Bitaigen Research Bitcoin’s May Momentum: Institutional Flows, Fed Stance, and Tech Upgrades
Bitcoin broke the $78,000 barrier on Friday, April 26, marking its highest level since early February. The rally followed a three‑day surge that lifted the cryptocurrency by roughly 4.2% from $75,200 on Monday. Analysts at CryptoQuant noted that on‑chain activity surged, with the number of active addresses climbing to 1.04 million, the strongest weekly tally of the year.
Institutional demand has intensified ahead of the May calendar. BlackRock’s iShares Bitcoin Trust (IBIT) recorded net inflows of $1.48 billion in the week ending May 1, according to data from CoinShares. Grayscale’s Bitcoin Trust (GBTC) saw a modest outflow of $210 million in the same period, suggesting a shift toward newer spot ETFs. The combined weekly net inflow across the three largest U.S. spot Bitcoin ETFs—IBIT, Fidelity Bitcoin ETF (FBTC), and Valkyrie Bitcoin Fund (BTF)—exceeded $2 billion, the highest aggregate since the launch of spot products in January 2024.
Monetary policy also appears to be easing the macro backdrop. The Federal Reserve kept its benchmark rate at the 5.25%–5.50% range after the March 20 meeting, ending a string of 11 consecutive hikes. The pause has reduced the risk premium on risk‑on assets, a trend echoed in the Bloomberg Commodity Index, which fell 0.6% in the first week of May. Treasury yields on the 10‑year note slipped to 4.28% on May 2, its lowest level since November 2023, further supporting liquidity for speculative positions.
On the technical front, the network’s upgrade cycle is delivering measurable gains. Taproot’s activation in November 2021 continues to lower transaction fees, with average cost per transaction now hovering around $0.85, down 22% from the pre‑Taproot average. Lightning Network capacity reached a record 3.2 million BTC, according to data from 1ML, indicating growing off‑chain scalability. Moreover, the upcoming “Orchid” soft fork, slated for the third week of May, promises to enhance privacy features and could attract additional institutional interest.
Overall, Bitcoin’s price action, institutional inflows, and supportive macro conditions converge to create a robust set‑up for the month. The cryptocurrency traded near $78,400 on Thursday, while the broader digital‑asset market posted modest gains.
⚠️ Risk Disclaimer: Crypto prices are highly volatile. This is not investment advice.
