Bitcoin dances to new highs with US stocks, indicating what kind of new financial normal?

Written by: Luke, Mars Finance

Symphony of Contradictions

In the summer of 2025, the financial markets are staging a dazzling duet. On one hand, there is a carnival of risk assets. Bitcoin broke through $112,000 on July 9, setting a new high since May. Meanwhile, across the ocean on Wall Street, the Nasdaq Composite Index, led by tech giants like Nvidia, is also hitting historical highs repeatedly, and market sentiment is soaring. This resounding melody seems to herald the arrival of an “Everything Rally” era.

However, in this prosperous B-side, there lurks a completely opposite low mournful song. The alarm bells of the U.S. national debt are ringing louder and louder, with the total having already surpassed $36 trillion. The predictions from the Congressional Budget Office (CBO) are even more alarming: by 2035, the federal debt will account for 118% of GDP, with an annual fiscal deficit reaching $1.9 trillion. Meanwhile, the U.S. trade deficit continues to expand, having reached $71.5 billion in May 2025, highlighting its severe dependence on external capital.

This seemingly contradictory picture makes the clamor of the market sound a bit harsh. The warning from JPMorgan Chase CEO Jamie Dimon is still ringing in our ears; he has repeatedly stated that due to excessive government spending, the U.S. bond market “will experience a crisis”—it’s not a question of whether it will happen, but when it will happen.

So, how should we understand this grand ball on the edge of the cliff? Is the market’s revelry an irrational bubble that ignores risks, or is there a deeper logic at play? The answer may well be hidden within the contradiction itself. This magnificent rise is not a sign of the market’s ignorance of the debt crisis, but rather its most profound and forward-looking response. Capital is voting with its feet, staging a massive “safe-haven” migration—fleeing from assets destined to be diluted and flocking to the “Noah’s Ark” that is believed to withstand the storm. This is not a paradox, but a necessary prelude to the restructuring of market logic during the transition between the old and new orders.

The Anatomy of the Rise: The Story of the Double Carnival

The essence of this round of increase is not simply a coincidence, but rather the result of a deep resonance between capital, narratives, and technological trends. The underlying forces driving Bitcoin and tech stocks to strengthen simultaneously reveal that profound structural changes are occurring in the market.

The symbiosis of technology and cryptocurrency

In recent years, Bitcoin and tech stocks, especially the Nasdaq 100 Index, have shown an unprecedented symbiotic relationship. According to research from the Chicago Mercantile Exchange Group (CME Group), since 2020, the correlation between Bitcoin and U.S. stocks has shifted from “uncorrelated” to a significant positive correlation, particularly during times of market stress, indicating that Bitcoin is exhibiting characteristics similar to those of equities.

The current round of increases has further pushed this symbiotic relationship to its extreme. The explosive growth of the artificial intelligence (AI) sector, led by Nvidia, has injected a strong risk appetite into the entire market, and this “spillover effect” of sentiment has directly transmitted to the cryptocurrency market. In the eyes of investors, Bitcoin is no longer merely “digital gold”; it has been classified alongside AI and semiconductors in the same investment portfolio—“future-driven assets.” They share a similar narrative: a belief in technological breakthroughs, high expectations for future growth, and a desire to explore new frontiers as traditional economic models show signs of fatigue.

This shift in perception is underpinned by a profound change in the structure of investors. With traditional financial giants like BlackRock launching Bitcoin spot ETFs, a solid barrier has been broken. Traditional stock investors can now easily incorporate Bitcoin into their asset allocation, just like purchasing a tech stock. They have transferred their familiar logic of U.S. stock investment—chasing growth, embracing volatility, betting on the future—into the crypto world. Therefore, when they are optimistic about the future of technology, it is natural for them to also be optimistic about Bitcoin as a native asset of the digital age. This explains why the prices of crypto-related stocks, such as Coinbase (COIN), resonate in sync with Bitcoin and tech stocks. The narrative of Bitcoin is quietly evolving from a mere “store of value” that resists inflation to a “tech growth stock” with a high beta coefficient, attracting the same group of investors seeking excess returns (Alpha).

