What are the favourable factors as BTC breaks the 100,000 USD barrier again?

Deng Tong, Golden Finance

Cow back, return quickly!

In one night, the crypto market surged significantly, with Bitcoin rising again to over $100,000, peaking at over $103,000, and Ethereum even achieving an increase of more than 20%. The crypto market is in great shape. As of the time of writing, BTC has risen by 4.7%, priced at $102,804. Additionally, many other mainstream coins have also achieved double-digit increases.

What factors are driving the rapid recovery of the cryptocurrency market? How high can this round of market rise?

1. The United States and the United Kingdom Reach a Trade Agreement

The United States and the United Kingdom announced a trade agreement on May 8 (Thursday), marking the first formal trade deal reached by U.S. President Trump since initiating a global reciprocal tariff policy. Trump described the agreement as a “historic breakthrough,” while British Prime Minister Starmer stated that reaching a consensus on the anniversary of World War II victory is a “historic day.”

According to Trump, the UK will open its market to the US for a number of agricultural products, including American beef, ethanol, and “almost all the products our farmers produce,” with an expected export value involving “tens of billions of dollars.”

In the UK, Starmer pointed out that the agreement is “extremely important” for the automotive and steel industries. According to the UK Prime Minister’s Office (Downing Street), the US import tariff on British cars will be reduced from the original 25% to 10%. In addition, the US will also ease tariff measures on British steel and aluminum products.

Although the terms of the agreement are still to be further defined, the Trump administration is eager to announce this preliminary achievement, attracting market attention. Capital Economics analyst Paul Ashworth pointed out: “This reflects an increasing urgency from the Trump administration to seek room for compromise before the impact of tariff measures affects economic growth and inflation.”

Mr. Trump, for his part, denied exaggerating the importance of the deal, saying it was “the best thing that can be achieved so far.”

After Trump announced a trade agreement with the UK, U.S. Secretary of Commerce Wilbur Ross stated that enhancing market access for U.S. exporters would bring in billions of dollars in revenue. Ross said in the Oval Office: “They agreed to open their markets, which will create $5 billion in opportunities for U.S. exporters. We still have a 10% tariff, which will bring in $6 billion for the U.S.” Ross stated that the agreement would not put pressure on the UK economy, and British workers would not be negatively impacted by the deal. He added that the agreement means the UK can export 100,000 cars to the U.S., “paying only a 10% tariff.”

As a direct result of U.S. President Donald Trump’s announcement of a “trade agreement” with the UK, the price of Bitcoin surged above $100,000, the Dow Jones Industrial Average rose by 500 points, and the S&P 500 index increased by 1.47%.

Trump wrote in a Truth Social post: “There are many other deals that are in serious negotiation stages!”

The agreement between the US and the UK will mark a easing of global trade tensions, thereby boosting risk appetite across various markets, including cryptocurrencies.

2. Multiple states in the U.S. may initiate a cryptocurrency reserve competition

On May 6, the Governor of New Hampshire, Sununu, announced on social media that New Hampshire will allow the state to “invest in cryptocurrencies and precious metals” through a bill passed by the state Senate and House of Representatives. House Bill 302 was introduced in New Hampshire this January, and the bill would allow the state’s treasury department to use funds to invest in cryptocurrencies with a market capitalization of over $500 billion. “The state of ‘Live Free or Die’ is leading the future development of business and digital assets,” said a New Hampshire Republican in a post on X on May 6. With the signing of this bill, New Hampshire becomes the first state among several in the United States to consider establishing a strategic Bitcoin reserve through legislation, including an initiative in collaboration with the federal government.

Subsequently, Arizona Governor Katie Hobbs signed a bill on May 7 that allows the state to retain unclaimed cryptocurrency for at least three years and deposit it into the “Bitcoin and Digital Asset Reserve Fund.” House Bill 2749 allows Arizona to claim abandoned digital assets if there has been no response to any communications within three years. The state’s custodians can stake these cryptocurrencies to earn rewards or receive airdrops.

Meanwhile, on the same day, the Texas House Committee passed a Republican-backed bill with a vote of 9 to 4 aimed at establishing a Bitcoin reserve, which now only needs to be approved by a vote of the full chamber before being sent to Governor Greg Abbott’s desk.

The Digital Asset Investment Act of North Carolina will authorize the State Treasurer to invest 5% of any designated funds in “qualified digital assets.” The bill passed its second reading in the House on April 30 with a vote of 71 in favor and 44 against, and has been submitted to the Senate for review. The bill will also “examine the feasibility of allowing members of the state retirement income plan to make such investments (through cryptocurrency ETPs),” and study the establishment of a state reserve to hold seized or confiscated cryptocurrencies.

Ishmael Green, a partner at Diaz Reus law firm, stated that he expects around six states to follow New Hampshire’s example in the short to medium term—“because states are looking to hedge against inflation in addition to protecting their balance sheets.”

FalconX Research Director David Lawant stated that he also expects several more states to enact such laws within the next 6 to 12 months.

For more content, see “What are the Highlights of the New Hampshire Bitcoin Reserve Bill? Will it Inspire Other States to Follow Suit?”

