En 
De - Performance: May’s rally confirms Bitcoin has likely passed its bottom and remains in a bull market - briefly touching $112,000 - fuelled by reversing ETP flows, corporate bids, and renewed risk appetite. While short-term “bull fatigue” from the Vegas conference and Meta’s BTC rejection may prompt consolidation, on-chain fundamentals (persistent ETF and corporate buying) suggest any dip is a buying opportunity. Ethereum’s Pectra upgrade drove altcoin outperformance, lifting the MSCI Digital Assets Select 20 above Bitcoin, though most altcoins lagged. With bitcoin valuations near fair value and a potential US business-cycle upturn, this bull run could extend beyond a typical four-year cycle.
- Macro: Heightened fiscal and sovereign‐debt risks are driving up long‐term yields and straining traditional 60/40 portfolios, even as easing policy uncertainty and accelerating global money‐supply growth create a powerful macro tailwind for Bitcoin. With bond vigilantes pressuring both US and Japanese debt markets - and Bitcoin’s inverse correlation to Treasuries at record levels - our models still point toward a potential Bitcoin value north of $200k by late 2025, making it a compelling portfolio hedge as traditional asset diversification breaks down.
- On-Chain: Corporate adoption continues to drive Bitcoin demand in 2025 - highlighted by announcements from GameStop to Paris St Germain - while private holders have largely redistributed coins to institutional buyers, including public companies and ETPs. After several months of outflows, global Bitcoin ETPs saw renewed inflows in May, with US spot ETF demand alone exceeding new mining supply. Corporate buyers remain price‐agnostic and sticky, whereas ETP demand is more cyclical and macro‐sensitive, though long‐term institutional underexposure suggests structurally rising flows. Quantitative models and declining exchange balances support a continued bull market, with Bitcoin on track toward $200,000 in H2 2025.
Chart of the Month
Performance
The performance in May was characterised by an ongoing recovery in bitcoin and cryptoasset markets. Bitcoin even reached a new all-time high of $112,000 during May though only briefly. Bitcoin also closed at the highest monthly closing price in May as well.
The main reasons behind this continued market recovery were mostly related to a reversal in global bitcoin ETP flows as well as a relentless bid for bitcoins from publicly listed companies. Global risk appetite returned with declining US economic policy uncertainty at the margin which was enough to lead to a recovery in traditional financial markets as well.
A recovery in global risk appetite was quite likely though due to the extreme sentiment readings we saw in April. In fact, we made the following statement in our May report last month:
“However, we think that due to very pessimistic sentiment in April, improving on-chain data and a rising tailwind from monetary policy as well as a weaker Dollar that Bitcoin has most-likely passed the bottom already. Investors should reposition their exposure for a continuation of the bull market.”
A rather interesting macro development was the significant decline in correlations between bitcoin and US Treasury futures (Chart-of-the-Month). Over the past 3 months, the correlation between bitcoin and US Treasury futures has declined to record low levels. This happened during a time when the sustainability of US fiscal debt was increasingly being questioned.
It begs the question whether traditional multiasset investors have been selling US Treasury bonds to buy bitcoin during that time period? Although correlation does not necessarily mean causation there is increasing evidence that investors are divesting from government bonds to buy bitcoin.
That being said, the market has so far failed to maintain these new all-time highs sustainably. In general, the market lacks new major catalysts after the world's biggest bitcoin conference in Las Vegas just concluded last week without major market moving announcements.
Amongst others, the conference saw announcements from Pakistan to establish a Strategic Bitcoin Reserve and also another announcement from the Champions League winner Paris St Germain to establish bitcoin as corporate treasury asset.
However, high sentiment readings which we saw in the run-up to the conference appear to have created a short-term “bull market fatigue”. This makes a short-term consolidation in prices quite likely, especially following the news that Meta's shareholders rejected the proposal to adopt bitcoin as a corporate treasury asset.
That being said, on-chain fundamentals still point towards a continuation of the bull market especially, since the US spot Bitcoin ETF demand and corporate treasury demand continue to create a pervasive supply deficit on exchanges.
Lower prices should generally be regarded as an attractive buying opportunity especially on account of the fact that bitcoin valuations still appear to be close to “fair value” and that a renewed business cycle upturn in the US could potentially extend the current bull market far beyond the classical 4-year cycle.
A closer look at our product performances reveals that especially Ethereum outperformed Bitcoin significantly after the successful Pectra update at the beginning of the month decreased the uncertainty around Ethereum's future roadmap significantly. Solana also managed to outperform bitcoin in May, which led to an overall outperformance of the MSCI Digital Assets Select 20 index vis-à-vis bitcoin.
