Since BTC briefly broke through $10,200 on February 4th, BTC has experienced a three-month-long oscillating market, with prices unable to effectively stabilize above $100,000. Today, the market finally witnessed a key breakthrough, with BTC standing above $100,000 again.
VX: TZ7971
With recent tariff negotiations, ETF fund inflows, continuous holdings by listed companies, and state-promoted strategic reserve bills, BTC is ushering in a new round of structural growth. The market is showing a trend of shifting from retail to institutional investors, and from speculative risk to asset allocation.
BTC Welcomes Continuous "Big Buyers"
MicroStrategy has always been a firm BTC buyer. On May 2nd, they announced a bold "42/42 plan" to raise $84 billion for BTC purchases within two years, following their previous $42 billion "21/21 plan" last year.
Additionally, the Japanese listed company Metaplanet recently announced investing $53.4 million to acquire 555 BTC. They also issued ordinary bonds worth $25 million for additional BTC purchases.
The Indian listed company Jetking is also raising billions to purchase 18,000 BTC.
Besides MicroStrategy and other listed companies, various U.S. states are promoting BTC strategic reserve bills. At the federal level, Trump signed an executive order in March requiring the establishment of a strategic BTC reserve and digital asset inventory.
On May 7th, New Hampshire became the first U.S. state to pass a strategic BTC reserve bill, authorizing state financial officials to directly purchase or buy through exchange-traded products (ETP) the world's largest digital asset.
In the early morning of yesterday, the Texas Strategic BTC Reserve Bill (SB 21) passed the Doge Committee review without amendments and will enter the final full vote stage. As the Texas legislature will adjourn on June 2nd, the final result of the bill is expected to be revealed in the next three weeks. The bill is an important legislative initiative for Texas to establish a strategic BTC reserve and has completed all committee review procedures, just one step away from final passage.
Rate Cut Expectations and Improved Trade Environment
In the early morning of May 8th, the Federal Reserve, withstanding Trump's pressure, announced maintaining the benchmark interest rate between 4.25% and 4.5%. This is the third consecutive meeting without a rate cut. Despite the U.S. economic contraction in the first quarter and inflation pressure from Trump's import tariffs, the Fed still stated that the economy is "steadily growing" and the job market is "strong", emphasizing that current inflation levels are "slightly high but controllable" and have not yet signaled a rate cut.
However, Powell stated that "despite increased uncertainty, the economy remains fundamentally sound". He noted that the unemployment rate remains low, and the labor market has "reached or is near full employment". The market expects the Fed to lower the federal funds rate to 3.6% by the end of 2025.
The current market presents a complex game: on one hand, the high-interest-rate environment continues to suppress investors' interest in high-risk assets like crypto; on the other hand, geopolitical risks and inflation expectations are driving some funds to use BTC as a "digital gold" for hedging.
Notably, the Fed's policy statement first mentioned "considering broad economic data rather than a single indicator", which the market interprets as a potential future shift towards easing when economic slowdown signs become clear. Currently, CME rate futures show a 68% probability of a September rate cut, up 12 percentage points from before the resolution. The correlation between the crypto and traditional financial markets continues to strengthen, with macro policy changes becoming a key variable affecting digital asset prices.
Besides the Fed's rate cut expectations, the market also received a positive certainty with tariff negotiations showing initial progress. On May 8th, the UK and U.S. reached an agreement on tariff trade terms, with the UK government agreeing to concessions on U.S. food and agricultural product imports in exchange for reduced tariffs on UK car exports.
It is expected that U.S.-China trade negotiations will see progress in the coming weeks, and Trump's 145% tariffs on China cannot be maintained long-term. This suggests that Trump has some room for softening tariff policies, which is beneficial for the stability of the crypto market.
Today's fear index is 73, still in a greedy state.
BTC has returned above $100,000, and with a bit more pull, it won't liquidate anyone. Ethereum also hardened today, with its upgrade officially completed yesterday, pulling up 20% overnight. The rise is an opportunity for everyone to reduce positions, not for FOMO to enter. Do not chase high, short-term traders should exit and reduce positions. Currently, BTC's dominance has peaked, and the next opportunity might be in altcoins, prioritizing public chains. In terms of application value, public chains still rank first, such as $UNI, $HT, etc. Once BTC stabilizes above $100,000, look for opportunities to layout; if it doesn't stabilize, wait a bit longer.
