Will this crypto cycle turn into a major bull market?
This crypto rally has been quite intense, igniting the enthusiasm of genius traders. Let’s first clarify what has happened recently, because much of the discussion is based on an incorrect understanding of causality. This rally was not driven by events within the crypto industry, but by the combination of two external events.
On August 19, the U.S. Treasury announced that it would at least double the liquidity-support repo cap for 10- to 30-year Treasury bonds, from $2 billion per operation to at least $4 billion, effective September 9. Mechanically, this is negligible relative to the $40 trillion debt stock, and the market quickly realized that it did not create new buyers, but merely shortened the duration of outstanding debt—the decline in yields was largely reversed within a day.
But the signal was different. At a time when federal debt had surpassed $40 trillion and long-term yields had reached their highest level since 2007, the move to suppress borrowing costs signaled to the market that policymakers could no longer tolerate sufficiently high long-term rates. This directly strengthened the debasement trade, so gold rose in tandem while the dollar weakened. The Financial Times described the move as the return of the debasement trade.
At the same time, Trump publicly called on Congress to pass the CLARITY Act. On August 19, more than $1.4 billion in short positions were liquidated across the market. The three factors combined to push Bitcoin from $64.7k to $79k, a gain of more than 23% in one week.
Next is what I believe to be the biggest misconception in the discussion.
The common view is that “most of Bitcoin’s negative catalysts have been exhausted, with the only remaining uncertainty being the CLARITY Act.” This gets the causal relationship backward. The CLARITY Act is not the last risk that has yet to materialize; it is the fuel for this rally itself.
The bill’s current status: it has passed the House and passed the Senate Banking Committee in May, with September 15 set for the first procedural vote. The core dispute concerns the stablecoin yield provisions—the current draft prohibits issuers from paying interest solely because users hold balances, but allows activity-based rewards linked to payments, remittances, and liquidity provision; the banking industry is lobbying for tighter language. Standard Chartered’s estimates explain the motivation: if the provisions are loosened, as much as $500 billion in deposits could flow from traditional banks into stablecoin products by 2028.
In terms of odds, Galaxy Research has lowered the probability of the bill becoming law this year from 50% to 30%, while Polymarket traders briefly put it at around 17% in early August.
So the real risk structure is this: buying at $77k means paying a premium for something the market assigns only a 30% probability of happening. The marginal upside from passage is quite likely to be smaller than the marginal downside from failure.
As for “whether there will be a major bull market,” I believe the most important long-term logic to watch is this reflexive chain:
U.S. federal debt has surpassed $40 trillion, and interest expense has exceeded defense spending. As of June 2026, Japan, the U.K., and China—the three largest holders of U.S. Treasuries—held a combined approximately $2.69 trillion, while incremental buyers are retreating. Stablecoins are currently the most politically feasible alternative buyers—the GENIUS Act requires issuers to hold cash or Treasuries maturing within 93 days, precisely the instruments the Treasury needs to issue, while requiring neither Federal Reserve balance-sheet expansion nor government-budget funding.
But stablecoin growth is tightly bound to the crypto market. Data from the Federal Reserve Bank of Kansas City shows that approximately 48.8% of the stablecoin supply is concentrated in trading and financial applications, transfers account for around 29%, and actual payments are estimated at only about 0.7%. The primary users remain traders who need dollars to move between risk assets. Bitcoin still accounts for more than half of crypto’s total market capitalization, and historically there has never been an altcoin season without a Bitcoin bull market.
The chain therefore closes: the Treasury needs new buyers → the new buyers are stablecoins → stablecoins need crypto trading volume → crypto trading volume needs a Bitcoin bull market.
The weakness in this logic must also be pointed out: this means “there is an incentive,” not “there is a tool.” The U.S. Strategic Bitcoin Reserve established by the March 2025 executive order still has no confirmed record of open-market purchases, and Bessent explicitly stated in August 2025 that the government would not buy under the existing framework. Senator Lummis’s BITCOIN Act, which requires the purchase of 1 million bitcoins within five years, has never reached a floor vote. Having an incentive but no direct leverage does not imply an inevitable outcome.
Positioning also needs to be viewed objectively. Bitcoin’s all-time high was 126,198 on October 6, 2025, while Ethereum’s was 4,953 on August 24, 2025. Bitcoin is currently approximately -38% from its previous high, and Ethereum approximately -50%. This is the position of a bear-market rebound, not a bull-market continuation—acknowledging this does not affect a long-term bullish view, but it does affect how one bets.
Finally, regarding the claim that “crypto has already decoupled from U.S. equities”: this did briefly occur earlier this year, when Bitcoin’s correlation with the software-stock ETF IGV fell from 1.0 to 0.13 after the Iran conflict. But by the end of June, the trend had disproved the claim: Bitcoin fell back to $60k, declining alongside big tech. The recent capital rotation into the AI memory-hardware sector has likewise created a headwind. The standard is simple: if U.S. equities fall while crypto holds up, an independent trend is established; if they continue moving in sync, it cannot be called decoupling.#BTC三天大涨20% $BTC $ETH
