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HTX DeepHink is dedicated to investigating global macro trends, key economic indicators and key developments across the crypto industry in a flagship market insights column created by HTX. In a world where volatility is the norm, HTX DeepThink aims to help readers “find the order of confusion.”
Last week, HTX Research’s Chloe (@chloetalk1) accurately predicted that a liquidity window could emerge in early May, bringing capital back to the crypto market. On May 8th, Bitcoin surged beyond $100,000 for the first time in three months. How long can this momentum last and what does the latest US-UK customs transaction mean? With this bonus update, Chloe offers a fresh analysis of the evolving landscape.
UK – US Customs Contract Signals reduced risk and policy support
On May 8, the UK and the US reached a groundbreaking trade agreement. The UK has agreed to open an agricultural market for US products in exchange for reducing US tariffs on UK automobile exports. Tariffs on UK steel and aluminum exports to the US have dropped to zero, but US imports are under 10% “mutual tariffs.”
The UK already has a trade deficit with the US, and while the economic impact of the transaction may be modest, it shows the US government’s willingness to re-engage diplomatically and release policy.
U.S. Secretary of Commerce Lutonic further indicated that the next major trade agreement could be involved in a large Asian economy, suggesting that the US administration is preparing to provide structural trade incentives on a broader geopolitical scale.
Bitcoin’s market structure shifts from speculative trading to institutional capital allocation
At the same time as these easing policy conditions, Bitcoin’s capital flow dynamics are undergoing fundamental changes. Over the past three weeks, the US Spot Bitcoin ETF has recorded a significant net inflow of $5.3 billion in total.
In particular, this increase has been driven by institutional participants, including the Sovereign Wealth Fund in Abu Dhabi, the Swiss National Bank (via micro-Strategy Equity Purchases) and increased allocations through BlackRock’s Bitcoin ETFs. This illustrates the structural transition of Bitcoin’s pricing logic. This moves from a move from a short-term volatility-driven guess to a long-term capital allocation. BTC has evolved beyond risky assets. It gradually forms an independent capital ecosystem, which institutional investors see as a “soupline asset” somewhere between gold and the US Treasury.
Bitcoin volatility remains. The market is waiting for a macroeconomic catalyst
Despite BTC’s recent rally to $100,000, the market has yet to show signs of speculative vibrancy. The implicit volatility (IV) of Bitcoin options remains stable in the 50%-55% range, far below the 80%+ extreme level that is usually seen at past bull market peaks. Open interest on CME Bitcoin futures is currently at $14.8 billion, well below the $20 billion peak observed during the 2020 US presidential election, indicating that leverage is still manageable. Meanwhile, the 10-year U.S. Treasury yield has not been repeatedly exceeded 4.60%, and now accounts for around 4.40%, which remains in the supply zone from neutral to risk assets.
Overall, as long as yields rise above 4.8% and ETF inflows remain stable, Bitcoin could consolidate in the $105,000-115,000 range while waiting for the next breakout trigger.
Hidden risks: China’s breakdown – US and EU – US trade talks could rekindle the tariff fight
Nevertheless, investors should remain vigilant about geopolitical risks. While US negotiations between China and the EU are ongoing, significant unresolved tensions continue, particularly beyond tariffs, export controls and industrial subsidies.
President Trump has explicitly stated that he would not intend to lower the current 145% tariffs on Chinese goods as a prerequisite for resuming trade negotiations. Meanwhile, EU trade commissioner Malossyv Chovichchu warned that if the discussion with the US fails, the EU is ready to fire retaliation fees and could target American goods up to 100 billion euros.
The breakdown of these negotiations could lead to a positive tariff rechallenge and curb global trade frictions. This could weaken investors’ sentiment and put new pressure on risky assets, including Bitcoin. Therefore, the hidden risks of the updated tariff war remain important macro variables to incorporate into all future-looking risk assessments.
*The above content is not investment advice and does not constitute an offer or solicitation to provide or recommend an investment product.
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HTX Research is the dedicated research unit of the HTX Group and provides expert evaluations across a wide range of topics including conducting in-depth analysis, creating comprehensive reports, cryptocurrency, blockchain technology, and emerging market trends.
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