Bitcoin drops to $77,500: Where should investors go?

Bitcoin fell back to US$77,500 after breaking through US$81,000, and the market's upward momentum was tested again.

Bitcoin (BTC) fell back to around US$77,500 after breaking through US$81,000. This trend has once again triggered market discussions on whether the upward momentum of cryptocurrencies is strong enough. Yesterday's market was not unique to Bitcoin-cryptocurrency-related stocks, Ethereum, Circle, Strategy and Solana all showed significant gains. However, today's correction suggests that markets remain highly sensitive to macroeconomic dynamics and capital conditions. In particular, the U.S. Treasury's bond repurchase program, the growth of stablecoins and the bitcoin strategy held by companies have become key factors behind this round of rebound.

Why did Bitcoin fall back from US$80,000?

After Bitcoin exceeded US$80,000, it set off a strong rising wave among cryptocurrency companies. Mining companies and companies with digital assets on their balance sheets posted double-digit gains, while shares of companies such as Coinbase and Robinhood also rose. Among yesterday's gains, Bitcoin rose more than 23% weekly, while Ethereum rose about 30% to exceed $2500. Bitcoin fell back to $77,500 today, indicating that investors tend to take profits after rising. One of the main reasons is also related to Kevin Walsh's partially hawkish speech at the Jackson Hole conference.

The U.S. Treasury Department plans to increase the limit on partial repurchase operations of long-term bonds to at least US$4 billion, a move that has become an important driving force for rising market risk appetite. Lower bond yields make it easier for investors to switch to Bitcoin and other risky assets.

Circle and USDC usher in a new wave of growth?

The stablecoin market is one of the key components of the recovery of the cryptocurrency industry. Bernstein analysts believe the Circle-issued USDC could enter a new round of growth and become a major catalyst for the company over the next 12 months. USDC supply increased by approximately $2 billion in just seven days, ending nearly six months of stagnation or decline and signaling that Circle growth is accelerating again.

Bernstein maintains an "outperform" rating on Circle shares and sets a price target of $140. This goal represents about 60% room for upside compared to current levels. USDC's share of adjusted trading volume will be approximately 40% in 2025, but will rise to more than 60% in 2026, thus surpassing Tether's USDt on this indicator.

Is the real risk of Strategy Bitcoin?

Strategy, led by Michael Siler, has become one of the most watched companies in the cryptocurrency market with its Bitcoin hoarding strategy. However, analysis by Regime Intelligence shows that the main risk facing the company is not the bitcoin price itself, but the disruption of capital market financing channels. Strategy currently holds 840,447 BTC assets, which support approximately $22 billion in debt and preferred equity, but the company has no margin call obligations linked to the price of Bitcoin.

The company's annual debt is approximately US$1.76 billion. In addition, its bitcoin asset cost base worth $66.7 billion is $63.36 billion, and its cash reserves are equivalent to 2.6 times annual liabilities. Stress tests showed that even if the price of Bitcoin fell by 96%, it would not completely prevent the company's BTC holdings from covering convertible bonds. Still, a long-term decline in Bitcoin could cause Strategy's share price to fall and the mNAV ratio to fall, making it more difficult for it to raise new capital.

Why is Solana in the spotlight again?

Solana is also one of the projects where online activity and price performance have increased simultaneously. The network set a record of 4.2 billion on-chain transactions in July, before SOL rose about 40% to exceed $100 for the first time since February. Trading volume in July increased by 13.5% from June and 91% from December, with approximately 2 billion new transactions added during the same period. The value of tokenized real-world assets on Solana also reached approximately US$4 billion, an increase of 11.8% in the past month, while the total value of tokenized real-world assets on tracked networks has exceeded US$38 billion.

What do you care about in the Bitcoin market?

Today's level of US$77,500 is the key to judging whether Bitcoin can maintain momentum after yesterday's strong rise. In addition, investors need to pay attention not only to BTC prices, but also to bond yields, stablecoin supply, capital market liquidity and on-chain activities. The latest trends in the cryptocurrency market show that the connection between Bitcoin and the traditional financial system has become extremely close. Recovering $80,000 could strengthen upward momentum, while increased selling pressure at current levels could deepen the short-term correction.

This content absolutely does not constitute investment advice. Markets have high risks, so please conduct independent research before making investment decisions.