Bitcoin's $100,000 Milestone: Trade Deal Optimism Fuels Crypto's Surge

On May 8, 2025, Bitcoin breached the $100,000 threshold for the first time since January, marking a historic milestone driven by geopolitical optimism and institutional momentum. The catalyst? The U.S.-U.K. "Economic Prosperity Deal," a trade agreement announced by President Donald Trump and U.K. Prime Minister Keir Starmer that eased tariffs and signaled a thaw in global trade tensions.

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The Trade Deal’s Impact: More Than Just Tariffs

The Economic Prosperity Deal slashed tariffs on critical industries:
- Automotive: U.S. tariffs on U.K. cars dropped from 27.5% to 10%, benefiting brands like Jaguar Land Rover.
- Steel and Aluminum: Eliminated 25% tariffs on imports to the U.S., averting a crisis in the U.K.’s struggling steel sector.
- Ethanol and Beef: Zero tariffs for U.S. ethanol in the U.K. and a tariff-free quota of 13,000 metric tons for U.K. beef exports to the U.S.

While the deal retained a 10% universal tariff on U.K. goods, its symbolic significance was undeniable. Analysts at the Bank of England noted it reduced “economic uncertainty,” while the S&P 500 futures surged 0.7% ahead of the announcement. .

Institutional Inflows and Bitcoin’s Dominance

The rally wasn’t just about trade deals. Institutional adoption reached new heights:
- Bitcoin ETFs saw $1.8 billion in inflows in the week leading up to the deal, reversing earlier outflows.
- MicroStrategy’s Bitcoin holdings, already 555,450 BTC, continued to grow, while Abu Dhabi’s sovereign wealth fund and the Swiss National Bank expanded their crypto allocations.
- Bitcoin’s market dominance surged to 60%, its highest since 2021, as investors rotated out of altcoins into the perceived “safer” asset.

Technical Drivers and Overbought Risks

Bitcoin’s climb faced resistance at $98,250–$98,800, but the trade deal’s optimism overcame short-term technical hurdles. Traders liquidated $116 million in bearish bets, while the RSI neared overbought territory. Analysts warned of a potential correction to $90,000–$92,000, but long-term bullish sentiment dominated:
- Standard Chartered projected Bitcoin could hit $120,000 by Q2 2025.
- Unchained’s Joe Burnett speculated a $250,000 price tag by year-end, citing macroeconomic reallocations away from U.S. assets.

Risks Looming Over the Rally

Despite the euphoria, risks remain:
- Fed Policy: The Federal Reserve’s refusal to cut rates (held at 4.25%–4.5%) could dampen risk appetite if inflation resurges.
- Trade Deal Limitations: The digital services tax on U.S. tech companies remains unresolved, and Section 232 tariffs on other goods linger.
- Data Tests: U.S. budget figures and CPI data due in mid-May could test Bitcoin’s ability to sustain gains.

Conclusion: A New Era for Bitcoin?

Bitcoin’s $100,000 milestone is more than a price tag—it’s a reflection of macroeconomic shifts and institutional trust. With $35 billion in ETF inflows since 2024 and a market dominance nearing 60%, Bitcoin is solidifying its role as a global hedge against geopolitical and fiscal instability. While technical corrections are inevitable, the Economic Prosperity Deal has set a precedent for future trade agreements, potentially unlocking even higher valuations.

As Geoff Kendrick of Standard Chartered noted, “This isn’t just about tariffs—it’s about Bitcoin’s evolution as a reserve asset.” For now, the crypto market’s eyes are fixed on whether the $120,000 barrier—and beyond—will fall by year-end. The verdict? The bulls are in control, but the path ahead is littered with potholes.

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