On May 9, 2025, Bitcoin surged past the $104,000 mark, with a 24-hour increase of 6.29%; Ethereum skyrocketed by 22.15%, returning above $2,200. Behind this sudden surge is a perfect resonance of favorable policies, technological breakthroughs, and capital rotation.
1. Policy tailwind: The Trump effect ignites the market.
On May 8, U.S. President Trump released multiple favorable policies, becoming the core catalyst for this round of market movements. First, he announced a tariff agreement with major trading partners, significantly reducing market concerns about global trade friction. More notably, Trump explicitly stated on social media: 'Now is the perfect time to buy stocks and crypto assets,' which immediately triggered a strong market response.
At the same time, the Trump administration pushed three key policies: nominating pro-crypto individuals to lead the SEC, promoting legislation for stablecoin regulation, and signaling that the Federal Reserve might cut interest rates earlier. This series of measures has created an unprecedented policy-friendly environment for the cryptocurrency market.
2. Capital migration: A paradigm shift from gold to crypto assets.
The traditional financial market also shows obvious characteristics of capital rotation. The spot price of gold fell below $3,300/ounce on May 8, a decrease of 2%. Analysts point out that as geopolitical risks ease, a large amount of capital is shifting from traditional safe-haven assets to the cryptocurrency market.
This transformation is evidenced by on-chain data: the number of active Bitcoin addresses surged to 850,000, setting a new annual high; institutional funds are also accelerating their inflow into BTC spot ETFs, with a net inflow of $142.3 million in a single day. The market is reassessing the narrative logic of Bitcoin as 'digital gold.'
3. Technological breakthrough: Significant upgrades in the Ethereum ecosystem.
The explosive surge in Ethereum's price is not only due to the catching-up factor but also thanks to significant technological breakthroughs. The successful launch of the Pectra upgrade on May 8 significantly enhanced Layer 2 performance, reducing average Gas fees from $3.5 to $1.2, and improving smart contract execution efficiency by 25%. This technological breakthrough clears obstacles for further development of applications such as DeFi and NFTs.
It is worth noting that the rise in Ethereum shows clear leverage-driven characteristics. Data shows that the liquidation amount across the network reached $650 million within 24 hours, with nearly 90% of the positions being short. A certain whale's precise bottom-fishing of 7,000 ETH before the surge further triggered retail investors' FOMO sentiment.
4. Risk warning: Rational reflection amidst the frenzy.
Despite the market's enthusiasm, potential risks cannot be ignored. Technical indicators show that Ethereum's RSI has reached 75, indicating a severely overbought zone; the Federal Reserve has yet to clarify its interest rate cut schedule, and inflationary pressures persist; on-chain data also indicates that some early investors are beginning to take profits.
Multiple analysts remind investors to focus on the following key events: the stablecoin bill vote on May 15, the SEC's new chair hearing on May 20, and the FOMC meeting on June 12. These events could serve as important catalysts for market shifts.
5. Investment advice: Respond rationally to market fluctuations.
For investors with different risk preferences, experts recommend adopting differentiated strategies:
1. Conservative investors: Can focus on allocating Bitcoin spot, paying attention to the $100,000 support level.
2. Aggressive investors: Can moderately participate in the Ethereum ecosystem but need to set strict stop-loss limits.
3. Professional investors: Can hedge risks through options and other derivatives.
The current market is in a period of policy dividend release, but investors need to maintain a clear understanding. The high volatility characteristic of the cryptocurrency market has not changed; only with good risk management can one seize opportunities and avoid risks in this historic market. The next steps in the market will depend on three key factors: the progress of policy implementation, the sustainability of institutional funds, and macro inflation trends.