Performance dispersion among altcoins has increased to the highest level since March following the major outperformance of ETH, which fuelled a rather uncorrelated rally in altcoins at the beginning of May. That being said, only 30% of our tracked altcoins managed to outperform bitcoin on a monthly basis.
Bottom Line: May's rally confirms Bitcoin has likely passed its bottom and remains in a bull market - briefly touching $112,000 - fuelled by reversing ETP flows, corporate bids, and renewed risk appetite. While short-term “bull fatigue” from the Vegas conference and Meta's BTC rejection may prompt consolidation, on-chain fundamentals (persistent ETF and corporate buying) suggest any dip is a buying opportunity. Ethereum's Pectra upgrade drove altcoin outperformance, lifting the MSCI Digital Assets Select 20 above Bitcoin, though most altcoins lagged. With bitcoin valuations near fair value and a potential US business-cycle upturn, this bull run could extend beyond a typical four-year cycle.
Macro Environment
The macro environment in May was characterized by heightened economic uncertainty although some leading indicators already improved at the margin. Peak economic policy uncertainty in the US appears to be behind us, which has also supported the grind higher in bitcoin and cryptoassets.
Concerns over fiscal irresponsibility also led to a slow increase in yields. According to the latest estimates by the Congressional Budget Office (CBO), the tax cuts planned by the Trump administration are about to add $3 trillion in additional deficit over the next 10 years.
As a result, US Treasury term premia have continued to increase to new cycle highs signalling that bond investors demand a higher compensation for holding long-term Treasury bonds vis-à-vis short-term Treasury bonds. Credit Default Swaps (CDS) on 10-year US government bonds have also remained elevated in May.
Other major sovereign bond markets like Japanese Government Bonds (JGBs) also experienced increasing pressures from so-called “bond vigilantes”. In fact, the 30-year JGB yield reached the highest level on record in May. One of the key reasons is the dismal liquidity conditions due to low demand, which makes an intervention by the BoJ amid fiscal debt sustainability increasingly likely.
An interesting market development in this context is the increasing negative correlation between Bictoin and US Treasury bonds. In fact, bitcoin's 60d correlation to 10-year US Treasury bond futures has never been more negative (Chart-of-the-Month):
We have frequently written about the investment case for bitcoin as an alternative “portfolio insurance” against sovereign default (see our model estimates here).
The updated estimates still imply that a single bitcoin should hypothetically be worth around 252k USD today based on this particular model. This should serve as a rough benchmark for where bitcoin could be heading towards once sovereign default risks become increasingly prent.
It also dovetails separate price estimations that we derive from on-chain models like the Bitcoin Autocorrelated Exchange Rate Model (BAERM) presented in the next chapter.
Although high sentiment readings could lead to a short-term pull-back in prices in the short term, there are important fundamental reasons why bitcoin will likely approach 200k USD towards the end of 2025.
A potential negative catalyst for such a temporary pull-back could be continued global growth woes and a general decline in risk appetite due to ongoing US recession risks.
Employer demand is already softening: Indeed's Job Postings Index is down -4.5% in 2025 already and high-frequency indicators for job openings like the LinkUp 10,000 index imply that job openings continue falling. Only 34% of small businesses report unfilled openings, the lowest since Jan 2021. Regional Fed surveys (NY, Philly, Richmond) show negative hiring outlooks, while the unemployment rate has climbed from 3.5% to 4.2% amid rising labour force participation and jobless claims continue to grind higher as well. Consumer and CEO sentiment have likewise weakened, with the Michigan index at 50.8 (May 2025) – its second lowest ever – and CEO confidence tumbling in April.
The reason why that is that relevant is the fact that consumer sentiment tends to lead changes in real personal consumption expenditures and retail sales. As is widely known, consumption spending in the US accounts for around 70% of GDP.
That being said, any renewed weakness in global growth expectations should have less of an impact on bitcoin's performance, as the importance of this macro factor has continued to decline over the past month (see macro factor area chart in the appendix).
Moreover, if PCE growth does indeed decelerate as predicted, this should add increasing pressure on the Fed to continue with its interest rate cutting cycle.
An additional easing by the Fed due to the abovementioned US recession woes could further accelerate the ongoing re-steepening of the yield curve and, by derivation, further fuel the re-acceleration in US and global money supply growth.
Changes in the Fed Funds Target Rate tend to be inversely correlated to the steepness of the yield curve, i.e. Fed rate cuts should lead to a further re-steepening of the yield curve.
