Bitcoin’s breakout from its recent trading range was more likely driven by positive U.S. regulatory developments than by macroeconomic debasement concerns, Citi analysts said. They pointed to the lag between the Treasury’s buyback announcement and Bitcoin’s price response, as well as ether’s faster gains, as evidence that the digital-gold narrative was not the main catalyst. Citi said the key issue is whether renewed optimism reverses the stall in Bitcoin ETF inflows that followed last October’s liquidations. A recovery in flows over the next month would suggest investors recognize a favorable regulatory backdrop, even without certainty over market-structure legislation. Citi’s base case assumes no net ETF flows and highlights longer-term uncertainty over value accrual if activity shifts to private blockchains. Ault Blockchain founder Todd Ault said President Trump’s support for the CLARITY Act shows the market is beginning to grasp the significance of the moment for crypto in the United States. Bernstein separately attributed Bitcoin’s strong trigger to the Treasury’s buyback of longer-dated bonds. Analyst Gautam Chhugani said tighter markets after the Iran conflict and a strong AI and semiconductor trade had previously drawn liquidity away from crypto, but that debt-funded AI capital expenditure could eventually expand liquidity toward Bitcoin as a hedge. He said regulatory clarity from the SEC (U.S. securities regulator) and CFTC (U.S. derivatives regulator) would remain in place with or without the CLARITY Act, which is due for a September 15 vote. Ether outperformed Bitcoin because of its broader exposure to stablecoins, tokenization and real-world asset adoption, Chhugani said. Bitcoin ETF outflows have stabilized after peaking near $7 billion, or about 10% of assets under management, between May and June. Inflows reached $1.1 billion through August 20, taking total assets above $85 billion from $70 billion in June. Bernstein said Strategy’s balance sheet had stabilized, with cash reserves covering 2.8 years of dividend payments. The company sold 0.8% of its total Bitcoin holdings to support STRC buybacks, and Bernstein expects it to resume purchases as STRC’s nominal value approaches $100.