Bitcoin's $97K Surge: How Institutional Inflows and Fed FOMC Fueled the Rally

On May 7, 2025, Bitcoin (BTC) surged to a 3-month high of $97,388, a milestone fueled by a perfect storm of institutional demand, regulatory clarity, and macroeconomic shifts. This event marked a turning point for the cryptocurrency market, as Bitcoin’s dominance hit a 4-year high of 55.3%, signaling a renaissance for its role as a "digital gold" asset.

The Catalyst: FOMC Anticipation and ETF Inflows
The Federal Reserve’s May 7 Federal Open Market Committee (FOMC) meeting loomed large over markets. While the Fed held rates steady, traders interpreted its cautiously dovish language as a signal that future rate cuts could be on the horizon. This reduction in risk-off sentiment unlocked liquidity, with Bitcoin ETFs leading the charge.
- Institutional Frenzy: U.S.-based Bitcoin ETFs recorded $420 million in inflows within 24 hours of the FOMC decision, led by BlackRock’s iShares Bitcoin Trust (IBIT), which alone saw $529.5 million in single-day inflows.
- Whale Activity: Long-term holders (LTHs) reversed a months-long selling trend, accumulating Bitcoin instead—a historically bullish sign.
Regulatory Clarity and Real-World Use Cases
The surge wasn’t just about macro bets. Regulatory developments and tangible use cases amplified Bitcoin’s appeal:
- XRP’s $50M Pharma Deal: On May 8, Florida-based pharmaceutical firm Wellgistics announced a $50 million treasury and vendor payment system using XRP, validating its utility for cross-border transactions.
- SEC Settlement Boost: The SEC’s April settlement with Ripple, which reaffirmed XRP’s non-security status, had already spurred a 10% rally in the token, setting the stage for broader institutional adoption.
Technical and On-Chain Strength
Bitcoin’s price climb was underpinned by robust on-chain metrics:
- Active Addresses: Bitcoin’s active addresses rose 8% to 1.1 million (Glassnode), signaling heightened user engagement.
- Dominance Shift: Bitcoin’s 55.3% dominance—its highest since April 2021—reflected capital fleeing volatile altcoins for the relative stability of BTC.
Analyst Takeaways and Risks
- "Bitcoin is now a macro hedge," said Gadi Chait of Xapo Bank, citing whale accumulation and ETF demand as key drivers.
- Volatility Risks: While the $100,000 psychological threshold looms, traders remain cautious. The FOMC’s next move and U.S.-China trade tensions could reverse momentum.
Conclusion: Bitcoin’s New Paradigm
The May 7 surge underscores Bitcoin’s evolution from a speculative asset to a strategic portfolio component. With ETFs unlocking mainstream access and institutional capital flooding in, Bitcoin’s $97,388 milestone isn’t just a price point—it’s a sign of structural change.
For investors, the takeaway is clear: Bitcoin’s role as a neutral, global store of value is here to stay. As central banks grapple with inflation and geopolitical risks, Bitcoin’s combination of scarcity, liquidity, and institutional validation positions it to outperform in turbulent markets.
The $100,000 milestone is no longer a distant dream—it’s a question of when, not if.
Comments
No comments yet