What is more is that the European money supply growth will also most-likely accelerate as well based on their respective re-steepening of the German bond yield curve.
We therefore expect global money supply to continue to expand over the remainder of 2025 and continue to provide a macro tailwind for Bitcoin and other cryptoassets.
This has been a key investment narrative so far in 2025 and we expect this theme to be relevant throughout the remainder of the year.
On the inflation front, it is quite likely we could see a re-acceleration in US inflation towards the end of the year based on a Vector Auto Regression (VAR) model we presented here. This is based on the abovementioned re-acceleration in US money supply growth, which should also affect US consumer price inflation dynamics with a lag.
it is important to note that realized inflation continues to decelerate while survey-based future inflation expectations continue to be elevated. The risk is that these higher inflation expectations could feed through bond yields to due increases in break-even rates and CPI swap rates. That being said, high-frequency indicators for US consumer price inflation such as the one estimated by Truflation have recently started to re-accelerate as well.
This could increase pressure on the US Treasury market even more towards the end of the year. If the scenario described above actually materialised it could pose significant risk for traditional investors.
Broadly speaking, we are observing pervasive pressure on traditional multi asset portfolios like the 60/40 stock-bond portfolio due to increasing interasset correlations. One of the key reason appears to be the increasing upward pressure on bond yields which tends to affect stocks negatively as well above a certain threshold.
Meanwhile, bitcoin managed to significantly outperform a global stock-bond portfolio in 2025 so far.
A global 60/40 consisting of MSCI World (in EUR) and Bloomberg Global Aggregate bonds (EUR-hedged) has returned -2.2% this year while bitcoin has outperformed with +3.0% in EUR-terms.
It is very likely that 60/40 portfolio will come under increasing pressure towards the year end as US CPI inflation moves back into a “high-inflation regime” (>5% inflation rate) in addition to increasing worries about the sustainability of US fiscal debt (which tends to increase US Treasury swap spreads).
In such a market regime, diversification between stocks and bonds essentially vanishes as correlations become decisively positive.
Professional investors are well-advised to diversify into alternative assets like bitcoin especially on account of its increasingly inverse correlation to US Treasury bonds presented above.
Bottom Line: Heightened fiscal and sovereign‐debt risks are driving up long‐term yields and straining traditional 60/40 portfolios, even as easing policy uncertainty and accelerating global money‐supply growth create a powerful macro tailwind for Bitcoin.
With bond vigilantes pressuring both US and Japanese debt markets - and Bitcoin's inverse correlation to Treasuries at record levels - our models still point toward a potential Bitcoin value north of $200k by late 2025, making it a compelling portfolio hedge as traditional asset diversification breaks down.
On-Chain Developments
Corporate adoption remains the key demand driver in 2025. This was also one of the key themes of this year's bitcoin conference in Las Vegas that concluded last in week. The conference saw major announcements from Gamestop's first official bitcoin acquisition to Paris St Germain establishing a bitcoin treasury.
In fact, demand from publicly listed companies has been one of the key demand drivers for bitcoin this year, followed by demand emanating from global bitcoin ETPs and bitcoin DeFi applications.
Meanwhile, private companies as well as individuals have been net distributors of bitcoin in 2025. Private companies include distributions from the Mt Gox trustee as well as BitMex. So, there has generally been a re-distribution of bitcoins from private individuals and private companies to institutional investors like public corporations and funds & ETPs.
In the context of corporations, it is important to highlight that this phenomenon appears to be spreading more globally with higher dispersion among corporate buyers across different regions. The latest developments have shown that even major football clubs like Paris St Germain are embracing bitcoin as a corporate treasury asset.
A major positive development in May was the renewed re-acceleration of fund flows into global bitcoin ETPs after the significant net outflows in April, March and February. As a result, net inflows into US spot bitcoin ETFs alone have outweighed new mined supply in 2025 again.
In the context of corporate and ETP demand, it is important to note that both sources of demand remain extremely different: While corporations like Strategy (MSTR) remain largely price agnostic and “sticky”, demand emanating from bitcoin ETPs remains relatively cyclical and price-sensitive. Macro-sensitivity of these ETPs flows remains relatively high as well.
That being said, there is also a structural demand element in bitcoin ETPs.Most asset managers remain underexposed to bitcoin – rising adoption of bitcoin as a standard part of a strategic asset allocation will likely lead to continuously rising flows into global bitcoin ETPs.
