Bitcoin recently staged a sharp comeback, now hovering around $80K for several weeks. The late August surge was extremely notable after the prolonged $60-65K summer lull. At the same time, two separate incidents involving a hardware wallet and a mid-cap blockchain have reopened debate on how much the industry can actually trust its own custody and settlement guarantees. Tim Sun, Senior Researcher at HashKey Group, breaks down both crypto trends.
Bitcoin’s Rebound: Treasury Policy Meets Crypto-Friendly Signals
Sun points to two economic and political forces converging at once:
“Bitcoin experienced a rapid market rebound following the U.S. Treasury’s expansion of long-term Treasury buyback operations and signals from the Trump administration further strengthening support for the crypto industry.
On one hand, the Treasury’s intervention in the long-term bond market alleviated the pressure caused by the rapid rise in long-term interest rates through buyback operations. Since long-term interest rates are a crucial factor influencing the valuation of risk assets, the decline in long-term yields improved overall financial conditions and reduced liquidity pressures on high-volatility assets. At the same time, this policy action sent a signal to the market that the U.S. government is paying attention to the impact of a high-interest-rate environment on fiscal financing and financial market stability, thereby lowering market expectations for further tightening of monetary policy in the future.
On the other hand, the Trump administration’s continuous signaling of policies supporting the development of the crypto industry further boosted market expectations for an improved regulatory environment for digital assets in the United States.”
That combination, Sun says, largely explains the rally’s timing. Nevertheless, he’s careful to draw a line between a relief bounce and a genuine trend reversal.
“The release of these positive catalysts played a key role in driving this round of the rebound. However, it is important to note that the conflict surrounding the U.S. and Iran has not been substantially alleviated, and the risk of rising inflation still persists. This indicates that, at least through the end of the year, despite an improvement in market liquidity and risk appetite compared to before, it will not be sufficient to support the market in entering a new bull run.”
Still, he sees the groundwork for something more durable forming underneath the near-term volatility.
“Looking ahead to the next few months, as macroeconomic liquidity pressures gradually ease, policy expectations become clearer, and market risk appetite steadily recovers, the Bitcoin market may be undergoing a bottoming-out process. A more solid price foundation and new upward momentum are also gradually brewing.”
Altcoins, however, haven’t been carried along for the ride.
“As for altcoins, based on our observations, they are currently in a deep recession with no obvious catalysts for recovery in sight. Aside from a few projects transitioning into the RWA (Real-World Assets) or AI sectors, overall financing levels and retail participation have not shown significant recovery, and the market will require more time to digest and readjust.”
Coldcard and Ravencoin: What Two Very Different Failures Have in Common
Beyond price action, we also discussed a separate crypto funds safety concern that’s been building over the past two weeks. In one incident, hackers exploited weak Bitcoin keys generated by vulnerable Coldcard firmware and stole over $100 million in Bitcoin. This case unsettled long-held assumptions about self-custody. Days later, a critical flaw affecting the Ravencoin network put roughly four days of transaction records at risk of reversal, exposing a gap between a transaction being recorded and a transaction being truly final.
Asked what these two incidents reveal together, Sun pointed out to a larger pattern:
“The Ravencoin protocol incident and the Coldcard wallet security incident once again demonstrate that security threats persist. Especially with the emergence of more powerful AI tools, this crisis may be even more severe than before. For mature, large-scale blockchains, the probability of core consensus being breached is relatively low due to their broader node networks, thorough audits, and well-developed developer ecosystems. However, the weaker links within their ecosystems remain vulnerable to hacker attacks.
The industry needs to upgrade its security infrastructure and security philosophies, including the introduction of AI-driven auditing, more robust private key management, and more timely monitoring systems.”
