Macro-Fueled Rally: Bitcoin's Surge Lacks Genuine Demand

Bitcoin's recent price surge toward $65,000 is largely driven by macroeconomic factors rather than genuine demand for the cryptocurrency itself, according to Bitfinex analysts. The soft June inflation print reduced the likelihood of a July rate hike from 42% to 12%, causing the two-year Treasury yield to fall by 14 basis points. This move was mirrored in other risk assets like equities.

However, despite the price increase, there is no indication of significant bitcoin demand on its own. U.S. spot ETFs sold around $425 million on July 13, the day before the inflation print, and the Coinbase premium remains negative, suggesting a lack of institutional buying interest.

The analysts describe this situation as 'borrowed strength,' where a rally is driven by external factors rather than genuine demand. In previous bitcoin uptrends, there has been a steady bid regardless of price. Without such support, the current rally may be unsustainable in the long term.