The institution’s dash

If the enthusiasm of retail investors and technology enthusiasts ignited the first spark of Bitcoin, the influx of institutional capital has completely pushed it toward an unstoppable momentum. This is no longer sporadic experimentation, but a structural and cross-industry strategic transformation.

BlackRock’s iShares Bitcoin Trust (IBIT) is undoubtedly the banner of this transformation. In just 18 months, IBIT has attracted over 700,000 bitcoins, with assets under management (AUM) exceeding $76 billion, making it one of the fastest-growing ETFs in financial history. The significance of this milestone goes far beyond the numbers; it represents the “official endorsement” of crypto assets by the world’s largest asset management company. As BlackRock CEO Larry Fink advocated in his 2025 annual letter to investors, the goal is to “democratize investing,” and the Bitcoin ETF is a perfect embodiment of this concept.

What is even more noteworthy is that this wave is spreading from the financial sector to the broader real economy. A number of traditionally diverse companies are now positioning Bitcoin as a core component of their balance sheets, marking the establishment of Bitcoin’s status as a “corporate reserve asset.”

This table clearly reveals a trend: whether it is Mexican real estate developers, Japanese chain hotels, or food groups operating across China and the U.S., they have all chosen Bitcoin. The reasons they provide in their respective public documents are surprisingly consistent: seeking an asset that can “resist inflation” and has “high liquidity” to optimize their balance sheets. The actions of these companies can be seen as a concrete manifestation of macroeconomic anxiety at the micro-enterprise level. They are not engaging in high-risk speculation, but rather searching for a more solid value anchor for themselves amidst increasing uncertainty in the global monetary system. This wave of corporate adoption provides the strongest fundamental support for this round of price increases.

The Shadow of Debt: Washington’s “Unconventional” Script

The market’s exuberance does not come out of nowhere; it casts a huge shadow behind it - the increasingly uncontrollable sovereign debt of the United States. As traditional solutions (tax increases, spending cuts) are politically difficult to implement, some policy options that were once considered “heretical” are quietly entering the discussion in Washington. Regardless of the form these potential scenarios ultimately take, they all point to the same conclusion: financial repression and currency devaluation.

A highly discussed concept is the so-called “Mar-a-Lago Accord.” This proposal, put forward by strategist Zoltan Pozsar and elaborated by current Chairman of the White House Council of Economic Advisers Stephen Miran, is seen as a modern unilateral version of the 1985 Plaza Accord. Its core objective is to force other countries to accept the depreciation of the dollar through high tariffs and threats to withdraw security protections, thereby revitalizing American manufacturing. More radical is the proposal’s envisioning of forcibly converting foreign-held U.S. Treasury bonds into century-long ultra-long bonds, which amounts to a form of “soft default” against foreign creditors.

If the “Mar-a-Lago Agreement” is mainly aimed at the outside world, then Deutsche Bank strategist George Saravelos’ “Pennsylvania Plan” turns its attention to the domestic front. The core idea of this plan is to “onshore” U.S. debt, that is, to reduce reliance on foreign buyers and instead allow domestic entities to absorb the new Treasury bonds. The means of realization are quite innovative: first, relaxing leverage regulations on large banks so they can hold more Treasury bonds; second, supporting the development of dollar stablecoins through legislation. Since regulated stablecoins are primarily backed by short-term U.S. Treasury bonds, a thriving stablecoin market will create a large and stable new source of demand for the U.S. government.

Whether it is external pressure or internal “digestion”, both scenarios convey a clear signal: the cornerstone status of US Treasury bonds as the “risk-free asset” of the world is being shaken. When ideas such as debt restructuring, forced conversion, and using cryptocurrency infrastructure for deficit financing have moved from the fringes into the purview of policy advisors, it signifies that the “Overton Window” of global finance has undergone a decisive shift. What was once unimaginable is now being placed on the table. This compels global capital to reassess risks and seek a true safe haven of value that is not influenced by a single sovereign will.

The Role of Bitcoin in the Grand Game

In this grand game of reshaping the global capital landscape, Bitcoin is playing an unprecedented key role. It is both a “digital lifeboat” for capital fleeing the old system and potentially, inadvertently, a “Trojan horse” for the old system to save itself.

