1:1 reserves in U.S. dollars or high-quality assets (like U.S. Treasuries), potentially increasing demand for U.S. Treasuries and indirectly stabilizing liquidity in the crypto market.

Over the next four years, the stable coin market cap is projected to swell from less than $300 billion currently to $2 trillion.

While providing “ammunition” for the secondary market for U.S. Treasuries, the GENIUS Act will attract more capital into the crypto ecosystem, with Bitcoin, as the market leader, likely to be a primary beneficiary.

Furthermore, the global M2 money supply is a key indicator for observing Bitcoin price trends.

Ultima Markets previously shared its Q2 outlook for Bitcoin in mid-April:

“Bitcoin is highly positively correlated with the global M2 money supply. Bitcoin acts like a ‘capital magnet,’ theoretically absorbing up to 10% of newly printed money.”

At that time, Bitcoin was below $90,000; now, following the trend in broad money supply, Bitcoin has stabilized around $110,000.

For the remainder of the second quarter, Bitcoin is expected to hold firm above $110,000. Due to Bitcoin’s rapid ascent, there’s a probability of profit-taking by speculators. Therefore, Bitcoin is likely to undergo a consolidation phase in the third quarter.

Towards the end of the third quarter, the Federal Reserve may implement monetary easing due to pressure from U.S. Treasuries. At that point, Bitcoin is expected to resume its upward trajectory in the fourth quarter, potentially targeting at least $140,000, which is also near the upper band of Bitcoin’s upward price channel.