The significant increase in Bitcoin is the result of multiple favorable factors resonating together:
1. Trade Agreement Boosts Confidence: On May 8 local time, the UK and the US reached an important trade agreement, significantly reducing tariffs on UK car exports to the US from 27.5% to 10%, while also eliminating tariffs on steel and aluminum products. This measure greatly boosted confidence in global risk assets, with the three major US stock indices closing higher, and the Nasdaq rising over 1%, driving the cryptocurrency market to strengthen in tandem, significantly enhancing investors' risk appetite.
2. Government Continues to Increase Holdings: The Salvadoran government announced further purchases of Bitcoin, continuing to promote its legal tender policy. The country is continuously buying Bitcoin to include in its national reserves, endorsing the value of Bitcoin and attracting global attention, showcasing Bitcoin's potential and recognition as an emerging asset.
3. Institutions Continue to Accumulate: Strategy, the world's largest enterprise-level Bitcoin holder, increased its holdings by 1,895 Bitcoins at an average price of $95,167 from late April to early May, with total holdings now surpassing 550,000 Bitcoins, valued at over $57 billion. The Japanese listed company Metaplanet also announced an additional purchase of 555 Bitcoins for $53.4 million, planning to increase its holdings to 10,000 Bitcoins within the year. The substantial and continuous purchases by institutions highlight their firm optimism about Bitcoin's long-term value.
4. Optimistic Predictions from Banks: Standard Chartered Bank noted in its latest report that Bitcoin could break $120,000 in the second quarter of 2025 and may approach $200,000 by the end of the year. The bank believes that the trend of global capital shifting from dollar assets to “digital gold” is accelerating, combined with the institutional buying wave, will drive Bitcoin to strengthen in the long term. This optimistic prediction has attracted widespread attention and capital inflows in the market.