Bitcoin Breaks $100,000: Regulatory Clarity and Tariff-Driven Demand Fuel Crypto’s Resurgence

Bitcoin surged past the $100,000 milestone in early May 2025 for the first time since February, marking a critical turning point for the cryptocurrency. This rebound, driven by regulatory progress at Coinbase, bipartisan legislative momentum, and geopolitical tailwinds from U.S. tariff policies, underscores the maturation of crypto as a mainstream asset class.

The Regulatory Catalyst: Coinbase and the GENIUS Act

Coinbase’s advocacy for onchain interest regulations and its lobbying for bipartisan crypto legislation have been pivotal. The Senate’s GENIUS Act, now advancing toward final approval, establishes a framework for stablecoin oversight while preserving public blockchain innovation. This clarity has bolstered institutional confidence, with $5.3 billion flowing into Bitcoin ETFs over just three weeks.

Coinbase’s own stock (COIN) reflected this optimism, rising 22% in April as investors bet on regulatory tailwinds. Meanwhile, BlackRock’s Bitcoin ETF (IBIT) became the third-largest U.S. ETF by inflows, with retail demand accounting for half its holdings.

Tariff Policies: A Double-Edged Sword for Crypto

The Trump administration’s U.S.-China tariffs, initially a drag on crypto markets in Q1 2025, paradoxically fueled Bitcoin’s rise as a “safe haven” asset. With traditional markets rattled by inflation and interest rate uncertainty, Bitcoin’s role as a store of value gained traction.

The ETH/BTC ratio, a key indicator of crypto market sentiment, hit a five-year low of 0.02193, signaling a shift toward Bitcoin dominance. This trend was amplified by Ethereum’s Pectra upgrade, which improved staking efficiency and drew institutional interest.

Technical and Fundamental Drivers

• Price Momentum: Bitcoin’s 50-day moving average crossed above its 200-day line in late April, a bullish signal. Analysts project a further 10.78% rally to $107,223 by May 10, with a potential high of $132,545 by mid-May.
• Institutional Adoption: MicroStrategy’s Bitcoin holdings now total 528,185 BTC, while sovereign wealth funds like Mubadala allocated $400 million to Bitcoin ETFs.
• Legislative Backing: Senator Cynthia Lummis’s The Bitcoin Act and Pennsylvania’s Strategic Reserve Act signal growing political support for crypto as an institutional asset.

Risks and Challenges

Despite the optimism, risks linger. Volatility remains high, with Bitcoin’s 90-day volatility index at 42%—still elevated compared to equities. Meanwhile, Ethereum’s underperformance and lingering regulatory uncertainty in DeFi threaten broader market stability.

Conclusion: A New Era for Bitcoin

Bitcoin’s $100,000 milestone is no fluke. It reflects a confluence of forces: regulatory clarity, institutional inflows, and macroeconomic tailwinds. With the GENIUS Act nearing passage and Bitcoin ETFs unlocking mainstream access, the trajectory points upward.

By year-end 2025, Standard Chartered’s Geoffrey Kendrick predicts Bitcoin could hit $200,000, driven by $14 billion in annual ETF inflows and central bank diversification. Even skeptics must acknowledge the data: Bitcoin’s correlation with gold has strengthened to 0.75, and its adoption by Fortune 500 firms is accelerating.

The crypto winter of 2022-23 is over. Bitcoin’s ascent to $100,000—and beyond—is a testament to its evolution from speculative asset to a pillar of global finance.

As institutions reallocate capital and regulators provide guardrails, the question is no longer if Bitcoin will thrive, but how high it will soar.