Original author: Tiger Research

Original translation: AididiaoJP, Foresight News

summary:

• Bitcoin's institutional adoption accelerates: US 401(k) investment channels open, ETFs and corporate entities continue to accumulate on a large scale
• The best environment since 2021: global liquidity is at a historical high and major countries are in interest rate cutting mode
• From retail-led to institutional-led market: Despite signs of overheating, institutional buying strongly supports downside risks.

Global liquidity expansion, institutional accumulation, and regulatory tailwinds drive Bitcoin adoption

Three core drivers are currently driving the Bitcoin market: 1) expanding global liquidity, 2) accelerating institutional capital inflows, and 3) a crypto-friendly regulatory environment. These three factors, working in concert, have created the strongest upward momentum since the 2021 bull run. Bitcoin is up approximately 80% year-over-year. In the near to medium term, there are limited factors that could derail this upward momentum.

In terms of global liquidity, one key point that stands out is that the M2 money supply in major economies has exceeded $90 trillion, a record high. Historically, M2 growth rates and Bitcoin prices have shown similar directional patterns, and if the current monetary expansion continues, there is still room for further appreciation (Chart 1).

Additionally, President Trump’s pressure for rate cuts and the Federal Reserve’s dovish stance have opened up avenues for excess liquidity to flow into alternative assets, with Bitcoin being the primary beneficiary.

Meanwhile, institutional accumulation of Bitcoin is proceeding at an unprecedented pace. US spot ETFs hold 1.3 million BTC, approximately 6% of the total supply, while Strategy (MSTR) alone holds 629,376 BTC (valued at $71.2 billion). Crucially, these purchases represent a structured strategy, not a one-off trade. Strategy's continued purchases, through the issuance of convertible bonds, in particular, signal the formation of a new layer of demand.

Furthermore, the Trump administration's executive order issued on August 7th represents a game-changer. Opening Bitcoin investment to 401(k) retirement accounts potentially exposes an $8.9 trillion capital pool. Even a conservative 1% allocation would represent $89 billion, roughly 4% of Bitcoin's current market capitalization. Given the long-term holding nature of 401(k) funds, this development should not only contribute to price appreciation but also reduce volatility. This marks a clear shift for Bitcoin from a speculative asset to a core institutional holding.

Institutions drive trading volumes, retail activity fades

The Bitcoin network is currently reorganizing around large investors. The average daily transaction count fell 41% from 660,000 in October 2024 to 388,000 in March 2025, yet the amount of Bitcoin transferred per transaction actually increased. The growing number of large transactions from institutions like Strategy has increased the average transaction size. This signals a shift in the Bitcoin network from a "small, high-frequency" to a "large, low-frequency" transaction model (Figure 2).

However, fundamental indicators show uneven growth. While institutional restructuring has clearly boosted Bitcoin’s network value, transaction counts and active users have yet to recover (Chart 3).

Improving fundamentals will require activating the ecosystem through BTCFi (decentralized financial services based on Bitcoin) and other initiatives, but these are still in the early stages of development and will take time to have a meaningful impact.

Overbought, but institutions provide bottom support

On-chain indicators show some signs of overheating, but significant downside risk remains limited. The MVRV-Z indicator, which measures current prices relative to investors’ average cost basis, is in overheated territory at 2.49 and recently spiked to 2.7, warning of a possible near-term pullback (Chart 4).

However, both aSOPR (1.019, tracking investors’ realized profits and losses) and NUPL (0.558, measuring the market’s overall unrealized profits and losses) remained in stable territory, indicating an overall healthy market (Charts 5, 6).

In short, while current prices are high relative to the average cost basis (MVRV-Z), actual selling is occurring at modest profit levels (aSOPR), and the market as a whole has not yet reached excess profit territory (NUPL).

Supporting this dynamic is institutional buying. Continued accumulation from ETFs and Strategy entities is providing solid price support. A short-term pullback is possible, but a trend reversal seems unlikely.

Target price: $190,000, potential upside: 67%

Our TVM (Time Value Model) approach derives our $190,000 price target using the following framework: We establish a base price of $135,000 (removing extreme fear and greed from the current price) and then apply a +3.5% fundamental multiplier and a +35% macro multiplier.

The fundamental multiplier reflects improvements in network quality: higher transaction value despite fewer transactions. The macro multiplier captures three powerful forces: expanding global liquidity (e.g., M2 exceeding $90 trillion), accelerating institutional adoption (e.g., ETFs holding 1.3 million BTC), and an improving regulatory environment (e.g., 401(k) eligibility opening up a $8.9 trillion pool of capital).

From current levels, this implies a 67% upside potential. While the target is aggressive, it reflects the structural changes taking place in Bitcoin as it transitions from a speculative asset to an institutional portfolio allocation.