Is Bitcoin set for more gains after hitting new all-time highs?

May has been a big month for Bitcoin.

In the past month, the world's largest cryptocurrency has surged more than 20% since its "Liberation Day" lows and broken fresh records of US$112,000.

The coin's performance has far outstripped the performance of the S&P 500 and Nasdaq over the same period (as the chart below shows) and the meteoric rise has seen its market capitalisation exceed US$2 trillion.

A key support for Bitcoin has been the accelerating de-dollarisation trend.

In April, Bitcoin appeared to benefit from capital rotation associated with "sell-America" positioning and growing scepticism around US monetary dominance.

While still in early stages, this narrative is gaining traction among investors seeking more neutral assets in an increasingly fragmented global system. Bitcoin's finite supply, global accessibility, and resistance to centralised control make it uniquely suited to ride this wave of monetary realignment.

Another key driver of Bitcoin has been the US's political re-engagement with the crypto industry. This narrative has taken many forms. On the legislative side, a marquee stablecoin bill recently advanced to the US Senate after weeks of opposition.

While the legislation is yet to be passed, it sets the stage for a new level of crypto adoption in the US and will be a massive step in policy clarity for the industry if approved.

Another display is Donald Trump's recent Trumpcoin-holder's dinner held on May 22. While the gala offered little in the way of announcements, the Trump family's embrace of cryptocurrencies shows that the industry is top-of-mind for the new administration and has continued to inspire bullish sentiment among speculators.

In addition, President Trump's more conciliatory tone on trade tariffs this month, marked by the reopening of trade talks with China, has helped to boost investor confidence. For something as sentiment driven as Bitcoin, that kind of backdrop is usually enough to spark a rally.

These bullish catalysts are being reflected in capital flows. Australian Bitcoin ETFs have attracted roughly $134 million in inflows so far this year, double the amount recorded over the same period last year. In the past month, local Bitcoin ETFs have seen $65 million in new flows, up sharply from just $6.9 million in March 2025.

So, should investors be rushing to buy Bitcoin? As always with cryptocurrencies or any growth assets, there are still meaningful risks to consider.

Regulatory inconsistency remains a major challenge, with policy frameworks fragmented across jurisdictions and subject to sudden change. Political reversals are also a persistent risk, particularly as digital assets re-enter the spotlight.

On the market side, Bitcoin's correlation with risk assets - especially technology and growth stocks - means it remains sensitive to shifts in investor sentiment.

In a low-growth, high-volatility environment, or if central banks turn more hawkish in response to tariff-driven inflation, Bitcoin could come under renewed pressure. Still, Bitcoin's role as the cornerstone of the digital financial ecosystem positions it as a unique asset, well-placed to navigate these challenges

Given the strength of the above catalysts, we do think the potential for Bitcoin to achieve a higher price has become more evident. In terms of price targets, we believe Bitcoin could reach somewhere between US$150,000 to US$200,000 by the year's end - assuming all key catalysts align, that is, positive political engagement, institutional rotation, and a favourable macroeconomic environment.

Ultimately, while investing in cryptocurrencies will always carry a degree of intrinsic risk, we believe Bitcoin presents a diversification opportunity - particularly for Australian investors not yet exposed to the asset class.

For those unfamiliar with the complexities of crypto exchanges and decentralised finance, Bitcoin ETFs offer a straightforward, regulated entry point.

These products remove the technical barriers associated with managing digital wallets and private keys, as custody and security are handled by professional fund managers.

Investors can access Bitcoin exposure through the same online brokerage platforms they use for equities and traditional ETFs, making it easy to integrate digital assets into your portfolio.

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