Digital Lifeboat

When the credibility of the world’s number one reserve currency and its sovereign debt faces the risk of erosion, Bitcoin’s core attributes—absolute scarcity (a total of 21 million coins), a non-sovereign decentralized network, and global liquidity—make it a logical choice for institutional capital.

On-chain data provides strong evidence for this “hedging” logic. According to Glassnode data, the “Realized HODL Ratio” (RHODL Ratio), which measures the concentration of wealth among long-term holders, has risen to its highest point in this cycle. This indicates that the market is becoming more mature, short-term speculation is cooling down, and wealth is increasingly held by committed long-term investors, a structure that often serves as a healthy foundation for sustained market growth. Meanwhile, the MVRV ratio (Market Value to Realized Value ratio) has risen to 2.26, but there is still considerable room to reach the historical bull market peak of over 7.5, suggesting that the upward potential of this cycle is far from exhausted.

The maturation of the market is also accompanied by the “de-risking” of the regulatory environment. Washington plans to hold “Crypto Week” during the week of July 14, 2025, during which key legislation such as the “CLARITY Act” will be reviewed. This act aims to provide a clear regulatory framework for digital assets, such as subjecting certain crypto assets to the oversight of the Commodity Futures Trading Commission (CFTC), which will greatly reduce the compliance uncertainty faced by institutional investors.

A clear feedback loop is forming: regulated ETF products address institutional access and custody issues; a clear legislative framework eliminates compliance gray areas; and a solid on-chain holder structure enhances the intrinsic resilience of the assets. Together, these three factors are transforming Bitcoin from a fringe, high-risk alternative investment into an “institutional-grade” macro hedge tool that can be incorporated into mainstream portfolios.

Trojan Horse

However, there is another side to the story. In the conception of the “Pennsylvania Plan,” stablecoins play a subtle yet crucial role. This reveals a possibility: the U.S. government may have discovered that the crypto ecosystem could become a new tool for solving its debt problems.

The logic chain is very clear: the global stablecoin market, worth hundreds of billions of dollars, is primarily composed of dollar-pegged stablecoins, and the reserves backing these stablecoins are mainly high-liquidity short-term U.S. Treasury securities. This means that every transaction and every circulation in the crypto world indirectly provides financing for the U.S. fiscal deficit. As the global trillion-dollar crypto economy increasingly relies on stablecoins as its core medium of exchange, a huge, structural, and price-insensitive demand pool for U.S. Treasury securities is formed.

This could lead to an ironically symbiotic relationship: a crypto world that champions “decentralization” becoming one of the most important sources of funding for the world’s largest sovereign debtor. In this scenario, the U.S. government’s motivation may shift from suppressing or curbing cryptocurrencies to actively integrating them into regulation and “nurturing” their development in order to utilize this new financing channel more effectively. The upcoming “Crypto Week” and its related legislation may not only be aimed at protecting consumers but also at paving a compliant “canal” for this massive new pool of funds.

The script of the new era

We are standing at a historical crossroads. The synchronous new highs of Bitcoin and US stocks are not an irrational bubble, but rather the market pricing in a profound macro shift. This “everything is rising” duet is a grand reallocation by global capital as the old sovereign debt supercycle approaches its end.

The future script can no longer be summarized simply as a “bull market” or “bear market.” It will be a financial transition period filled with uncertainty and high volatility, yet containing structural opportunities. In this new script:

First of all, the actual value of fiat currencies represented by the US dollar and their sovereign debt will face continuous erosion pressure. This provides a long-term and strong tailwind for assets with absolute scarcity, such as Bitcoin.

Secondly, capital will continue to flow in two directions: one is “hard assets” like Bitcoin that possess value storage and non-sovereign attributes; the other is “productive assets” like top tech companies that have a strong moat and can generate growth that exceeds the inflation rate.

In the end, we will witness an increasingly complex and profound entanglement between the nation and the crypto ecosystem. Nations will attempt to leverage crypto technology to address challenges within their traditional frameworks, while the crypto world will seek its own positioning and development path in the game with sovereign states.

The old financial map is becoming obsolete, and a brand new era, with rules that have yet to be fully written, has begun. In this grand reshaping of the global financial architecture, Bitcoin is no longer a marginal spectator; it is being pushed to the center stage, playing an unprecedented core role. And this grand drama has only just begun.