Bitcoin is approaching record highs as the price surpassed $106,000 on Monday, just shy of the peak of $108,786 set in January 2025. What momentum is driving this increase, and is the market ready to break out?
Momentum from ETFs and Strong Capital Inflows
Bitcoin rose from $105,700 on Sunday night, currently trading around $106,500 (according to CoinGecko), thanks to significant capital inflows into the #ETFbitcoin spot fund in the US. In the first half of May 2025, these funds recorded $2.8 billion in net inflows, with a peak of $674.9 million on May 2. Total assets under management have surpassed $122 billion, accumulating $41.77 billion since launch, as of May 16.
QCP Capital in Singapore predicts that the upward trend will continue, especially as Coinbase is included in the S&P 500 on May 19, 2025. “Inclusion in the index is often a short-term catalyst, as passive funds adjust their portfolios to align with the benchmark,” they commented. This event could attract more institutional capital, pushing Bitcoin prices higher.
Economic Context and Inflation: Supporting Factors
The Federal Reserve (Fed) keeps the reference interest rate at 4.25%-4.50%, reflecting a cautious stance amid mixed economic data. Chair Jerome Powell asserted last week that he is ready to respond to new data, but did not imply an immediate policy change. This creates a stable environment for risk assets like #bitcoin .
Inflation becomes a focal point as Walmart – the largest retailer in the US – warns of price increases from this month through early summer due to goods affected by tariffs hitting the shelves. CFO John David Rainey told the Wall Street Journal: “The pace and magnitude of these price increases are unprecedented in history.” Walmart did not provide a forecast for current quarter profits, as it is uncertain how much costs will be absorbed to compete.
Although the 90-day tax reduction agreement with China provides temporary relief, high tariffs still apply in areas such as electric vehicles, semiconductors, and consumer electronics. This raises concerns about prolonged price pressures, reinforcing Bitcoin's role as an inflation hedge.
Impact and Prospects
With crypto fund inflows reaching $3.4 billion last week and a forecast of accumulating $330 billion into Bitcoin by 2029, along with Ethereum ($2,600) seeing strong growth, the market is heating up. The price of Bitcoin nearing the peak of $108,786 indicates a potential breakout in the next 1-2 years, especially if ETFs continue to attract capital and inflation rises. However, volatility from Fed policies and tariffs needs to be closely monitored.
Conclusion: Is Bitcoin Ready to Shape the Future?
Bitcoin is nearing its historic peak thanks to $2.8 billion in ETF inflows, stable interest rates, and inflation concerns from tariffs. With its role as an inflation hedge and institutional participation, Bitcoin promises strong growth, but investors need to be cautious of economic risks.
Risk warning: Investing in cryptocurrencies carries high risks due to price volatility and legal uncertainties. Please consider carefully before participating. #anhbacong