Bitcoin has climbed above $85,000, marking its highest level in eight months. Despite a setback for US crypto regulatory legislation, digital assets have not only avoided sustained pressure but have quickly recovered lost ground, prompting Bitwise Chief Investment Officer Hougan to declare that the "crypto winter" is over and the market has entered a "crypto spring."
Hougan has made a clear assessment that the nearly year-long "crypto winter" has come to an end, and he anticipates this could evolve into the strongest and most enduring bull market in cryptocurrency history. Over the past five days, Bitcoin has accumulated gains exceeding 7%, with a nearly 35% rise over the last three months. From a technical perspective, analysts at BTIG believe that as long as the support level near $75,000 holds, bullish momentum could push prices toward the $90,000 region.
This rebound has occurred against the backdrop of the failure of the Digital Asset Market Clarity Act to pass a procedural vote in the Senate, challenging the simplistic logic that "legislative failure equals negative news." The market is now reassessing the true impact of regulatory uncertainty.
Legislative Blockage Fails to Halt the Rally
Last week, the Digital Asset Market Clarity Act fell short in a Senate procedural vote, with 49 votes in favor and 50 against, failing to reach the 60-vote threshold required to advance. The bill aimed to establish a more comprehensive regulatory framework for the US digital asset market, clarifying the division of responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and was viewed by the crypto industry as one of the most significant regulatory legislative efforts in recent years.
Disagreements over issues such as conflicts of interest among government officials, stablecoin rewards, and impacts on the banking sector were the primary points of contention during negotiations. Following the release of the vote results, Bitcoin and some crypto-related stocks initially dipped, but subsequently bounced back quickly. Hougan believes that with the failure of the Clarity Act, the SEC and CFTC can still rely on existing authorities to craft rules in the short term, and legislative failure does not necessarily imply a deterioration in the regulatory environment.
Michael Saylor, Executive Chairman of Strategy, also characterized the setback of the bill as a "positive turning point" for the digital asset industry, suggesting that rather than accepting potentially long-term entrenched restrictions, the industry should leverage the existing regulatory framework to pursue more favorable rules. He emphasized that the more critical task over the next two years is to expand the practical application scale of digital financial products.
The Core Logic Behind the Crypto Spring: Capital Flowing Back from AI
The fundamental basis for Hougan's judgment that the "crypto winter" has ended is not merely the price rebound, but rather the divergence between price and fundamentals. He points out that while crypto asset prices have been declining over the past period, the industry's fundamentals have not deteriorated in tandem: on-chain transaction activity has increased, and major financial institutions like BlackRock have further deepened their participation in the digital asset market, creating a pattern of "cyclical price declines alongside structural fundamental improvements." He expects that crypto asset prices may catch up with fundamental changes later this year.
What is even more noteworthy is the shift in capital flows. Hougan indicates that investors are rotating back into cryptocurrencies from AI stocks. He adds that the previous AI craze "sucked up almost all the attention in the market. Every momentum-chasing investor was focused on AI. Now, as the AI trade stabilizes somewhat, we are beginning to see capital flow back into the cryptocurrency market." If this assessment holds, it implies that the driving force behind Bitcoin's current rebound has shifted from pure safe-haven demand or policy expectations to a broader asset allocation rebalancing, with the decline in AI trade crowding providing incremental capital sources for crypto assets.
The $90,000 Threshold Becomes the Next Key Watch Point
From a longer-term perspective, Bitcoin has not yet fully emerged from its previous correction. Bitcoin hit an all-time high of approximately $126,000 last October, subsequently halving in value and falling to a low of around $57,600 in early July this year. Even after the recent sharp rebound, the current price remains about one-third below its historical peak.
This suggests that the current rebound is more akin to a recovery from a deep correction rather than the confirmation of a new phase of record highs. Analysts believe that whether the $90,000 level can be effectively broken through will be a key test of the strength of the "crypto spring": if the price encounters resistance near $90,000 and retreats, the market may need to reassess the sustainability of the capital rotation; if it breaks through on strong volume, it would further reinforce Hougan's assertion of "the strongest and longest-lasting bull market in history."
Going forward, attention should be paid to the Federal Reserve's interest rate path and the trajectory of long-term US Treasury yields, as they remain the core macroeconomic variables influencing crypto asset valuations.
Comments