BTC breaks 100,000 again: Revaluation of value under the resonance of institutions, liquidity and policies

Written by Jeffrey Ding, Chief Analyst of HashKey Group

The strong breakthrough of Bitcoin price over the $100,000 mark is the result of the interweaving and resonance of many complex factors such as the global economic situation, the layout of financial institutions, market liquidity, macroeconomic policy orientation and market sentiment.

As early as the end of April, Bitcoin broke away from the same frequency as the U.S. stock market, and went out of the independent market against the rise of the U.S. stock market, which laid the groundwork for Bitcoin to return to $100,000.

First, the most direct reason is the continuous purchase of institutions. At the end of 2024, the asset size of BlackRock Bitcoin ETF (IBIT) reached $34.3 billion, surpassing the $33 billion of iShares Gold Trust (IAU). This signal shows that the long-term confidence of traditional institutions in Bitcoin is gradually increasing, which lays the groundwork for the repricing of Bitcoin. Strategy, Thumzup, Metaplanet and other companies continue to increase their holdings of Bitcoin, further consolidating the buyer power of the market, attracting more incremental funds to enter the market, and providing support for the rise in Bitcoin prices.

In addition, the liquidity of the crypto market is also quietly changing. According to statistics from the blockchain data platform CoinGecko, the additional issuance of USDT in April 2025 will reach 5 billion US dollars, making the funds for the crypto market more abundant. During the rise of Bitcoin this time, there was no previous situation where Bitcoin sucked blood from altcoins and caused the altcoins to fall, but a general market enthusiasm scene appeared. The increase in USDT is related to the stablecoin bill that the United States will implement this year. It is expected that with the advancement of the stablecoin bill, the number of USDT will continue to increase in the future.

Institutional holdings and the increase in overall liquidity in the crypto market are prerequisites for Bitcoin to break through $100,000, and the policy wind direction has also turned for the better behind this result.

On the evening of May 6, New Hampshire Governor Kelly Ayotte officially signed HB 302, announcing that the state will establish a "Strategic Bitcoin Reserve", allowing the state's treasury department to invest no more than 5% of public funds in precious metals and digital assets with a market value of more than $500 billion (currently only Bitcoin meets the criteria). The Arizona legislature passed the Strategic Digital Asset Reserve Act (SB1373), allowing 10% of public funds to be invested in digital assets such as Bitcoin. Although this move has not yet been launched with substantial funds, it will undoubtedly greatly enhance market confidence.

In addition, on May 8, local time, Trump announced that the United States and the United Kingdom had reached a new trade agreement to partially withdraw tariffs in specific areas. Previously, the global market was under pressure, both in the stock market and the crypto market, mainly because of the panic caused by the tariff war. Now this news has made the market believe that the impact of the tariff war will gradually weaken, which has triggered a violent rise in the price of Bitcoin.

In the future, the expectation of the Fed's interest rate cut in the second half of the year is gradually increasing. Although there is still great uncertainty about the interest rate cuts in June and July, the expectation that the Fed may cut interest rates twice this year has not changed, so the market's expectations will gradually increase over time.

The breakthrough of Bitcoin's price of $100,000 this time is not only a repricing of its scarcity and risk-averse function by the market, but also indicates that the global asset allocation paradigm is undergoing a profound change. In the future, Bitcoin's journey of value discovery will continue, and its price trend will continue to be affected by multiple factors such as the global economic situation, policies and regulations, and market sentiment.