MW Five longer-term takeaways from the latest bitcoin rally, according to Deutsche Bank

By Jules Rimmer

Bitcoin's rally which took the cryptocurrency past $123,000 and up 75% from November's levels had some under-the-radar features that show its increased integration into the financial system.

Deutsche Bank analysts Marion Laboure and Camilla Siazon highlighted a series of important but perhaps less eye-catching developments that "suggest bitcoin's integration into portfolios is maturing and potentially signals a more sustainable trend" in a note entitled "Our five key takeaways from the rally." These dovetail neatly with the rising anticipation generated by the Crypto Week legislative proposals. Moreover, these positives are coinciding with a decline in volatility levels, likely to attract institutional investors for whom extreme volatility had hitherto been a deterrent.

The chief pillar of support is the new regulatory environment, the analysts say, with a presidential working group established to create a bitcoin strategic reserve and digital asset stockpile. The Securities and Exchange Commission and the Office of the Comptroller of the Currency have both reversed their skepticism towards crypto, facilitating the Genius Bill and the Clarity Act legislation currently going through the House of Representatives.

Next, Laboure and Siazon cite the immense inflows that bitcoin is attracting with the $50 billion flood so far in 2025 already way in excess of 2024's $35 billion. It holds up as an example BlackRock's iShares bitcoin trust IBIT , launched in January 2024 which holds $80 billion already whereas the largest gold ETF, the SPDR Gold Shares GLD , took fifteen years to reach the same level. The impact of these inflows was accentuated by bitcoin's "halving" last year that reduced new bitcoin issuance by 50%, tightening supply-demand dynamics.

Another game-changing development has been the mainstream adoption of bitcoin whereby corporate treasuries started accumulating it to turbocharge the profitability of their reserves. The approval of bitcoin ETFs in January 2024 and recent crypto regulation has enabled institutions to build exposure to bitcoin that wasn't permissible before. Institutions tend to be longer-term holders than retail investors and this helps reduce volatility at the same time.

Bitcoin was also able to derive additional impetus from the de-dollarization DXY trend witnessed in markets since the "Liberation Day" announcement of April 2. Markets anticipate reduced international allocations to U.S. assets and reduced dollar usage in global trade owing to tariffs and so investors have sought out alternatives to the dollar and central banks have diversified their reserves. Ukraine has bought 46,351 bitcoins since its war with Russia began, for instance, as Czechia is contemplating their incorporation into reserves and countries like Bhutan and El Salvador already do.

Lastly, Deutsche Bank describes recent technological developments and progress in the crypto eco-system that have helped scalability, while speeding up transactions and improving their security in the process. Institutions like State Street and BNY Mellon have launched or expanded banking solutions to accommodate crypto custody and the lasting effect here is to broaden the range of users and applications.

-Jules Rimmer

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July 17, 2025 09:40 ET (13:40 GMT)

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