Bitcoin Soars to $112,000 Amid Institutional Inflows, But Caution Flags Emerge

May 2025 saw Bitcoin reach an all-time high of $112,000, fueled by strong institutional demand and renewed interest from major companies. However, the CoinEx Research report for May 2025 also highlights potential volatility and a slowdown in stablecoin activity, suggesting a need for caution.

Bitcoin’s Bull Run: Institutional Investors Lead the Charge

The month began with Bitcoin at $94,000, peaking on May 22nd before retracing to around $104,500 due to profit-taking. A significant driver was the announcement by Trump Media & Technology Group of plans to raise $2.5 billion to establish a substantial public Bitcoin reserve. Simultaneously, Bitcoin ETFs experienced $5.2 billion in net inflows during the month, bringing cumulative inflows to $44.3 billion.

“Bitcoin’s surge to $112,000 underscores the growing acceptance of cryptocurrency as a mainstream asset,” notes a CoinEx analyst.

Bitcoin Dominance Climbs to 65%

Despite Bitcoin’s impressive performance, altcoins struggled to gain traction. Bitcoin’s dominance rose to 65%, reflecting a strong concentration of capital in BTC and limited rotation into alternative assets. Technical patterns suggest this dominance trend remains strong, with no immediate signs of reversal. Market conditions continue to favor Bitcoin, leaving many smaller tokens behind and postponing the anticipated altseason.

Ethereum’s Pectra Upgrade Enhances Scalability and Efficiency

On May 7th, Ethereum activated its Pectra upgrade at Epoch 364032, implementing significant changes to both the execution and consensus layers. This upgrade unified the Prague and Electra packages, aiming to improve scalability, security, efficiency, and user experience on the Ethereum network.

AI Agents: The Next Frontier

While the cryptocurrency market has entered a calmer phase, the artificial intelligence (AI) agent sector is gaining momentum. Innovations like Model Context Protocols (MCPs) are enabling smarter, blockchain-native applications by allowing language models to access and interpret on-chain data. Projects such as ElizaOS and Virtuals Protocol are emerging as pioneers in this space, experimenting with intelligent infrastructures for blockchain applications.

Believe Ecosystem: Consolidation After the Boom

The Believe launchpad on the Solana network attracted significant market attention on May 13th, with a surge of token launches—over 500 per day—and a trading volume that peaked at $700 million. However, the Believe launch model was subsequently questioned, leading to a decline in platform performance data. Currently, Believe is undergoing improvements and adjustments, and its future remains promising.

Stablecoin Inflows: A Warning Sign?

Despite Bitcoin’s price success, a notable warning sign has emerged: stablecoin inflows have decreased for the second consecutive month. This contrasts sharply with previous bull cycles, such as those in November, when capital inflows into stablecoins increased alongside price appreciation.

Looking Ahead to June

As the market enters June, investors will be closely watching the results of Bitcoin’s new resistance test, Ethereum’s traction following its upgrade, and developments in crypto regulation in the US—particularly regarding stablecoins. The maturation of AI protocols and the performance of altcoins will also be key factors in determining whether the momentum observed in May will continue or whether it represented only a local top.

About CoinEx

Founded in 2017, CoinEx is a global cryptocurrency exchange designed with users in mind. Since its launch by the leading mining pool, ViaBTC, the platform has been one of the first crypto exchanges to disclose Proofs of Reserves to protect 100% of user assets. CoinEx offers over 1,300 cryptocurrencies, with professional-level support for its more than 10 million users in over 200 countries and regions.