On July 14, 2025, Bitcoin broke through the historic $120,000 mark, and Wall Street institutions celebrated. On the other side of the world, 135,800 retail investors were staring at the glaring liquidation notice on their mobile phone screens - $493 million in wealth was wiped out in 24 hours.
There are no carnival emoticons of retail investors on social media, no get rich overnight screen swipes, only 13 ETF subscription orders from BlackRock every second rolling silently. This capital feast, known as the silent bull market, is profoundly changing the power structure of the cryptocurrency market.
1. Institutional entry: a carefully planned power transfer
The cryptocurrency market is undergoing an unprecedented reconstruction of capital power, and institutional investors have taken over market dominance through systematic layout.
Custody breaks the ice: Traditional financial giants such as BlackRock and Fidelity have taken the lead in breaking through regulatory barriers and establishing compliant custody channels. BlackRocks iShares Bitcoin Trust alone has managed assets exceeding US$80 billion and holds more than 700,000 BTC. The entry of these financial aircraft carriers has opened the floodgates for subsequent capital influxes.
Product matrix expansion: Bitcoin spot ETF is just the starting point. It is followed by futures ETF, leveraged ETF, Bitcoin mortgage and other structured products, forming a complete institutional investment toolbox. When Metaplanet, a Japanese listed company, increased its holdings of 797 Bitcoins in a single day, with a total holding of 16,352 Bitcoins, the corporate balance sheet revolution has quietly taken place.
Wave of asset restructuring: Cryptocurrencies are being reclassified as strategic reserve assets. MicroStrategys holdings exceeded 528,000 coins, worth $35.63 billion; the German central bank even began to sell gold and hold Bitcoin. This asset restructuring pushed the exchanges Bitcoin inventory to a five-year low, and the supply and demand relationship was completely reversed.
2. Marginalization of retail investors: Capital games within high walls
As institutions take center stage, ordinary investors find themselves squeezed out of the party. Data shows that the proportion of large transactions exceeding $100,000 per transaction soared to 89%, an increase of 23 percentage points from 2022.
The market structure has changed fundamentally:
Volatility decreased but liquidations became more concentrated: Although Bitcoin has increased by more than 40% in three months, the 5% single-day drop on July 15 caused 135,800 liquidations and 3.54 billion yuan of wealth to evaporate. 80% of the liquidation losses came from long orders, and high-leverage retail investors became the primary victims of market volatility.
Wall Street’s pricing power monopoly: The coexistence of exchange inventory shortage and the increase in whale addresses (there are 2,135 addresses holding more than 1,000 BTC), indicates that institutions complete large transactions through over-the-counter (OTC) counters to bypass the deep influence of the open market. When BlackRock continues to inject $380 million into the market every day, retail orders have become market noise.
Psychological threshold and data gap: After Bitcoin broke through $120,000, Google search popularity was only 45, less than 1/3 of the peak when it first broke $100,000 in November 2024; the fear and greed index was 73, far below the historical peak. The lament of Japanese retail investors, One coin costs $110,000? Ive missed it! reveals the collective powerlessness of retail investors around the world.
3. Hidden risks: cracks under the feast
Rather than eliminating risks, institutionalization has given rise to new types of systemic threats.
Stablecoins have become a dual focus of regulation and crime:
The Hong Kong Stablecoin Ordinance came into effect on August 1, requiring 100% of reserve assets to be stored in isolation; the US GENIUS Act requires the ability to freeze the tokens involved within 10 minutes. However, in cross-border money laundering cases, a single criminal controls more than 200 wallet addresses to disperse funds, and the traditional risk control system is useless.
The amount of money involved in illegal exchange of virtual currencies is staggering - a case in Shanghai involved 6.5 billion yuan in cross-border arbitrage. Tether (USDT) has become a counter-trading tool, and criminal gangs have built a profiteering model through high fees of 1%-3% and two-way arbitrage strategies.
Regulatory arbitrage of pseudo-decentralized protocols is even more covert. Some projects, under the banner of compliance, actually issue unregulated stablecoins through offshore shell companies; technical loopholes occur frequently, and in Q2 2025, the Wormhole cross-chain bridge lost $180 million due to failed signature verification.
4. New risk pattern: fatal trap of institutionalized market
The flash crash of Kinto tokens has become the best risk footnote for the institutional market. On July 10, the project was hacked due to a contract vulnerability, and the price plummeted by 90%, with the market value evaporating to less than $2 million. This precision sniping exposed a new risk form.
The gross profit margin of mining machine giant Canaan Technology dropped sharply from 42% to 29%, and the high computing power competition eroded the safety cushion. Tether issued 4 billion USDT in a single week, the stablecoin supply growth rate (SSR) exceeded 1.2, and the perpetual contract funding rate rose to the highest point of the year - behind these figures is the silent accumulation of leverage bubbles.
When $3.7 billion in option contracts gathered at the $125,000 mark, a long-short duel was imminent. Institutional investors took advantage of derivatives tools and hedging strategies, while retail investors were forced out of the game of high leverage.
The institutionalization wave has reshaped the rules of the game: the volatility curve has been flattened, the price discovery mechanism has been monopolized by over-the-counter transactions, and even market sentiment has been redefined by institutional position reports. When the German central bank exchanged gold for Bitcoin, and when listed companies financial reports listed crypto assets as strategic reserves, the utopian narrative of blockchain has completely given way to the balance sheet revolution. Cryptocurrency no longer subverts traditional finance, it has become the sharpest new weapon of traditional finance.
