Bitcoin’s latest surge to $99,000 has reignited optimism among investors and analysts, with growing speculation that the leading cryptocurrency could hit $200,000 before the end of 2025. This bullish sentiment is primarily fueled by expectations of upcoming interest rate cuts by the Federal Reserve and positive momentum surrounding U.S.-China trade talks, both of which are seen as favorable macroeconomic catalysts.

Fed Rate Decision Provides Temporary Boost

On May 8, 2025, the Federal Reserve introduced that it would maintain its benchmark interest rate range at 4.25% to 4.5%. While the central bank acknowledged that inflation remains somewhat elevated, it also noted the strength of the labor market. This neutral stance was enough to send Bitcoin higher, briefly touching $99,000 in the early hours of Asian trading. This marked a 32% rebound from its April low of around $74,500.

Market watchers are now turning their attention to the Fed’s next steps. Many expect that if inflation shows signs of cooling in the coming months, the Fed could initiate a rate-cutting cycle by Q3 2025. Lower interest rates typically lead to increased appetite for risk assets, including Bitcoin, as investors seek higher returns outside of traditional fixed-income markets.

Experts Forecast Bullish Year-End for Bitcoin

According to Matt Mena, a research strategist at crypto asset management firm 21Shares, Bitcoin is primed for a significant breakout. Mena believes that a clean move above $100,000 could pave the way for a retest of the all-time high at $108,500. If adoption trends continue on both institutional and nation-state levels, he projects that Bitcoin could surpass $200,000 by the end of the year.

Mena also pointed to rising interest in Bitcoin as an alternative to gold. Notably, BlackRock’s Bitcoin ETF, IBIT, has already surpassed the top gold ETF in terms of year-to-date inflows. This shift reflects a broader change in investor sentiment, where digital assets are increasingly being viewed as viable hedges against inflation and macroeconomic instability.

U.S.-China Trade Talks Add to Momentum

Another key macro factor influencing Bitcoin’s price is the upcoming high-level trade discussions between the United States and China. Scheduled to take place in Switzerland from May 9 to 12, the talks aim to resolve escalating tariff disputes that have weighed on global markets. If successful, the outcome could provide further relief to financial markets and add to the ongoing Bitcoin rally.

Although prediction market Polymarket currently estimates less than a 30% chance of a trade deal being finalized by June, even the possibility of progress has been enough to buoy sentiment. The return of diplomatic engagement between the two economic superpowers is seen as a step toward broader market stability.

Market Data Shows Strong Underlying Demand

In terms of on-chain activity, data indicates that U.S. investors have played a significant role in Bitcoin’s recovery. The Coinbase Premium Index has remained positive for two consecutive weeks, signaling heightened demand from American buyers. Additionally, U.S.-listed spot Bitcoin ETFs saw $2 billion in inflows last week alone, pushing the year-to-date total to over $5 billion.

Looking at derivatives, traders are increasingly betting on further upside. On Deribit, call options for a Bitcoin price of $110,000 have a 28% chance of being hit by June. Meanwhile, liquidity maps show that the $106,000 level is a key target, with $93,000 and $83,000 acting as potential support zones in the event of a pullback.

Conclusion

While risks remain and short-term volatility is likely, the broader narrative for Bitcoin appears increasingly bullish. With macroeconomic indicators leaning in its favor and investor confidence building, Bitcoin could be well on its way to reaching the long-anticipated $200,000 milestone before 2025 ends.