In fact, a recent study conducted by UTXO and Bitwise concludes that most of the future institutional demand for bitcoin until 2026 will mostly come from wealth management platforms (not sovereigns or publicly listed companies).
In general, bitcoin's performance remains highly sensitive to changes in global ETP flows as the chart below highlights.
Bitcoin ETP flows have a significant effect on net buying volumes on bitcoin spot exchanges, which is why these flows can be considered to be the “marginal buyer”. In fact, trading volumes in spot bitcoin ETFs are increasingly accounting for a higher share in total trading volume for bitcoin underscoring this hypothesis even further.
Hence, the reversal in bitcoin ETP flows has also had a significant effect on bitcoin exchange balances, which continue declining. This supports the hypothesis that the current bull market should continue.
This expectation is also supported by quantitative models, which imply that bitcoin continues to be a “coiled spring” with increasing pressure to re-rate to the upside on account of rising scarcity.
It should be highlighted that the predictions based on this model generally dovetail the macro predictions made above – they also support the notion that bitcoin should approach $200k in the second half of 2025.
Bottom Line: Corporate adoption continues to drive Bitcoin demand in 2025 - highlighted by announcements from GameStop to Paris St Germain - while private holders have largely redistributed coins to institutional buyers, including public companies and ETPs. After several months of outflows, global Bitcoin ETPs saw renewed inflows in May, with US spot ETF demand alone exceeding new mining supply. Corporate buyers remain price‐agnostic and sticky, whereas ETP demand is more cyclical and macro‐sensitive, though long‐term institutional underexposure suggests structurally rising flows. Quantitative models and declining exchange balances support a continued bull market, with Bitcoin on track toward $200,000 in H2 2025.
Bottom Line
- Performance: May’s rally confirms Bitcoin has likely passed its bottom and remains in a bull market - briefly touching $112,000 - fuelled by reversing ETP flows, corporate bids, and renewed risk appetite. While short-term “bull fatigue” from the Vegas conference and Meta’s BTC rejection may prompt consolidation, on-chain fundamentals (persistent ETF and corporate buying) suggest any dip is a buying opportunity. Ethereum’s Pectra upgrade drove altcoin outperformance, lifting the MSCI Digital Assets Select 20 above Bitcoin, though most altcoins lagged. With bitcoin valuations near fair value and a potential US business-cycle upturn, this bull run could extend beyond a typical four-year cycle.
- Macro: Heightened fiscal and sovereign‐debt risks are driving up long‐term yields and straining traditional 60/40 portfolios, even as easing policy uncertainty and accelerating global money‐supply growth create a powerful macro tailwind for Bitcoin. With bond vigilantes pressuring both US and Japanese debt markets - and Bitcoin’s inverse correlation to Treasuries at record levels - our models still point toward a potential Bitcoin value north of $200k by late 2025, making it a compelling portfolio hedge as traditional asset diversification breaks down.
- On-Chain: Corporate adoption continues to drive Bitcoin demand in 2025 - highlighted by announcements from GameStop to Paris St Germain - while private holders have largely redistributed coins to institutional buyers, including public companies and ETPs. After several months of outflows, global Bitcoin ETPs saw renewed inflows in May, with US spot ETF demand alone exceeding new mining supply. Corporate buyers remain price‐agnostic and sticky, whereas ETP demand is more cyclical and macro‐sensitive, though long‐term institutional underexposure suggests structurally rising flows. Quantitative models and declining exchange balances support a continued bull market, with Bitcoin on track toward $200,000 in H2 2025.
Appendix
Cryptoasset Market Overview
Cryptoassets & Macroeconomy
Cryptoassets & Multiasset Portfolios
Cryptoasset Valuations
On-Chain Fundamentals
Important information:
This article does not constitute investment advice, nor does it constitute an offer or solicitation to buy financial products. This article is for general informational purposes only, and there is no explicit or implicit assurance or guarantee regarding the fairness, accuracy, completeness, or correctness of this article or the opinions contained therein. It is advised not to rely on the fairness, accuracy, completeness, or correctness of this article or the opinions contained therein. Please note that this article is neither investment advice nor an offer or solicitation to acquire financial products or cryptocurrencies.
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Potential investors should seek independent advice and consider relevant information contained in the base prospectus and the final terms for the ETPs, especially the risk factors mentioned therein. The invested capital is at risk, and losses up to the amount invested are possible. The product is subject to inherent counterparty risk with respect to the issuer of the ETPs and may incur losses up to a total loss if the issuer fails to fulfill its contractual obligations. The legal structure of ETPs is equivalent to that of a debt security. ETPs are treated like other securities.
