Bitcoin surpasses $100,000

Written by Linh Tran, Market Analyst atXS.com

Bitcoin (BTC) has officially surpassed the $100,000 mark, marking a major milestone in the recovery journey of the world’s largest digital asset. This rally continues to be supported by a combination of favorable macroeconomic factors, including progress in U.S.–China trade relations, steady institutional inflows, and expectations of monetary policy easing in the second half of the year.

One of the key drivers behind Bitcoin’s recent surge is the positive developments in U.S.–China trade relations. After months of escalating tensions and tit-for-tat tariff measures in Q1, the two largest economies in the world held a direct meeting in Geneva, Switzerland, marking a significant breakthrough in diplomatic dialogue.

According to U.S. officials, the latest round of trade negotiations went smoothly, and a preliminary trade agreement was reached, under which China agreed to terms aimed at reducing the U.S. trade deficit in the coming period. Chinese officials also acknowledged positive progress in the talks and indicated that a joint statement with the U.S. would be issued by the end of Monday.

This news quickly injected a wave of optimism into global markets, as expectations for a new bilateral trade agreement shifted from speculation to a more tangible reality. The resumption of talks and signs of mutual concessions between the two sides have helped ease global macroeconomic tensions, providing a favorable backdrop for risk assets like Bitcoin to resume their upward momentum.

The improvement in U.S.–China relations has helped reduce pressure on risk assets, including equities, commodities, and cryptocurrencies. BTC — which is highly sensitive to geopolitical shocks and global capital flows — has benefited as investor sentiment shifts back toward a “risk-on” stance, prompting increased demand for Bitcoin as a growth asset rather than a short-term hedge.

Moreover, the U.S. dollar has shown signs of stabilization as trade-related risks subside, prompting a reallocation of international capital flows into alternative assets, with Bitcoin emerging as one of the preferred options.

A critical structural factor supporting BTC’s rally is the continued inflow of institutional capital into spot Bitcoin ETFs. Since mid-April, major ETF products such as BlackRock’s IBIT, Fidelity’s FBTC, and Ark Invest’s ARKB have recorded almost daily net inflows, signaling that long-term investor confidence is being re-established.

The stability of institutional flows acts as a foundation for BTC’s price, while also creating a spillover effect into other financial products such as futures contracts and crypto-related equities.

In addition, the market continues to maintain the expectation that the Federal Reserve will begin its rate-cutting cycle in September, amid signs of slowing economic growth and easing inflationary pressures. This week, all eyes will be on the U.S. Consumer Price Index (CPI) and Core CPI (MoM) data for April, which could play a crucial role in shaping the market’s interest rate outlook.

If the CPI data show that inflation continues to cool, expectations for monetary easing will be further reinforced — providing support for risk assets such as Bitcoin. On the other hand, if inflation picks up again, the Fed may maintain its cautious stance, posing a short-term downside risk for BTC.