“Which states are next after New Hampshire wins the cryptocurrency reserve race?”

3. SEC and Ripple Settlement

According to a statement from the U.S. Securities and Exchange Commission on May 8, the SEC and Ripple submitted a joint settlement letter to a New York court, requesting the lifting of the injunction against Ripple set for August 2024, and the return of $75 million from the $125 million civil penalty held in escrow to the cryptocurrency company.

The settlement comes at a time when the SEC is fully withdrawing from a series of cryptocurrency investigations and lawsuits initiated during Gary Gensler’s tenure. After Trump took office in January this year and appointed Paul Atkins, who has a friendly attitude towards cryptocurrencies, as the new SEC chairman, the SEC’s stance on cryptocurrency regulation has made a 180-degree turn.

However, Caroline Crenshaw, a commissioner of the U.S. Securities and Exchange Commission, harshly criticized the pending transaction in a statement on May 8, stating that it would undermine the regulatory authority of the agency over cryptocurrency companies and disrupt court rulings.

! dGxxHmqovoVwnfXHcXmgBJtoC5pEiiuyWCtBpK9P.jpeg

She stated: “This settlement agreement, along with the procedural dismantling of the SEC’s crypto enforcement program, has caused great harm to the investing public and undermined the role of the courts in interpreting our securities laws.” “At the same time, this settlement agreement, along with a series of dismissal decisions, has jointly harmed the credibility of our lawyers in court, and our lawyers are now being asked to take a legal stance contrary to what they were months ago.”

At the same time, Krenzsho believes that if Judge Torres accepts the settlement, it will erase “the investor protections we have won” and leave a “regulatory vacuum” until the cryptocurrency working group develops a regulatory framework. “This settlement agreement does not serve the best interests of our agency in protecting investors and the market. It brings more problems than answers.”

4. SEC Considers Formulating New Rules to Ease Security Token Offerings

Hester Peirce, a commissioner of the U.S. Securities and Exchange Commission (SEC), stated in a speech on May 8 that the commission is considering amending rules to allow companies more freedom to issue tokenized securities.

Pierce stated in his speech that regulators are “considering the potential issuance of exemptions for companies that use blockchain technology to issue, trade, and settle securities,” freeing them from certain registration requirements. For example, decentralized exchanges (DEX) may no longer need to register as “broker-dealers, clearing agencies, or exchanges.” The SEC has previously issued multiple Wells notices to DEXs like Uniswap, accusing them of failing to register as exchanges. Companies “should not be subject to inappropriate regulations that were established in many cases before the technology being tested emerged, and that may be invalidated due to the characteristics of that technology.”

V. Concerns about Stagflation are “Beneficial” to Crypto Assets

The Federal Reserve decided on May 7 to maintain interest rates at 4.25%-4.50%, which has enhanced the appeal of cryptocurrencies. Federal Reserve Chairman Jerome Powell emphasized in his post-meeting remarks that the risk of stagflation is rising—slow economic growth and persistent inflation—partly due to Trump’s tariff policy.

The Kobeissi Letter stated on X: “The Federal Reserve seems to expect that both inflation and unemployment rates will rise in the future,” and added: “They have paused interest rate cuts to observe which part of their dual mandate will heat up further. Uncertainty still exists.”

This environment has enhanced Bitcoin’s status as a store of value, often referred to as “digital gold.” Due to concerns that inflationary pressures will erode fiat currencies, investors are using Bitcoin as a hedging tool, similar to how cryptocurrencies surged during the monetary easing period in 2020.

Grayscale’s research director Zach Pandl believes: “The Federal Reserve is concerned about stagflation, and we think this outcome is favorable for Bitcoin.”

6. Technical Rebound in the Cryptocurrency Market

From a technical perspective, the current rise in cryptocurrency is part of a rebound that began from the support level of $2.4 trillion. The last time the market cap broke through the $3 trillion mark was on March 3, after which, on April 7, a sell-off triggered by tariffs caused the market cap to drop to $2.27 trillion. The current total market cap of the crypto market is $3.03 trillion, attempting to break through the resistance zone between $3.1 trillion and $3.25 trillion.

Daily cryptocurrency market capitalization chart.

If this happens, it would indicate that the bulls have the ability to maintain the upward trend and set their sights on the historical high of over $3.69 trillion. The daily RSI has steadily risen from the oversold level of 30 on April 7 to the current 68, indicating that bullish momentum is accelerating.

7. How much can this round of market rise?

Standard Chartered Bank: The target of $120,000 for the second quarter may be too low.

VALR Chief Marketing Officer Ben Caselin: As Bitcoin seeks to consolidate its value above $100,000, it is “very likely” to soon set a new high above $110,000. “The retail sector will only enter the traditional latter half of Bitcoin’s four-year cycle, which could reach a macro peak in the fourth quarter of this year.”

Charlie Sherry, the CFO of the Australian cryptocurrency exchange BTC Markets: Although we may see psychological resistance at the $100,000 mark, Bitcoin seems inevitably set to add another zero to its price.

Cryptocurrency entrepreneur Anthony Pompliano: The trade agreement means that the likelihood of us hitting a historic high in 2025 is increasing.