On May 19, 2025, Bitcoin's price surpassed $107,000, setting a new historical high. This milestone was not coincidental but a result driven by an avalanche of institutional capital, macro policy shifts, and geopolitical games. The current price trend exhibits characteristics starkly different from past bull markets: retail speculation has receded, with ETF funds, sovereign wealth funds, and corporate balance sheets becoming the dominant market forces; the intertwining of the Fed's monetary policy and trade tariff policy has reshaped Bitcoin's dual narrative as an 'inflation hedge' and 'digital gold'; and the legislative process of the U.S. (GENIUS Act) could fundamentally rewrite the landscape of the stablecoin market, thereby affecting Bitcoin's long-term value logic.
ETF Capital Influx: The Institutional Wave Reshapes Market Structure
The continuous inflow of funds into the U.S. spot Bitcoin ETF has become the core engine of this round of rising prices. According to Coinglass data, in the first half of May 2025, net inflows into ETFs exceeded $2.8 billion, with a single-day inflow of $674.9 million on May 2.
As of May 16, the cumulative inflow has reached $41.77 billion, with total assets under management exceeding $122 billion. BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Bitcoin Fund dominate the market, collectively accounting for over 60%. This phenomenon marks the acceleration of Bitcoin's 'institutionalization' process: 80 publicly listed companies hold BTC, accounting for 3.4% of the total circulation, and New Hampshire has even legislated to include Bitcoin in its state strategic reserves, creating a precedent for sovereign entities to allocate cryptocurrencies.
The siphoning effect of ETF funds has profoundly changed the supply-demand structure of the market. On-chain data shows that the Bitcoin inventory on exchanges has fallen to its lowest level since 2018, with over 70% of the circulation locked by long-term holders. This 'chip沉淀' phenomenon significantly reduces market volatility, lowering Bitcoin's volatility from 90% in 2024 to the current 45%, approaching the level of the S&P 500 index. Coinbase is set to be included in the S&P 500 index on May 19, which is expected to trigger about $12 billion in passive fund repositioning, further strengthening the linkage between Bitcoin and traditional financial markets.
Macro Game: Risk Aversion Demand amid Stagflation Shadows and Tariff Risks
The uncertainties surrounding the Federal Reserve's monetary policy and trade policy provide a unique macro hedging scenario for Bitcoin. Although the Fed maintains the benchmark interest rate in the range of 4.25% to 4.50%, Powell's latest statements suggest that the central bank is facing a dual dilemma of 'fighting inflation' and 'preventing recession.' The U.S. CPI rose by 3.8% year-on-year in April, and the core PCE price index reached 3.2%. Retail giants like Walmart have raised prices due to tariff costs, exacerbating market concerns about 'stagflation.' In this environment, Bitcoin's 'inflation hedge narrative' has been reactivated: its fixed supply mechanism of 21 million coins starkly contrasts with the Fed's balance sheet expansion—global M2 money supply growth is projected to reach 8.7% year-on-year in 2025, while Bitcoin's market capitalization growth is projected at 140%.
The chain reaction of trade policies further amplifies Bitcoin's hedging attributes. The 90-day temporary tariff reduction agreement reached between China and the U.S. has not alleviated frictions in key industries (such as electric vehicles and semiconductors), and the average tariff on U.S. imports from China remains at 19.3%. Walmart's CFO warned that the price increases of goods affected by tariffs are 'historically unprecedented,' which could raise core inflation by 0.5 to 0.8 percentage points. Against this backdrop, the 30-day correlation between Bitcoin and gold has risen to 0.62, a new high since 2021, indicating that Bitcoin is being incorporated into a broader risk-hedging asset portfolio.
Regulatory Inflection Point: The Game of the GENIUS Act and the Changing Landscape of Stablecoins
On May 19, the final vote by the U.S. Senate on the (GENIUS Act) became a key variable affecting market expectations. The bill aims to establish a federal regulatory framework for stablecoin payments, requiring stablecoins to be 100% backed by U.S. dollars or U.S. Treasury securities, and mandates audits for projects with a market capitalization exceeding $50 billion. Although the vote on May 8 failed by a margin of 48 to 49, Republican Senator Hagerty and Democratic Senator Gillibrand are pushing for a revised version of the bill, attempting to find a balance between 'consumer protection' and 'innovation incentives.'
