The analysts pointed to the lagging price reaction to the Treasury Department's bond buyback announcement, as well as the faster rise of Ether compared to Bitcoin, as evidence that the "digital gold" narrative was not the primary driver. "We believe regulatory news from the US is a more compelling explanation for this move," the analysts noted.

A key factor to watch, according to Citi, is whether the rebound in sentiment can reverse the stagnation in ETF inflows observed since the liquidations last October. A surge in flows over the next month would signal that investors recognize the favorable regulatory environment, even in the absence of clarity around market structure legislation. In its base case, Citi assumes zero net inflows into the ETF, while also pointing to long-term uncertainty regarding value accumulation as activity potentially shifts to private blockchains.

"What's happening with Bitcoin now is the market's beginning to realize how significant this moment could be for the crypto industry in the US. President Trump's support for the CLARITY Act is very significant," said Todd Ault, founder of Ault Blockchain, in an interview with Investing.com.

Bernstein, in a separate article, noted that the Treasury Department's decision to buy long-term bonds served as a powerful trigger for Bitcoin. Analyst Gautam Chhugani noted that the apathy toward cryptocurrencies earlier this year was due to market tightening following the Iran conflict and the active influx of liquidity into the AI ​​and semiconductor sectors. However, as AI capital spending increasingly taps into debt markets, this increased liquidity could be channeled into Bitcoin as a safe haven.

Chhugani also added that regulatory clarity from the SEC and CFTC "will remain regardless of the passage of the CLARITY Act," which is scheduled for a vote on September 15. Ethereum outperformed Bitcoin during the recent rally, which the analyst attributed to Ethereum's greater exposure to stablecoins, tokenization, and the adoption of real assets.

Regarding flows, the analyst noted that outflows from Bitcoin ETFs have stabilized after peaking near $7 billion—approximately 10% of assets under management—between May and June. As of August 20, cash inflows totaled $1.1 billion, and total assets exceeded $85 billion, up from $70 billion in June.

Strategy's balance sheet has also stabilized: the company's cash reserves now cover 2.8 years of dividend payments, according to Bernstein. The company's Bitcoin sales were limited to 0.8% of total holdings and were used to support the buyback of STRC; Bernstein expects the company to resume Bitcoin purchases as STRC's par value approaches $100.