Bitcoin has rocketed higher in recent weeks, adding 30% since dropping to lows of $60,000 per bitcoin, as traders brace for an Elon Musk game-changer.
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The bitcoin price rally, taking some by surprise after warnings that a bitcoin nightmare is suddenly coming true, comes after the combined bitcoin market capitalization crashed by more than $1 trillion in just three months.
Now, as a former Federal Reserve chair issues a shock “hyperinflation” warning to the U.S. dollar, Strategy founder Michael Saylor has declared the bitcoin winter that’s wiped more than 60% from the value of his company is “over.”
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"Winter’s over," Saylor posted to X, referring to what are seen as cyclical bitcoin and crypto market booms and busts, alongside a Game of Thrones-style AI generated image
Saylor’s Strategy, which this week announced it now holds more than 800,000 bitcoin, has topped BlackRock’s IBIT bitcoin fund as the largest institutional bitcoin holder for the first time since the second quarter of 2024 with its $2.5 billion 34,000 bitcoin purchase, its third-largest on record.
However, Strategy’s stock, closely tied to the bitcoin price, remains down by around 60% since hitting an all-time high in July last year.
Earlier this month, Strategy moved back into profit on its $63 billion worth of bitcoin for the first time since February, though many smaller bitcoin treasury companies remain deeply in the red.
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Meanwhile, traders and analysts are trying to divine what the current cycle dynamics mean for the bitcoin price in the future.
"Prior downturns were painful, but venture capital kept deploying," Benoît Bosc, cofounder at bitcoin and crypto market consultancy x2B, said in an emailed note.
“The trough of one cycle was where the next was being seeded. The 2018 winter produced the 2020 DeFi cohort. The 2022 crash produced the 2024 infrastructure layer. That mechanism seems broken this time around.”
Pointing to Saylor “making media rounds again,” Bosc warned that bitcoin’s “’comeback kid’ dynamic is active but that comeback is happening because macro permits it, very different from crypto leading on its own merits.”
According to Bosc, bitcoin and ethereum “continue to behave as high-beta expressions of global liquidity, not as hedges, and not 'digital gold,’ a narrative that keeps losing practical ground every time it is tested.”