Institutional Demand Puts Permanent Floor on Bitcoin Prices
The relationship between Bitcoin and traditional finance has evolved significantly since the Cypriot financial crisis in 2013. At that time, the collapse of banks on the island led to a massive Bitcoin rally as individuals in Greece and Spain feared they would face similar deposit taxes. The market value of Bitcoin crossed $1 billion on March 28, 2013, while its price rose from around $40 in January 2013 to nearly $265 in April.
Fast forward to 2026, when corporate Bitcoin holdings reached massive levels. Firms use Bitcoin as a form of 'armor' for their balance sheets to protect against the erosion of value in standard cash systems. The Treasury's long-dated bond buyback program and liquidity support for off-the-run bonds contributed to a short squeeze that sent Bitcoin above $70,000.
Galaxy Digital, led by Mike Novogratz, holds significant assets, while other companies like Metaplanet Inc. buy Bitcoin monthly to protect against a falling Yen. Treasury buybacks and corporate treasuries have become key drivers of the market.