Bitcoin Breaks $110,000: Unveiling the Five Core Reasons for the Bitcoin Rush in 2025
In May 2025, Bitcoin staged an epic performance once again: on May 9, it strongly broke through the $100,000 mark, with its market capitalization entering the top five global assets; just two weeks later, the price soared again to $111,000, with an annual increase of over 17%. This rise, driven by the resonance of policies, capital, and the macro environment, not only set a new historical high but also reshaped the positioning of crypto assets within the global financial system.
Institutional capital is entering the market in large amounts, reshaping the supply and demand structure.
Traditional financial institutions are embracing Bitcoin at an unprecedented pace:
- Publicly traded companies are actively allocating: MicroStrategy’s latest financial report shows that its Bitcoin holdings have an unrealized gain of over $488 million, and it plans to raise another $2.1 billion to increase its position; Japanese company Metaplanet, Indian company Jetking, and others are following suit, incorporating Bitcoin into their corporate treasury.
- National-level strategic reserves: New Hampshire, USA, has taken the lead in passing the Bitcoin strategic reserve law, while the Texas bill has entered the voting stage; El Salvador continues to increase its holdings, significantly enhancing the legitimacy of Bitcoin as a “sovereign-level asset.”
- ETF funds continue to pour in: The net inflow of the US spot Bitcoin ETF in May was $4.2 billion, with a total scale surpassing $40.2 billion. The holdings of asset management giants like BlackRock have reached 597,000 BTC.
Institutional participation has significantly reduced the market circulation volume. Glassnode data shows that the non-liquid supply of Bitcoin has reached an all-time high, further highlighting its scarcity.
Policy inflection point established
The Trump administration’s “pro-crypto policy” has become a key catalyst:
- National Strategic Reserve Plan: Incorporate Bitcoin and Ethereum into the US cryptocurrency strategic reserve, releasing a national endorsement signal.
- Legislative breakthrough: The “GENIUS Stablecoin Act” has been procedurally passed by the Senate, requiring issuing institutions to maintain full reserves and undergo security audits, opening the channel for an influx of hundreds of billions in new funds.
- Local pilot projects: Arizona allows public funds to invest in Bitcoin, while Hong Kong simultaneously passes the “Stablecoin Regulation Draft,” enhancing global regulatory cooperation.
The narrative of “digital gold” amid macroeconomic turbulence
In the context of global economic uncertainty, the hedging properties of Bitcoin have been validated:
- Hedging against US dollar credit risk: Trump’s interference with the independence of the Federal Reserve, tariffs, and other policies have weakened trust in the dollar, causing the 10-year US Treasury yield premium to rise to an annual high, leading funds to turn to Bitcoin for value preservation.
- Expectations of interest rate cuts boost liquidity: The market’s expectation for the probability of a Fed rate cut in September has risen to 44.4%, with a loose environment stimulating demand for risk asset allocation.
- Competition as an alternative to gold: JPMorgan pointed out that Bitcoin presents a “zero-sum game” with gold, and the recent rise in Bitcoin has directly diverted funds from gold.
Scarcity technical aspect: halving effect and whale accumulation
The underlying design of Bitcoin continues to support value growth:
- The fourth halving is set to occur in 2024: the block reward will drop to 3.125 BTC, resulting in a sharp increase in new coin supply. Historical data shows that a price rise usually accompanies the halving 12-18 months afterward.
- Whales accelerate accumulation: On-chain monitoring shows that 61 new addresses holding over 1,000 BTC have been added in the past 30 days, marking the largest increase this year; there has been a net outflow of 4 billion dollars in Bitcoin from exchanges in a single week, indicating significant accumulation.
The synergistic effect of market sentiment and technical upgrades
- Bullish expectations in the derivatives market: The Deribit exchange has seen a large number of Bitcoin call options with a strike price of $300,000, betting on a breakthrough of $150,000 before the end of 2025.
- Layer 2 scaling implementation: The Lightning Network reduces transaction costs, the Taproot upgrade enhances privacy, and practical breakthroughs attract incremental users.
Future Outlook: Trends and Risks Coexist
Bitcoin’s market capitalization once exceeded 2.2 trillion USD, surpassing Saudi Aramco to become the world’s fifth largest asset, marking its transformation from a “speculative target” to an “institutional-level macro hedging tool.”
In this bull market driven by institutional capital and national-level adoption, Bitcoin is redefining the paradigm of value storage in the digital age. Its true transformation may have only just begun.