If the bill is passed, it could trigger a triple market effect:
Strengthening Dollar Hegemony: The requirement for 86% of stablecoin reserve assets to be short-term U.S. Treasury securities transforms the cryptocurrency market into a 'new buyer' of U.S. Treasuries. Currently, Tether holds $120 billion in U.S. Treasuries, increasing its holdings by $300 million daily, forming a '1 dollar → 1 USDT + 1 U.S. Treasury' credit expansion chain.
Accelerating Institutional Capital Inflow: Goldman Sachs estimates that the implementation of the bill will attract at least $12 billion in institutional funds into compliant stablecoins and indirectly raise Bitcoin demand through cross-market arbitrage.
Revaluation of Decentralized Asset Value: The bill brings stablecoins under traditional financial regulation, highlighting Bitcoin's 'non-sovereign attribute.' Historical data shows that during periods of tightening regulation, the number of on-chain active Bitcoin addresses has increased by an average of 23%, indicating some funds are shifting from stablecoins to decentralized assets.
Geofinancialization: The Secret Contest between National Strategies and Family Capital
Behind Bitcoin's surge lies a deeper geopolitical game. Developing countries are incorporating Bitcoin into their sovereign strategies: in countries like Turkey and Nigeria, where inflation is high, USDT payments account for over 33%; Iran and Russia are using surplus energy for Bitcoin mining as an alternative channel for foreign exchange. Recently, it was revealed that Saudi Arabia's sovereign wealth fund holds approximately 25,000 BTC, marking an acceleration of the fusion between the petrodollar system and crypto assets.
It is noteworthy that the Trump family's crypto layout has become a sensitive variable in the market. His personal token TRUMP briefly surpassed a market capitalization of $85 billion, and his son Eric's DeFi platform manages over $20 billion in assets. On May 22, Trump plans to release a TRUMP dinner poster, interpreted as an attempt to tie crypto capital to political donations—over $200 million has already been contributed by the crypto industry to political funding in the 2024 election. This 'political + financial' maneuver not only injects short-term liquidity into Bitcoin but also sows the seeds of policy reversals.
Risk Warning: High Leverage Bubble and Mismatch Crisis
Behind the market frenzy, potential risks are accumulating. The leverage ratio in the derivatives market has reached an all-time high: the total collateralized lending scale has surged by 240% in three months, with Bitcoin futures open interest reaching $48 billion, 65% of which consists of high-leverage positions. In March 2025, when Trump announced the establishment of a Bitcoin reserve, a single-day drop of 5% led to $710 million in contract liquidations, signaling that extreme volatility may become the norm.
A more severe risk lies in the maturity mismatch of the stablecoin system. Tether's 86% U.S. Treasury holdings are short-term bonds maturing within a year, while 41% of the USDT issued is locked long-term. This 'short debt long investment' model is highly similar to the CDO bubble of the 2008 subprime crisis; once a run occurs, it could trigger a chain reaction of U.S. Treasury sell-offs and a collapse of dollar credit.
Future Outlook: The Collision of Technological Revolution and Old Order
Bitcoin's breakthrough of $100,000 marks the beginning of a 'fission moment' in the global monetary order. From a technological evolution perspective, the Lightning Network's transaction speed has increased to 100,000 TPS, and DeFi's locked value has surpassed $500 billion, making its payment and financial functions increasingly refined; from a geopolitical perspective, Hong Kong has approved licenses for 8 digital asset exchanges and plans to launch Bitcoin futures options, attempting to seize pricing power in the Web3 era.
However, the essence of this transformation remains the collision between a technology-enabled financial revolution and the dilemma of dollar hegemony. Bitcoin relies on the dollar system (73% of stablecoins are pegged to the dollar), yet it undermines its foundation (the monetization of U.S. Treasury securities depends on the crypto market taking over). This self-negating paradox makes it the 'ultimate gambling tool' in the global capital game—both an escape pod from the old order and a risk testing ground for the new world.
For investors, there is a need to be vigilant against the dual harvesting of policy arbitrage and market manipulation; for sovereign nations, this game may reshape the boundaries of monetary sovereignty and financial stability. When Bitcoin's price scale shifts from 'dollar symbol' to 'power leverage,' what we are witnessing is not only the rise and fall of assets but also a turning point of an era.
