Bitcoin Approaches Record Highs: What’s Driving the Price Increase in May 2025?

Jakarta, Pintu News – Bitcoin is again nearing its all-time high amid increased fund flows into exchange-traded funds (ETFs) and looming inflation concerns in the global economy. The price of the crypto asset has surpassed Rp1.746 billion, reinforcing the view that investors are again taking an interest in high-risk assets such as cryptocurrencies.

Bitcoin Price and Recent Catalysts

On Monday, Bitcoin was trading above $106,000 or around Rp1.740 billion, approaching the previous record high in January of $108,786 or around Rp1.783 billion. This increase came after a strengthening trend over the past two weeks, as capital flows into spot Bitcoin ETFs in the United States increased.

According to data from CoinGecko, Bitcoin’s current value stands at just over $106,500 or Rp1.746 billion. Unlike previous rallies that were driven by retail speculation, the surge this time is underpinned by institutional inflows and relatively stable macroeconomic conditions.

Also Read: Top 5 Blockchains with the Largest TVL: Ethereum’s Dominance and Solana’s Rise!

Fund Inflows and Their Impact

Spot Bitcoin ETFs in the US recorded net inflows of more than $2.8 billion during the first half of May. The largest record daily inflow occurred on May 2 with $674.9 million. As of May 16, the total managed funds of Bitcoin ETFs have surpassed $122 billion or around Rp2,001 trillion.

Analysts from QCP Capital stated that the crypto market has the potential to experience continued gains, especially ahead of Coinbase’s entry into the S&P 500 index on May 19. According to them, this kind of event usually prompts portfolio rebalancing by passive fund managers.

Global Economic Factors and Inflationary Concerns

In addition to fund flows, global economic conditions have also strengthened Bitcoin’s position as an investment alternative. The US Federal Reserve kept its benchmark interest rate in the range of 4.25% to 4.50%, signaling a still cautious monetary policy amid mixed economic data.

However, inflation is again a concern after Walmart, the largest retailer in the US, announced that it will raise prices due to the impact of tariffs on imported goods such as electric vehicles, semiconductors, and consumer electronics. Walmart’s Chief Financial Officer called this rapid price increase unprecedented.

Bitcoin as an Inflation Hedge?

In the context of inflation continuing to be a threat, Bitcoin is again seen as a hedge against the declining purchasing power of fiat currencies. With new tariffs and supply chain disruptions, price pressures are expected to continue into the summer, creating a favorable environment for crypto rallies.

However, Bitcoin’s strengthening also remains dependent on the stability of market sentiment and the direction of medium-term interest rate policy. If inflationary pressures continue to rise and lead to changes in monetary policy, Bitcoin’s volatility could increase again.

Conclusion

Bitcoin is showing solid market strength by approaching previous price records, driven by inflows into ETFs, inflation concerns, and positive sentiment towards crypto assets. Despite the current strong momentum, investors are still advised to take a cautious read on the evolving global economic conditions.

Also Read: Will Dogecoin (DOGE) Break $0.25? Check out the Analysis!

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying andselling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Decrypt. Bitcoin Inches Closer to All-Time High-Here’s What’s Driving Its Price. Accessed May 20, 2025.
• Featured Image: Generated by AI