Dogecoin Surges 10%, Bitcoin Nears $104K Amid Renewed ‘Risk-on’ Sentiment

The crypto market is brimming with optimism as Dogecoin (DOGE) rallies over 10% and Bitcoin (BTC) edges toward $104,000, fueled by a cocktail of macroeconomic tailwinds, regulatory clarity, and institutional inflows. This “risk-on” environment reflects a turning point for digital assets, with investors shifting toward high-beta bets as geopolitical and monetary policy risks stabilize.

The Catalysts Driving the Rally

1. Geopolitical Shifts and Regulatory Clarity

The U.S. and global markets have navigated a turbulent macro environment, with President Trump’s universal 10% tariffs creating a 20% effective import tax and dragging U.S. GDP by 2.3%. Yet, Bitcoin’s resilience—maintaining stability amid equity declines—has cemented its role as a “risk-dynamic” asset. Meanwhile, regulatory progress has been pivotal:
- The SEC’s settlement with Ripple Labs removed years of uncertainty over XRP’s status, boosting altcoin confidence.
- Bipartisan bills like the GENIUS Act and STABLE Act are advancing to regulate stablecoins, fostering institutional trust.

2. Monetary Policy and Liquidity Dynamics

The Federal Reserve’s pivot toward potential rate cuts—pricing in 75 basis points of easing by year-end—has reignited liquidity-driven speculation. Bitcoin’s performance historically correlates with global M2 money supply, which stabilized after contracting by $720 billion in early 2025. Analysts like Geoff Kendrick of Standard Chartered predict Bitcoin could hit $120,000 by year-end if M2 trends improve.

3. Institutional Adoption and ETF Momentum

• Bitcoin ETFs like BlackRock’s iShares Bitcoin Trust (IBIT) saw $3 billion weekly inflows in April, with IBIT managing $56 billion by May 2025.
• Ethereum’s lagging ETF adoption (just 7.7% of Bitcoin’s ETP assets) could reverse as stake-enabled ETH ETFs gain traction. These innovations could unlock billions in institutional capital, narrowing Ethereum’s valuation gap with Bitcoin.

4. Technological Upgrades and Utility Growth

Ethereum’s Pectra upgrade in May 2025 enhanced efficiency, reducing gas costs and expanding transaction limits. Layer-2 solutions like Optimism and Arbitrum saw 38–42% year-over-year volume growth, driving DeFi TVL to $130 billion. This utility-driven expansion positions Ethereum as a “real-world asset”, complementing Bitcoin’s macro narrative.

Why Dogecoin Surged 10%

While Bitcoin and Ethereum dominate headlines, Dogecoin’s 10% surge to $0.224578 on May 10 reflects broader altcoin momentum. Retail investors, buoyed by risk-on sentiment, are rotating into meme coins and underperformers. Additionally, state-level adoption—like Arizona’s bill to allocate 10% of its reserves to Bitcoin—signals institutional acceptance, indirectly boosting retail confidence in even speculative assets like DOGE.

Key Risks Looming Over the Rally

• Tariff-Induced Stagflation: Persistent inflation (core PCE above 3.5%) and trade disputes could reignite risk-off cycles.
• Regulatory Overreach: Overly restrictive policies (e.g., the EU’s Markets in Crypto-Assets Regulation) may stifle innovation.
• ETF Outflows: Weakness in crypto ETFs, such as ByBit’s $1.5 billion outflows due to breaches, could undermine institutional trust.

Conclusion: A Fragile but Momentum-Driven Rally

The crypto market’s ascent to $104K for Bitcoin and a 10% DOGE surge underscores its evolution as a legitimate macro asset class. With $56 billion in Bitcoin ETFs, Ethereum’s utility upgrades, and regulatory clarity on the horizon, the sector is poised for further gains—if geopolitical risks abate and liquidity flows persist.

However, the path to $120K for Bitcoin or sustained DOGE momentum hinges on resolving tariff-driven inflation, securing Fed easing, and avoiding regulatory missteps. For now, the “risk-on” trade is alive—but traders must tread carefully, as macro headwinds could quickly shift sentiment.

The data is clear: crypto’s resilience in turbulent times has turned skeptics into believers. But the question remains—can this momentum outlast the storm?