A Renewed Wave of Optimism
A fresh sense of optimism has returned to the Bitcoin market, driven in large part by visible progress on the Clarity Act in Congress. After what has been one of the most heated points of contention between the banking industry and the crypto industry, the Senate appears to have reached a workable agreement on how to treat stablecoin rewards. The compromise draws a meaningful line: holders cannot receive a reward simply for parking a stablecoin in their account — a structure that would have too closely resembled earning interest on a deposit. Rewards instead become available when stablecoins are actively used. This is a fair middle ground that respects both the regulatory concerns of traditional finance and the functional aspirations of crypto, and it provides a credible path for legislation to move forward.
Institutional Adoption Reignites the Narrative
Beyond legislative progress, the institutional adoption narrative has been reignited over the past few months. Charles Schwab has drawn headlines with its plan to launch spot trading this year, and several other firms have followed with announcements of their own. New spot ETP launches have added to the momentum. This matters because the crypto market is, at its core, a momentum-driven market, and narratives carry disproportionate weight in momentum-driven investing. When the storyline shifts toward broader access and institutional legitimacy, capital tends to follow.
Technicals and the Question of Cost-Basis Resistance
The technical picture has improved alongside the narrative shift. Bitcoin has crossed both the 50-day and 100-day moving averages and is moving toward the 200-day. That is encouraging, but it is worth looking past conventional technicals to identify more fundamental zones of resistance.
One of the unique advantages of analyzing Bitcoin is that the blockchain provides a real-time record of every transaction — something simply not possible for most other asset classes. From this data, two cost-basis measures stand out:
- Active investor cost basis — the average cost basis for any participant who has purchased Bitcoin in a secondary market, excluding coins awarded to miners for validating the blockchain. This currently sits around $78,000.
- ETF cost basis — the average price at which the ETFs themselves acquired their Bitcoin. This sits around $82,000.
Investors who bought near these levels roughly a year ago and then endured a sharp sell-off are plausibly more inclined to sell as price approaches them again. That makes this zone something more than a moving-average ceiling — it is a fundamental band of congestion. Whether the market pushes through depends on whether the momentum from a Clarity Act passage this summer is strong enough to absorb that supply. If it does, a broader rally into year-end becomes a reasonable expectation.
Why the $126,000 to $200,000 Forecasts Look Stretched
Some Wall Street banks have published forecasts ranging from $126,000 to $200,000 and beyond. While the directional case is plausible, those numbers appear overly optimistic in the near term. A more grounded short-term valuation framework anchors Bitcoin's price to the cost of producing it. Miners with higher energy costs or less efficient ASIC fleets currently produce Bitcoin at roughly $95,000 per coin. They are underwater at present prices, and many have temporarily shut down operations because Bitcoin is trading below their production cost.
Historically, in past bear-market recoveries, this production-cost level has acted as a meaningful level of support on the way up — and it can take a long time to break above it. After the 2018 bear market, it took roughly 30 months. After 2022, it took about 12. The $95,000 level should therefore be viewed as the next genuine fundamental resistance, and clearing it is a prerequisite for anything resembling the higher targets being floated. If the market does break through, that opens the door to a more sustained recovery, but the path is unlikely to be quick.
The Long-Term Driver: Money Supply
Pulling back from technicals, the dominant long-term driver of Bitcoin remains growth in money supply. This is worth tracking on both a global basis and within the United States, where US M2 growth is the primary signal. Bitcoin's behavior as a monetary asset has been most coherent when viewed through this lens, and that framing gives a more durable foundation for thinking about the asset than chart patterns alone.
Why Bitcoin Stands Above the Rest of Crypto
Across past recoveries, Bitcoin has consistently outperformed other cryptocurrencies coming out of steep bear markets. It is the largest, the original, and holds the leading market share among store-of-value cryptocurrencies. Altcoins typically need more time before investors begin buying them again or returning to use their platforms. A favorable view of Bitcoin relative to the rest of the crypto market cap is therefore well-supported by both fundamentals and historical patterns.
Ethereum: A Neutral View
Ethereum warrants a neutral stance. It remains the largest smart contract platform by assets deposited and is the original of its kind. Looking at actual on-chain activity in 2025, however, refines the picture: about half of Ethereum's usage came from stablecoins, around 20% from liquid staking, and another 20% from lending and liquidity solutions, with the balance from trading and infrastructure. That is a meaningful utility profile, even if it is more concentrated in financial primitives than many would assume.
Solana: Less Favorable
Solana presents a different mix. The majority of activity on Solana comes from a combination of stablecoin transactions and speculative or meme trading. The utility profile of Ethereum is, on balance, broader than what Solana has historically demonstrated. Solana also sold off more sharply during the recent downturn — unsurprising given that it is newer and remains a more emerging blockchain compared to Ethereum. These factors together justify a less favorable stance.
XRP: Less Favorable
XRP is one of the older cryptocurrencies but is currently working through a fundamental identity question: is it positioned as a competitor to Bitcoin, or is it pivoting toward being a smart contract platform and a competitor to Ethereum or Solana? That unresolved transformation, combined with its more speculative use case, makes it harder to underwrite versus the rest of the crypto cap.
Putting It Together
The current environment offers a coherent setup. Legislative progress is removing a key overhang, institutional adoption is providing a fresh narrative tailwind, and technicals are improving. Yet two real walls stand in the way of the most aggressive forecasts: the active investor and ETF cost-basis cluster around $78,000–$82,000, and the higher-cost miner production threshold near $95,000. Past cycles suggest the second of these can take a year or more to clear after a bear market.
For investors thinking about how to position into a recovery, the historical playbook is clear. Bitcoin tends to lead, supported by money-supply growth and its store-of-value status. Altcoins recover more slowly, and within them, fundamentals — utility profile, maturity, and clarity of purpose — separate the more defensible names from the more speculative ones. A dream of spring is reasonable; expecting it to arrive overnight is not.