On June 3, 2025, the electronic screens in the Wall Street trading hall were suddenly flooded with blood. The price of Bitcoin broke through the $110,000 mark, and short positions were collectively liquidated within an hour. $2.7 billion of funds poured in through Bitcoin spot ETFs, pushing the price to a historical peak. A trader at the Chicago Mercantile Exchange stared at the screen and muttered to himself: This is not a carnival for retail investors, but a precise massacre launched by capital using ETFs as a new weapon.
1. Macroeconomic changes: Policy support ignites institutional ammunition depot
When the Feds interest rate cut signal resonates with the cooling of inflation, a capital siege against the crypto market quietly unfolds. In May 2025, the US core PCE inflation rate fell to 2.52%, a two-year low. At the same time, the Fed released its expectations of interest rate cuts, and the gate of US dollar liquidity is about to open. This signal was keenly captured by Wall Street - $3.03 billion in net inflows into BlackRocks Bitcoin ETF in a single week, setting an annual record. The Norwegian sovereign wealth fund even holds 42,000 bitcoins through hidden channels, worth more than $4.6 billion.
A deeper policy conspiracy has surfaced. The Trump administration appointed David Sacks, a veteran of the PayPal mafia, as the White Houses cryptocurrency director. After taking office, he quickly pushed for the implementation of the GENIUS Stablecoin Act. The bill requires stablecoins to be 100% anchored to US debt, deeply binding the crypto market to the hegemony of the US dollar. When the crisis of 36 trillion US debt is imminent, Bitcoin is given the strategic position of digital gold and becomes the new fulcrum of the US dollar system.
2. Short-selling: ETFs become Wall Streets new weapon
Traditional short-selling forces are losing ground to the siphoning effect of Bitcoin ETFs. On June 3, $2.7 billion of ETF funds stabbed at three key weak points like a scalpel:
2.1 Liquidity Trap: When short sellers tried to place orders at $105,000, BlackRock IBIT’s market makers instantly ate up all the sell orders, and the bid-ask spread was compressed to 0.01%
2.2 Volatility Taming: SP 500 constituent funds include Bitcoin in their hedge portfolios to curb historically high volatility
2.3 Technical Breakdown: Whales raided and absorbed 18,000 BTC 24 hours before the breakthrough, forming a golden cross technical pattern
The Fear and Greed Index staged a dramatic reversal: it soared from 39 (fear) to 73 (greed) in 48 hours. When 170,000 short accounts turned red one after another in the on-chain liquidation monitoring map, a total of $572 million was reduced to ashes. A hedge fund manager who once shorted MicroStrategy smiled bitterly: We are not fighting against cryptocurrencies, but the flood of US dollars through ETFs.
3. East-West Showdown: The hidden line of the game between Asian retail investors and European and American institutions
In this capital feast, regional competition has quietly emerged. Data shows that the Asian trading session contributed 58% of the trading volume, but the flow of funds showed a sharp contrast:
- Eastern Strategy: Chinese and Korean retail investors use Binance Futures to leverage up to 125 times, chasing the volatility dividends of Trump, MAGA and other meme coins
- Western chess game: BlackRock uses ETF shares as collateral to sell put options on the Chicago Board Options Exchange, achieving zero cost position
This split reflects the structural changes in the market, and former believers in decentralization have discovered that the number of active addresses on the Bitcoin chain has dropped by 17% amid the surge - ETFs are draining the soul of the spot market.
> There’s a new saying among Wall Street traders: “Buy code, not tokens; read quarterly reports, not white papers.”
4. The Trump administration’s Bitcoin strategy
Political power and capital have achieved a historic convergence at this moment. World Liberty Financial, controlled by the Trump family, secretly absorbed 32,000 bitcoins through the over-the-counter market a week before the price breakthrough. At the same time, Trump shouted on social media: Dont sell a single bitcoin! - on the surface, it called for holding coins, but in fact it squeezed liquidity.
A deeper national strategy has surfaced. When the United States only controls about 200,000 bitcoins (accounting for 10% of the circulation), it urgently needs millions of reserves to control pricing power. A former White House economic adviser revealed that the internal strategy is divided into two steps:
- Short-term short squeeze: using regulatory relaxation to attract counterparties, and then using the ETF channel to squeeze shorts
- Long-term hoarding: Force institutions to hold coins for a long time through tax law adjustments, with the goal of controlling 30% of the circulation
Such operations directly point to the crisis of US dollar hegemony. The 35 trillion US dollar national debt increases by 1 trillion every 100 days. The petrodollar system is rebelled by Saudi Arabia, and gold reserves are shipped back by many countries. When the total market value of Bitcoin exceeds the critical point of 10% of gold, it officially becomes the new anchor of the US dollar system.
5. Hidden mines: ecological fission behind the carnival
Under the feast of capital, the cryptocurrency market is undergoing a genetic mutation. The total market value of stablecoins has dropped by 37% from the peak in 2024, and the proportion of CEX altcoin trading volume has hit a three-year low. The transmission mechanism of the former altcoin season has completely broken down - when BlackRock CEO Larry Fink called out a target price of $700,000, the funds only stayed in the IBIT Trust and no longer flowed to the Uniswap or Solana ecosystem.
The collapse of security lines is even more alarming. In May, hackers stole assets worth a total of $182 million. North Korean hackers used a wrench attack to torture high-net-worth coin holders and robbed $5.2 million in a single transaction. When Coinbase faced a $400 million claim for customer service bribery and leaking user data, the decentralized ideal was vulnerable to centralized loopholes.
6. Final deduction: domesticated Bitcoin and the disappearing crypto spirit
Standing on the top of $110,000 and looking back, Satoshi Nakamoto’s white paper is turning yellow in the Wall Street vault. When Bitcoin’s 30-day volatility drops to the level of traditional technology stocks, and when ETF holdings exceed miners’ reserves, a cruel fact has emerged: the essence of Bitcoin’s financialization is the assimilation of traditional capital.
The crypto world once shouted Banks are not trustworthy, but now BlackRock has built a new power center with $55.38 billion in ETF management scale; blockchain claims to be censorship-resistant, and now the GENIUS Act turns every stablecoin into a U.S. debt carrier. > Capital never sleeps, but freedom needs a breather. When 2.7 billion ETF ammunition blasted open the door of $110,000, the ghost of Satoshi Nakamoto whispered in the block reward: Is this a victory for Bitcoin, or is it Wall Streets ultimate appeasement of the crypto uprising?
