What is the reason for the surge in Bitcoin?

Bitcoin has soared to more than $110,000 recently, setting a record high, mainly driven by the following key factors: 1. Policy and regulation are beneficial to the progress of US stablecoin legislation: The US Senate passed the GENIUS Stablecoin Act, which requires stablecoin issuing institutions to meet strict conditions such as full reserves and regular audits, and strengthens the market's confidence in cryptocurrency compliance1. Hong Kong regulatory framework is implemented: The Hong Kong Legislative Council passed the "Stablecoin Bill" to establish a clear regulatory framework for the issuance of stablecoins, further enhancing the market's acceptance of cryptocurrencies1. 2. Institutional funds continue to flow into spot Bitcoin ETF Fund inflow: In May, the net inflow of Bitcoin spot ETF reached US$3.6 billion, indicating that institutional investors' interest in Bitcoin continues to heat up 7. Corporate reserve strategy: Multiple companies (such as Strategy and Twenty One Capital) purchase large quantities of Bitcoin, further boosting demand 67. 3. Macroeconomic environment improves US dollar depreciation: The US dollar index (DXY) fell from 104 at the end of 2024 to below 95 in May 2025, prompting investors to seek non-sovereign assets such as Bitcoin as hedge tools11. Trade tensions ease: Improved global trade relations (such as the new US-UK trade agreement, China-US economic and trade talks) boosted market risk appetite4. 4. Supply tightening and halving effect Bitcoin halving in 2024: Bitcoin experienced its fourth halving in April 2024, with a decrease in new supply, which may push up the price 7 in the long run. illiquid supply hits a new high: Glassnode data shows that Bitcoin’s illiquid supply has reached a historical peak, indicating that there are more long-term holders and further tightening of market supply 1. 5. Market sentiment and speculative factors Trump policy expectations: After Trump is elected as the president of the United States, the market expects it to promote looser cryptocurrency regulation and may even establish a "national strategic Bitcoin reserve" 810. "Short squeeze" market: Some cryptocurrencies (such as Ethereum) have large-scale short positions closed, further pushing up the price by 4. 6. Technology upgrade and infrastructure development Ethereum Pectra upgrade: Ethereum's technological improvements have enhanced network performance and driven the entire crypto market to rise 4. Lightning Network expansion: Bitcoin’s second-layer solution (such as Lightning Network) grows capacity, increasing its payment and transaction application potential