Whereas past bull runs in 2017 and 2021 were driven by ICOs and insatiable demand for NFTs, the current cycle has been dominated by a new narrative: the arrival of institutional demand.
And according to Xu Han, a partner at HashKey Capital, sophisticated investors tend to do things differently to their retail counterparts — giving them a crucial edge as they attempt to capitalize on market movements. In an exclusive interview with Cryptonews, he said:
“Institutional allocators are no longer just taking long exposure — they’re employing complex strategies such as ETF basis trading, staking arbitrage, and wrapped BTC deployments across DeFi.”
Bitcoin was once regarded as a passive asset, but that’s beginning to change as BTCFi platforms offer yield-generating strategies, enabling crypto holdings to grow incrementally over time.
“We’re also seeing a clear prioritization of regulatory clarity: institutions prefer assets and products that fit into compliant custody, ETF wrappers, or licensed platforms.”
Xu also argues that “a growing reliance on on-chain metrics” sets sophisticated investors apart from the rest of the pack — and the data they’re interested in extends well beyond sentiment, with intelligence surrounding “capital flows, protocol revenue and wallet cohort behavior” also monitored.
“In short, the sophistication of investor behavior is catching up to the complexity of the asset class itself.”
‘The Bull Run Isn’t Over’
During the Cryptonews interview, Xu argued that there’s “compelling evidence that the crypto cycle is still in a growth phase,” with the dollar expected to depreciate against major fiat currencies by up to 10% in the coming 12 to 24 months.
“Another key factor is the anticipated policy shift by the Federal Reserve — rate cuts and the wind-down of quantitative tightening are expected to inject fresh liquidity into markets. Historically, crypto has responded positively to such shifts.”
On-chain data also indicates there’s lower selling pressure from longer-term holders, while short-term traders are repositioning.
“These behavioral shifts, combined with still-strong ETF inflows, suggest we haven’t yet reached the speculative peak that usually characterizes the later stages of a bull market. If anything, the underlying fundamentals today are stronger than in previous cycles, which would be evidenced by the growing number of Bitcoin treasury companies inspired by MicroStrategy’s success.”
Xu went on to reveal that HashKey Capital believes there’s “a plausible trajectory where Bitcoin could reach the $1 million mark” by 2035.
“It’s clear that the institutional embrace of Bitcoin’s role as a digital store of value will continue gaining momentum, especially as portfolio integration accelerates across traditional finance. Our central thesis projects Bitcoin’s market capitalization could eventually match that of investable gold — comprising physical bars, coins, and ETF holdings — over the coming decade.”
Zooming back into the current bull market, Xu conceded that it’s been a “soft” second quarter for altcoins — but select names could be gearing up for a “strong performance” in Q3.
“Ethereum’s fundamentals remain solid: it still hosts the majority of tokenized assets and smart contract activity. Although its ETH/BTC ratio has declined, we interpret that as a result of ETF capital concentration in Bitcoin rather than a loss of utility.”
The crypto analyst noted that Solana has also demonstrated “impressive traction” — especially considering it has achieved mainstream integrations with the likes of Strike and PayPal — and continues to capture DeFi activity.
“Meanwhile, liquid staking and restaking protocols like Lido and EigenLayer offer a unique yield layer that institutional allocators increasingly recognize. These assets tend to act as high-beta amplifiers in the late stages of crypto rallies, and their yield dynamics provide additional upside in risk-on environments.”
The bullish predictions come against a backdrop of renewed economic uncertainty — first driven by Donald Trump’s tariffs on Liberation Day, and latterly exacerbated by growing tensions in the Middle East.
YouHolder risk manager Andrejs Balans told Cryptonews that recent developments led to more than $1 billion in leveraged positions being liquidated — and bullish traders were hit hardest because they were unprepared.
“This weekend’s events demonstrate that, while crypto is decentralized in structure, it remains deeply influenced by global politics and investor psychology. For those in the market, adapting to a world of sudden shocks may be just as important as spotting the next big opportunity. In the near term, we can expect continued volatility.”
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