Whilst few could make the claim that the crypto market had become somewhat bearish, what makes the recent boom in crypto valuations interesting is the myriad of potential reasons behind it.
The biggest success is Bitcoin itself, which on 8th May returned to six-figure dollar valuations for the first time since January 2025 and throughout the month has been getting closer to its all-time high of over $108,000.
There are a lot of reasons for this, related to the closer integration and adoption of cryptocurrency by traditional finance organisations, a growing regulatory acceptance of the crypto market in whole or in part, making it easier to buy and use it, as well as wider geopolitical events.
The first two points are not entirely new; ever since the first spot Bitcoin ETFs, traditional finance organisations have begun to invest more heavily in the highest value tokens by market cap and the upcoming United States cryptocurrency draft bill is the continuation of discussions made earlier in the year.
The final aspect highlights the extremely odd place crypto currently finds itself in as part of the global financial market. It simultaneously has close ties to major global economies and the political headwinds they face, whilst simultaneously being seen as a financial hedge for difficult times.
Did Tariffs Lead To Crypto Boom Or Bust?
A major change in tariff policy sparked an outright trade war in April, one that, according to BBC reports, has only been slightly halted by a ceasefire in mid-May 2025.
However, its effects will reverberate throughout the global economy for months, if not years, as global trade adjusts to the new tariff landscape and the markets recover from the shocks found in April.
There are two main schools of thought regarding how this affected cryptocurrencies and particularly Bitcoin.
The first is that it promoted the further evolution of Bitcoin and other high-value tokens as flight-to-quality commodities similar to gold.
The typical pattern of the market is that during periods of economic instability, money moves out of stocks and into more stable assets. Gold was historically considered to be the absolute safest in this regard, because it would hold its purchasing power far better than currencies during periods of inflation.
This means that when money moves out of forex and stock markets, it is increasingly not only going into gold and cash-equivalent holdings but also into Bitcoin and Ether, further cementing them as a type of digital gold.
The other school of thought is that the opposite is happening; during the peak of the tariff wars in April 2025, Bitcoin hit its year-to-date low of $76,000, which followed the trend of the Nasdaq rather than the commodities market.
Part of the reason why people invest in crypto is its volatility; people do not tend to invest in gold unless they are betting against the market, but a lot of cryptocurrency investors are betting that the market conditions will encourage a further surge in crypto over the rest of the year and beyond.
Coinbase Brings Crypto To The Stock Market
One of the biggest cryptocurrency exchanges in the world, Coinbase, joined the S&P 500, marking the first time that a major cryptocurrency company has been considered a blue-chip stock in the United States.
This is the logical conclusion to the integration of traditional finance and DeFi, providing both opportunities and questions in the process.
The former, as was found with the spot ETFs in 2024, provides a huge opportunity for investors who have previously been averse to the volatility of the cryptocurrency market to invest by proxy.
A similar logic is found with the draft legislation that would provide a firm regulatory system for crypto in line with similar efforts by the UK government and Financial Conduct Authority. By regulating crypto, people are more confident to buy in and therefore the whole market benefits from greater certainty and security.
The questions that are raised revolve around the fundamental issue of decentralisation; if crypto assets are regulated and heavily linked to traditional finance, is crypto still able to fulfil the original purpose for which it was designed?
Legacy Of Satoshi
The development of Bitcoin’s white paper was a direct response to the Great Recession, a global financial crisis that still has lingering economic and geopolitical effects.
The idea of Bitcoin was to provide a bankless form of digital currency, one that would ideally avoid the contagion that caused so many banking institutions and funds to collapse and not have the same issues of bailouts for companies considered too big to fail.
If there were to be another financial crisis, would cryptocurrency be an escape from it, or has it become too interwoven with the centralised financial system? Only time and the markets will tell.