Since Bitcoin briefly broke through $10,200 on February 4, it has experienced three months of tug-of-war and the price has never been able to effectively stand above the $100,000 mark. Just now, the market finally witnessed a key breakthrough, with Bitcoin breaking through $10,100, a 4% increase in 24 hours.
In the first half of 2025, the crypto market has experienced many twists and turns. Bitcoin's market share has climbed all the way to a record high. On the one hand, the Trump administration has released regulatory benefits, while on the other hand, it has disrupted the tariff order and is suspected of manipulating the market.
At the beginning of the year, strong U.S. employment data and continued inflationary pressure led to market expectations that the Federal Reserve would delay rate cuts. Higher interest rates reduced investors' interest in high-risk assets, leading to capital outflows. In February, Bybit was hacked and lost $1.5 billion in assets, becoming one of the largest cryptocurrency thefts in history, which triggered market concerns about the security of cryptocurrencies and further suppressed Bitcoin prices.
In early April, Trump announced a new round of tariffs on almost all imported goods, triggering panic in global markets. The stock market fell sharply, and investors' risk appetite declined, affecting the cryptocurrency market. Bitcoin, as a risky asset, was not immune, and its price fell sharply.
However, with the recent tariff negotiations, the return of ETF funds, the continued increase in holdings by listed companies, and the promotion of strategic reserve bills by various states, Bitcoin has ushered in a new round of structural increases. The market is showing a trend of shifting from retail investors to institutions, and from risk speculation to asset allocation.
Bitcoin reserve plans of listed companies and US states
Bitcoin has welcomed a continuous stream of "big buyers".
MicroStrategy has always been a staunch buyer of Bitcoin. On May 2, it announced that it would launch a bold "42/42 Plan" to raise $84 billion in two years to buy Bitcoin. Previously, it had implemented the "21/21 Plan" of $42 billion last year.
In addition, Metaplanet, a Japanese listed company, recently announced that it would spend another $53.4 million to increase its holdings of 555 BTC. It also issued ordinary bonds worth $25 million to purchase additional Bitcoin.
Harsh Bharwani, CEO of Indian listed company Jetking, said it is raising billions of dollars to buy 18,000 BTC.
Jetking CEO said: “In the next six months, we plan to raise funds and scale to about 180 bitcoins. In the next year, we will touch the scale of about 1,800 bitcoins. And finally, around 2030, using the various tools and resources available to us, we will reach a scale of about 18,000 bitcoins.”
In addition to Strategy and other listed companies that have been buying, there are also Bitcoin strategic reserve laws being promoted in various states in the United States. At the federal level, Trump signed an executive order in March requiring the establishment of a strategic Bitcoin reserve and digital asset inventory.
On May 7, crypto journalist Eleanor Terrett revealed that New Hampshire became the first U.S. state to pass a strategic Bitcoin reserve law, authorizing state treasurers to purchase the world’s largest digital asset directly or through exchange-traded products (ETPs).
Yesterday morning, the Texas Strategic Bitcoin Reserve Act (SB 21) passed the DOGE Committee without amendments and will enter the final full vote. As the Texas legislature will adjourn on June 2, the final result of the bill is expected to be announced in the next three weeks. The bill is an important legislative measure for Texas to establish a strategic Bitcoin reserve. It has completed all committee review procedures and is only one step away from final approval.
Related reading: (After Trump signed the bill, which states in the United States are "obediently" promoting the Bitcoin Strategic Reserve Act?)
Expectations of interest rate cuts and improved trade environment
In the early morning of May 8, the Federal Reserve withstood the pressure from Trump and announced that it would maintain the benchmark interest rate between 4.25% and 4.5%. This is the third consecutive meeting without a rate cut. Although the US economy contracted in the first quarter and the inflationary pressure caused by the Trump administration's imposition of import tariffs has emerged, the Federal Reserve still stated that the economy is "growing steadily" and the job market is "strong", emphasizing that the current inflation level is "slightly high but controllable", and has not yet released a signal of a rate cut.
However, Powell said that "despite the increased uncertainty, the overall economy remains in a solid position." He said that the unemployment rate is still low and the labor market is "at or close to full employment." The market expects the Fed to lower the federal funds rate to 3.6% by the end of 2025.
Arthur Hayes, co-founder of BitMEX, said at the Token2049 conference a few days ago that investors should thank the US monetary authorities. He believes that inflation may continue, and the market generally believes that this is good for assets such as Bitcoin. He also pointed out in an interview: "I think the current market environment is very suitable for the rise of risky assets, just as we saw from the third quarter of 2022 to the beginning of 2025."
Analysis shows that the current market presents a complex game: on the one hand, the high interest rate environment continues to suppress investors' interest in high-risk targets such as crypto assets; on the other hand, geopolitical risks combined with inflation expectations have prompted some funds to use Bitcoin as "digital gold" for hedging.
It is worth noting that the Fed's policy statement mentioned for the first time that "a wide range of economic data will be considered rather than a single indicator", which was interpreted by the market as a possible turn to easing in the future when there are clear signs of economic slowdown. Currently, CME interest rate futures show that the probability of a rate cut in September has risen to 68%, an increase of 12 percentage points from before the decision. The linkage between the crypto market and the traditional financial market continues to strengthen, and changes in macroeconomic policies are becoming a key variable that affects the price of digital assets.
In addition to the Fed's interest rate cut expectations, the market also welcomed the certainty of positive news, that is, the initial success of tariff negotiations. On May 8, the United Kingdom and the United States reached an agreement on the terms of the tariff trade agreement. The British government agreed to make concessions on imports of American food and agricultural products in exchange for the United States reducing tariffs on British automobile exports.
According to CNBC, U.S. Treasury Secretary Benson said in an interview on Monday that he expects progress in U.S.-China trade negotiations in the coming weeks, and pointed out that Trump's 145% tariff on China cannot be maintained for a long time. This shows that the Trump administration has room to relax its tariff policy in the future, which is conducive to the stable development of the crypto market.
Bitcoin ETFs continue to see net inflows
At the end of April, the analysis agency Matrixport said that from the daily chart since March 19, Bitcoin ETF funds continued to flow out, and the position in the futures market also fell simultaneously. From January to April, the cumulative net outflow of ETFs was close to US$5 billion.
However, a large inflow of nearly $3 billion has been observed recently, and futures open interest has also increased simultaneously, while the funding rate remains at a low level. This shows that the current new capital inflow mainly comes from real long-term holding demand, and compared with the ETF buying driven by arbitrage funds at the beginning of the year, the overall bullish signal is more positive.
On May 4, according to Farside data, the total net inflow of Bitcoin ETFs once again exceeded $40 billion, reaching $40.207 billion, approaching the historical high. The highest point of total net inflow of Bitcoin ETFs occurred on February 7, reaching $40.78 billion.
At the same time, data shows that small-scale retail investors began to sell BTC as Bitcoin continued to consolidate below $100,000. Crypto analyst Santiment recently pointed out that the behavioral differences between Bitcoin whales and retail investors often mean that Bitcoin may be moving towards the next round of upward trend.
The data shows that wallet addresses that are highly correlated with the health of the overall crypto market (holding 10 to 10,000 BTC) have added a total of 81,338 Bitcoins during the past six weeks of volatility, accounting for 0.61% of their total holdings.
Meanwhile, small wallets (holding less than 0.1 BTC), which typically lag inversely with price action, sold 290 bitcoins in the past six weeks, representing a reduction of about 0.60% of their total holdings.
