Bitcoin prices climbed again, nearing its all-time high early this week, breaking through the US$107,000 mark for the first time since January 2025.
According to CoinMarketCap data on Monday (May 19, 2025), Bitcoin’s price steadily rose from US$103,200 to a daily peak of US$107,000, just under 3% shy of its all-time record of US$109,100 set on January 20, 2025, coinciding with the inauguration of U.S. President Donald Trump.

At the time of writing, Bitcoin has slightly corrected to around US$105,000, with its market capitalization standing at US$2.08 trillion.
This upward movement is fueled by a combination of factors strengthening market sentiment, including significant inflows into Bitcoin spot Exchange-Traded Funds (ETFs), inflation uncertainty, and expectations of stable interest rates.

Surge in Bitcoin ETF Interest
Data from SoSoValue shows that during the first half of May 2025, eleven Bitcoin spot ETFs in the U.S. recorded net inflows exceeding US$2.64 billion, with the largest inflow occurring on May 2 at nearly US$675 million. The cumulative assets under management now surpass US$122 billion.

This phenomenon indicates a shift from retail speculation towards more institutional investment vehicles like ETFs. Analysts note that these inflows reflect growing confidence in Bitcoin as a hedge asset, especially amid renewed inflation concerns.

Driven by U.S. Interest Rate Stability
Initially, the Bitcoin rally and broader crypto market were propelled by the Federal Reserve’s decision to keep benchmark interest rates at 4.25%–4.5% for at least the coming month. Fed Chair Jerome Powell said in early May that although inflation has dropped significantly, it remains above the long-term target of 2%.

Powell emphasized that the Fed will continue to monitor recent economic data before making further policy moves. Market participants currently anticipate Fed rates dropping to around 3.6% by the end of 2025.

U.S. Economic Uncertainty
On the other hand, inflation worries in the U.S. have resurfaced, partly due to the effects of new trade policies impacting global supply chains. This situation could enhance Bitcoin’s appeal as an inflation hedge, especially if price pressures persist in the coming months.

Although the U.S. and China agreed on a temporary 90-day tariff reduction, high tariffs remain on key sectors such as electric vehicles, semiconductors, and consumer electronics. This risks further price increases in the U.S. market.

For example, a Wall Street Journal report highlights Walmart—the largest retailer in the U.S.—plans to gradually raise product prices from this month through summer. The main reason is the inflow of tariff-affected imported goods onto store shelves.
Walmart even refrained from providing quarterly profit guidance because it cannot yet estimate the additional costs it will absorb to maintain price competitiveness. This statement further intensifies fears that inflationary pressure from trade policies could trigger shifts in monetary policy and cause volatility across asset classes, including cryptocurrencies.

Beyond these factors, positive sentiment was also boosted by the announcement that Coinbase, a major U.S. crypto exchange, will join the S&P 500 index on May 19.
Coinbase’s inclusion in the S&P 500 marks a significant milestone for the crypto industry, as the index only admits companies that reported profits in the last quarter and consistently generated earnings over the previous four quarters. This indicates Coinbase’s financial performance meets the high standards of the world’s most renowned stock index.