Asia Crypto Snapshot: U.S. Invests Heavily, Germany Liquidates as BTC Remains Close to $119,000

Bitcoin Holds Near $119K as U.S. Demand Surges, But Market Froth Looms

Bitcoin (BTC) hovered near $119,500 on Monday, just shy of its recent all-time high above $120,000, driven by strong U.S. institutional inflows. However, signals from the derivatives market suggest traders should tread carefully.

CoinShares reported that U.S.-listed crypto investment products attracted an impressive $3.74 billion in inflows last week. In sharp contrast, German funds recorded outflows totaling $85.7 million, reflecting a widening gap in institutional sentiment across regions.

One indicator of this shifting landscape is Vanguard’s evolving relationship with crypto. Previously dismissing bitcoin as an “immature asset class,” the $10 trillion asset manager has now emerged as the largest shareholder in Michael Saylor’s MicroStrategy (MSTR), indirectly becoming a major bitcoin stakeholder in traditional finance, as highlighted in Presto Research’s market update.

Institutional momentum is still strong overall, with QCP Capital pointing out more than $2 billion in net inflows into spot bitcoin ETFs last week alone.

Yet, the derivatives market is flashing caution. Funding rates on BTC perpetual futures are pushing close to 30%, while open interest has surged above $43 billion—levels last seen in January when bitcoin crossed the $100,000 mark. QCP warned that this crowded positioning could set the stage for a sharp pullback, recalling February’s sudden $2 billion liquidation event.

“Froth is building,” QCP cautioned in its latest note.

Bitcoin Leaves Luxury Watches Behind

So far in 2025, bitcoin has climbed 27.87%, including a 13.22% gain over the past month, far outpacing the luxury watch market, which posted a modest 4.5% rebound in the second quarter, according to a report co-authored by Morgan Stanley and WatchCharts.

Gains in watches were mainly concentrated in iconic models like the Daytona, Nautilus, and Royal Oak, while brands such as Panerai, Breitling, and IWC lagged behind. Watches priced below $5,000 continue to see excess inventory and slow dealer turnover.

“The price recovery remains narrow and concentrated,” the report noted, citing “renewed interest from high-end collectors and improved global risk appetite.”

Historically, both bitcoin and luxury watches have benefitted from loose monetary policy and periods of rapid wealth growth. But speculative capital has increasingly shifted toward bitcoin, fueled by institutional participation and the asset’s round-the-clock trading nature.

The correlation between BTC and luxury watches, both of which rallied during the pandemic-era liquidity boom, faded in late 2023 following the launch of U.S. spot bitcoin ETFs. Since then, bitcoin has transformed into a macro-sensitive asset with significant institutional adoption, while watches have largely returned to their roots as high-end fashion statements.

Market Snapshot

• BTC: Bitcoin touched highs near $123,000 before pulling back slightly. Crypto-linked stocks held onto modest gains. Analysts remain optimistic, with some projecting bitcoin’s $2.5 trillion market cap could eventually move closer to gold’s $22 trillion valuation.
• ETH: Ether rose above $3,079 in early trading before easing back to around $3,011, maintaining key technical support above the $3,000 level in a classic breakout-pullback formation.
• Gold: Gold slipped 0.1% after reaching a three-week high, as traders weighed renewed trade tensions from President Trump and awaited U.S. economic data. Silver, meanwhile, surged to its highest level since September 2011.
• Nikkei 225: Asia-Pacific markets were mixed on Tuesday. Investors largely shrugged off Trump’s new tariff threats, focusing instead on upcoming economic data from China. Japan’s Nikkei 225 closed flat.
• S&P 500: RBC Capital Markets raised its 2025 target for the S&P 500 to 6,250 from 5,730. However, unlike Goldman Sachs and Bank of America, RBC anticipates limited upside from current levels, with the index already above 6,280 as of July 11.