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May 7, 2025 In an effort to reassure the markets, the Federal Reserve said that it would keep the federal funds rate, its main interest rate, unchanged at 4.50 percent because of growing uncertainty about the economy. An acceleration in inflation and worries that the job market may weaken, in part as a result of recent tariffs, have more recently led to the pause.
The Fed chair, Jerome Powell, repeated that future policy decisions would be data-dependent, and he walked back some of the doomsday rhetoric that had spooked so many investors, who were starting to get the sense that the Fed was fretting too much that a tight labor market was overheating the economy.
This wait-and-see stance is, economists say, a reflection of increasing worries about the potential for stagflation.
Bitcoin Nears $100,000 Mark
As of May 8, 2025, Bitcoin (BTC) rallied to $98,863.00, approaching the highly anticipated $100,000.00 level! This price hike indicates that market sentiment has improved recently, with large institutional inflows acting as the core driver. Reportedly, BlackRock’s bitcoin ETF has recently registered more than $37 million worth of inflows on a daily basis.
The $100,000 level has a psychological significance and tends to result in increased market speculation, analysts say. Noteworthy, the continued rally would appear to speak to a growing bullish sentiment around Bitcoin as a hedge against macroeconomic uncertainty — such as the Federal Reserve’s decision to maintain interest rates at current levels.
Institutional Investments Are Driving Bitcoin’s Rally
Interest in Bitcoin among institutions is increasing, with inflows into BlackRock’s Bitcoin ETF reaching a whopping $37.2 million on May 8, 2025. This rally demonstrates growing confidence from big investors about Bitcoin’s future value, particularly as macroeconomic uncertainty and the Fed’s stable rate policy continue.
However, differing numbers from the day shown by Franklin’s Bitcoin ETF, which saw no inflows that day, are indicative of different levels of institutional involvement between fund providers. Analysts read this as a selective level of confidence, with fund track record and strategy weighing heavily on investor decision-making.
Whale Movements On-Chain Suggests Returning Confidence
Big Bitcoin Whale returns, buying 100 BTC worth around $9.78 million after price surge A significant Bitcoin whale has bought back into the market 100 BTC for around $9.78 million following a recent surge in price, data has revealed. The same investor sold an equivalent amount of Bitcoin four months ago at $101,874 per coin and has been sitting on the sidelines ever since.
The move shows increased confidence in the current price of Bitcoin and may also indicate anticipation of even higher prices. The type of activity whales can provide is closely watched, as these trades can impact market sentiment and are indicative of institutional-grade conviction.
Analysts Recommend ‘Hold in May’ Strategy
Against the popular “sell in May and go away” saying, the K33 Research team is advising Bitcoin investors to not sell their Bitcoin holdings in May 2025. In their opinion, there are unprecedented market catalysts this year, including heightened political activity, shifting monetary policy, and increased institutional participation, all of which favor a longer-term holding strategy.
Indeed, experts claim that these converging factors may push Bitcoin’s returns beyond historical seasonal tendencies; that is why May is potentially an ideal month to maintain exposure to the asset class.
Bitcoin Price Predictions
Analysts have been looking at Bitcoin’s price with rose-colored glasses also. By May 12, 2025, CoinCodex expects that BTC will reach an exchange rate of $121,243, a 24.86% surge from its current price.
Projects Bitcoin will hit $101,150 on May 8 and $102,350 on May 9. Looking out a little further, Joe Burnett, Market Research Director at Unchained, predicts Bitcoin could rise to $250,000 by December 2025 because of its unmatched monetary properties and potential for mainstream adoption.
Conclusion
With Bitcoin nearing $100,000, investors increasingly focus on economic data and institutional activity. The Fed’s decision to leave interest rates unchanged and the increase in institutional interest, as well as positive sentiment in the market, may be a good signal for Bitcoin’s further development. But investors should stay alert and weigh market conditions when deciding where to put their money.
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FAQs
1. Why did the price of Bitcoin just rise if the Fed cut rates?
Momentum for Bitcoin came after the Federal Reserve left interest rates unchanged, boosting confidence in the markets during a time of macroeconomic uncertainty and rising institutional flows.
2. What $100K levels would mean to investors in Bitcoin
The psyche/psychology/resistance of $100K tends to draw new interest, bullish excitement, and high volume to the market.
3. Are big investors supporting Bitcoin at the moment currently?
Yes, large inflows into Bitcoin ETFs, particularly BlackRock’s, confirm solid institutional backing and increasing long-term confidence in the crypto asset.
4. Should retail investors buy or sit on the sidelines during this rally?
Analysts recommend not selling but holding, supported by 2025’s unique catalysts, including political events, Fed policy, and the rise of institutional activity fueling upward momentum.
Glossary of Key Terms
1. Federal Funds Rate
The interest rate at which American banks lend to each other overnight is set by the Federal Reserve. It sets the cost of borrowing and impacts liquidity within the economy.
2. Bitcoin (BTC)
Described as a decentralized digital currency (it is an online version of cash), the system was designed to work without a central bank or single administrator and is sometimes as a “peer-to-peer currency.”
3. Exchange-Traded Fund (ETF)
A financial vehicle, traded on a stock exchange, that is a type of investment fund. The Bitcoin ETF essentially permits institutions to invest without holding Bitcoin.
4. Institutional Inflows
Major money in the form of capital investment by financial institutions (banks, hedge funds, asset managers) into markets (cryptocurrencies) indicates confidence and long-term interest.
5. Whale
A term used to describe a person or an organization that owns a significant holding of a digital currency. They can have a big effect on market prices and sentiment.
6. Psychological Price Level
A convenient price level (for example, $100,000 in the case of Bitcoin) that traders and investors monitor and which can provoke heightened activity or resistance.
7. Quantitative Tightening (QT)
A monetary policy in which a central bank seeks to reduce the money supply by selling government securities or allowing them to mature and then using the proceeds to buy back a portion of the securities previously issued has the effect of raising interest rates.
8. “Sell in May and Go Away”
An old market saw that investors are advised to sell stocks in May to avoid summer turbulence. It’s been putting up tent-like resistance for months on end, preventing BTC from achieving all-time highs. Analysts are now asking the question as to whether it is still relevant in crypto.
For unique 2025 catalysts, Kraken’s Dan Held claims It’s been putting up tent-like resistance for months on end, preventing BTC from achieving all-time highs.
“The US dollar,” Kraken growth lead Dan Held told RealVision, “is ultimately not going to be the world’s reserve currency in the long term.
