Cause Analysis: Why the possibility of Bitcoin price breaking 110,000 USD in May has increased

Source: Cointelegraph Original text: "Reason Analysis: Why the Possibility of Bitcoin Price Breaking $110,000 in May Increases"

Key Points:

According to Bitcoin Suisse analysis, Bitcoin (BTC) has performed strongly because it can perform well in both risk-seeking and risk-averse environments.

The Sharpe ratio of Bitcoin at 1.72 is second only to gold, highlighting its characteristics as a mature asset and providing better risk-adjusted returns.

A buyer-driven market shows strong institutional and retail interest, which could trigger a supply squeeze and reach new highs in May.

The price of Bitcoin (BTC) has surpassed the $100,000 mark for the first time since January, sparking market speculation that it will set a new historical high of over $110,000 in May. According to cryptocurrency custody service provider Bitcoin Suisse, the bullish momentum of BTC since the U.S. presidential election stems from its ability to thrive in both risk-on and risk-off environments.

The "Industry Summary" report data highlights a Sharpe ratio of 1.72 for Bitcoin, which is a key financial metric that measures risk-adjusted return by dividing the asset's average return rate (minus the risk-free rate) by its volatility. A higher Sharpe ratio reflects better risk-adjusted returns, and in 2025, Bitcoin's strong score is second only to gold, highlighting its increasingly mature characteristics as an asset.

In the past two quarters, Bitcoin has demonstrated its exceptional dual investment value. In a risk-averse environment, it serves as a macro hedge tool, effectively benefiting from geopolitical tensions and concerns over de-dollarization. In a risk-on market, it performs as a high-confidence growth asset, with over 86% of the Bitcoin supply currently in profit.

As shown in the chart, since November 2024, Bitcoin has maintained a positive return rate across various key market stages. Dominic Weibei, head of the research department at Bitcoin Suisse, stated:

"In the current market environment, Bitcoin has become a Swiss Army knife asset. Whether the stock market is strong or bonds are collapsing, Bitcoin operates based on its supply and demand fundamentals, providing a winning investment portfolio that traditional assets cannot match."

According to Cointelegraph, based on the Fidelity Digital Assets Q2 2025 signal report, Bitcoin is preparing for the next round of rises in the "acceleration phase." Fidelity analyst Zack Wainwright explained that a characteristic of Bitcoin entering a phase of explosive price increase is "high volatility accompanied by high returns."

On May 7, the cumulative difference in the 90-day spot trading volume of Bitcoin reached (CVD), marking the first time since March 2024 that the market has shifted to being buyer-dominated. This indicator measures the net difference between market buying and selling volumes, reflecting the activity intensity of both buyers and sellers over a longer period.

This shift towards an "active buy dominance" trend is primarily driven by increased institutional investment interest and inflows into spot Bitcoin ETFs, with over $4.5 billion in spot fund inflows since April 1.

This shift in demand structure and the strong Sharpe ratio of Bitcoin (BTC) may enable Bitcoin to fully leverage the current market environment. As businesses and institutional investors rush to buy Bitcoin, the supply shortage may drive prices above the $110,000 mark in May.

This article does not contain investment advice or recommendations. All investment and trading activities carry risks, and readers should conduct thorough research before making decisions.

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