Crypto Markets Surge on ETF Inflows and Regulatory Momentum

The crypto market has been experiencing a surge in recent weeks, with Bitcoin's price rising by over 23% last week. This was its strongest weekly advance since March 2023, according to Bitfire Research.

The rally is attributed to the influx of $1.9 billion into US spot Bitcoin ETFs and record short liquidations. The Treasury's decision to increase long-dated bond buybacks has also added a macro catalyst, signaling that policymakers are increasingly sensitive to stress in long-term government debt markets.

Gadi Chait, investment manager at Xapo Bank, views the rally as a meaningful improvement in market structure but notes that it is not yet confirmation of the broader cycle turning. He believes Bitcoin has likely formed an important local bottom and the probability of a 2022-style systemic unwind has declined.

Nicolai Søndergaard, senior research analyst at Nansen, is cautious about the rally's sustainability, stating that a clean break above $80K needs spot ETF demand to keep absorbing supply after the short squeeze fades. He also warns that regulatory momentum in the U.S. may be fragile and that institutional risk premium around crypto could remain high.