Original | Odaily Planet Daily (@OdailyChina)

Author | Ethan (@ethanzhangweb3)_

"After three months, BTC has once again crossed the $100,000 mark!"

Last night, Bitcoin broke through the $100,000 barrier again, reaching a high of $104,000, with a 24-hour increase of 7.41%, setting a new high in nearly three months. Other major altcoins also saw significant increases. According to data from Quantify Crypto, most of the top 100 cryptocurrencies by market capitalization are on the rise, with major altcoins experiencing substantial gains: ETH surpassed $2,200, with a 24-hour increase of 20%; SOL broke through $160, with a 24-hour increase of 8.9%; DOGE exceeded $0.19, with a 24-hour increase of 11.38%.

Interestingly, the ETH/BTC exchange rate also reached a new high in a month, peaking at 0.0218, with a daily increase of 13%.

Why has ETH become the leader in this round of increases? On one hand, the Pectra upgrade has enhanced Ethereum's Layer 2 ecosystem through several improvements, such as increasing block throughput, optimizing EVM object formats, and advancing account abstraction, which lowers transaction costs and improves data availability. This will attract more developers and users, providing a potential catalyst for ETH's price breakthrough, which may have a positive impact on ETH's valuation in the long term (recommended reading: "Interpreting Ethereum Pectra: The Next Major Upgrade").

On the other hand, the ETF staking expectations are building, with the approval window for Ethereum's spot staking function set for early June. If staking services are approved, they could bring additional returns to investors or attract more attention to Ethereum ETFs. Combined with the positive effects of the Pectra upgrade, the market holds a cautiously optimistic view on the development of the Ethereum ecosystem, with related technological advancements and regulatory trends becoming the focus of market observation for Ethereum in the coming month.

Affected by the overall upward trend, the total market capitalization of cryptocurrencies has also rapidly climbed. According to CoinGecko, the total market capitalization of cryptocurrencies has now surpassed $3.3 trillion, with a 24-hour increase of 5.26%. The trading enthusiasm among crypto users has surged, with today's Fear and Greed Index reported at 73, shifting from extreme fear last month to greed.

In terms of derivatives trading, data from Coinglass shows that in the past 24 hours, the total liquidation across the network reached $956 million, primarily from short positions, amounting to $819 million. In terms of cryptocurrencies, BTC saw liquidations of $394 million, while ETH had liquidations of $311 million.

Catalyst for the Rise: A Pause on Tariffs?

This rise may be related to positive news regarding the "tariff war."

On May 7, the Chinese Ministry of Foreign Affairs announced that Vice Premier He Lifeng would visit Switzerland from May 9 to 12 and hold talks with the U.S. side. This news was interpreted by the market as a clear signal from both China and the U.S. to "pause tariff escalations," boosting market risk appetite. Historical data shows that during the trade negotiation window in January 2024, Bitcoin rose by 22% in a month due to improved expectations for cross-border capital flows.

Additionally, although the Federal Reserve maintained the benchmark interest rate at 4.25%-4.50% on May 8, in line with market expectations, traders continue to believe that the Fed will cut rates before July, with expectations for three rate cuts this year. Futures contracts linked to the Fed's policy rate recovered earlier losses after the rate decision was announced, currently pricing in a 30% chance of a 25 basis point cut as early as June, slightly higher than the earlier 27%. According to futures prices, the likelihood of a rate cut by July is about 75%.

Moreover, Fed Chair Powell has also released some dovish signals, stating that in certain circumstances, a rate cut this year would be appropriate, while in other situations, it would not be appropriate, and he cannot confidently say he knows the right path for interest rates.

What Will the Future Trend of Crypto Be?

Bitcoin has once again broken through $100,000 after three months, and altcoins are also "dancing," significantly rising possibly due to tariff negotiations, favorable policies, and institutional involvement. But has the bull market really returned, or is this just "the last hurrah"? Are there other variable factors at play? Below, Odaily Planet Daily will summarize institutional views and arguments regarding the future market trends.

CZ: The Option to Buy Bitcoin Before the Government is Disappearing

Binance founder CZ quoted news about Arizona officially legislating a strategic Bitcoin reserve law on the X platform, stating: Investors can buy when the government starts purchasing or after the government has made purchases, but the option to buy "before the government purchases" is gradually disappearing.

BitMart: Uncertainty Dominates, Market is Reshaping Bitcoin's Positioning

Since the introduction of tariff policies, global economic uncertainty has intensified, leading to a surge in gold prices to $3,500 per ounce, setting a new historical high. Meanwhile, U.S. stocks, bonds, and foreign exchange markets have seen significant declines, with investors seeking safe-haven assets. In this context, whether Bitcoin can serve as a substitute for gold has become a focal point of market attention. As the correlation between Bitcoin and gold has significantly increased, reaching its highest level in two years, it indicates that investors are beginning to view Bitcoin as a potential safe-haven asset amid heightened macroeconomic uncertainty. However, despite Bitcoin exhibiting similar safe-haven characteristics to gold in certain situations, its high volatility and market sentiment-driven nature still make it more akin to risk assets like tech stocks. Therefore, the market is currently in a critical positioning phase: Is Bitcoin a safe-haven asset like gold, or a risk asset like tech stocks? This positioning depends not only on the correlation between Bitcoin and gold but also on multiple factors such as its market sentiment-driven characteristics, volatility, and investors' confidence in it as a safe-haven tool. In the future, as the market gains a deeper understanding of Bitcoin's characteristics, its role in investment portfolios may become clearer.

Alvin Liew: Watch for Delayed Rate Cut Risks

UOB economist Alvin Liew stated that due to tariff risks, the Federal Reserve may delay rate cuts. Fed Chair Powell indicated that central bank officials are not in a hurry to adjust rates because "the cost of waiting is quite low," according to the economist. Given the Fed's warnings about the inflation and unemployment risks caused by U.S. tariffs, it still emphasizes patience. UOB continues to expect three rate cuts of 25 basis points each in 2025. The economist mentioned that UOB has pushed back the expected timeline to the meetings in September, October, and December. UOB still believes there will be two rate cuts in 2026, meaning the federal funds rate will drop to 3.25% next year.

Summary

After three months, BTC has finally surged back above the $100,000 mark, not just a return of price but a resurgence of market confidence.

At the moment the signals of easing between China and the U.S. were released, institutions had already quietly increased their positions, while retail investors were still on the sidelines, and BTC had already taken the lead. Not only BTC, but also ETH, SOL, DOGE, and many other altcoins have followed suit, as if the entire market is in a collective celebration. The true drivers behind this wave of increases are the combination of favorable policies, institutional dollar-cost averaging, and safe-haven sentiment. But has the bull market really returned? Or is this just a brief climax ignited by emotions? Moving forward, the pace of rate cuts, geopolitical factors, tariffs… each variable is influencing the direction of this game. Odaily Planet Daily reminds investors to reasonably control position risks and use leverage derivatives cautiously.

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