How Bitcoin took over the markets in May — gold and stocks lose
In May 2025, cryptocurrency fund assets reached a record $167 billion, demonstrating unprecedented growth. This surge in interest in digital assets raises the question: What caused this boom? The answer lies in the combination of economic, market, and political factors that prompted investors to turn to Bitcoin and other cryptocurrencies as a means of protecting and diversifying their capital.
According to Reuters, crypto funds received more than $7 billion in just one month, marking the highest level of inflows since December of last year. This rapid growth is a response to the instability of traditional markets and the decline in confidence in traditional investment instruments. Investors are focusing on bitcoin, viewing it not only as a risky asset, but also as a means of preserving value.
Bitcoin and Ether in the lead: the numbers speak for themselves
Bitcoin received the largest amount of new investments, at $5.5 billion. For comparison, ether attracted a much smaller amount: $890 million. However, this is still significant against the backdrop of the overall trend.
Over the past three months, the Bitcoin rate jumped by more than 15%, outperforming gold (+13.3%) and the MSCI World Global Stock Index (+3.6%).
Investors view cryptocurrency as an alternative that is not dependent on geopolitics, dollar fluctuations, or central bank decisions.
"The greenback is projected to keep plummeting, bond yields are rising, there’s uncertainty about the equity markets. But bitcoin seems to be holding strong," explained Nic Puckri, analyst and founder of Coin Bureau.
Gold and stocks are in the red: where is the capital fleeing?
While money has been flowing into crypto funds, traditional assets have suffered losses. According to CoinShares, $5.9 billion was withdrawn from stock markets alone in May, and another $678 million was withdrawn from gold.
This indicates a reevaluation of risks. Some major players have begun gradually shifting away from old strategies to build new portfolios that include digital assets.
Cryptocurrencies have become more than just a 'speculative trend'; they are a hedging tool that is seriously competing with the traditional 'gold standard' — in the literal sense of the word.
Why it happened now
Analysts name several reasons for this rapid growth of cryptocurrencies.
- The easing of trade tensions, especially between the US and China. This reduced risks and allowed capital to move into new assets.
- Loss of confidence in traditional financial markets amid rising debt burdens in the US.
- Expectations of new regulatory easing for the crypto market.
- Global portfolio diversification — funds are actively looking for 'anti-crisis' solutions.
Another important factor is the active involvement of institutional investors, who, according to Lin, are no longer afraid of the word 'crypto' because they see it as a real financial instrument.
What comes next: the market is at a crossroads
This record could be just the beginning of a longer-term trend. Assuming the current level of institutional support for cryptocurrencies continues and US regulatory policy remains moderate, the crypto market could see a repeat of the 2021 scenario — but at an even higher level.
However, volatility is still a factor. According to analysts, striking a balance between the growth of crypto funds' profitability and potential regulatory restrictions remains the key challenge.
"It all depends on whether the crypto market can keep up the pace without losing confidence," summarizes Pakri.
Previously, on Monday, May 19, 2025, Bitcoin experienced a significant breakthrough, reaching a price of $106,000 to $107,000 per coin. Although it failed to reach an all-time high, the price of bitcoin surpassed the cost of a kilogram of gold for the first time this year, which is approximately $103,500.
As reported, Bitcoin and gold have recently been competing for the title of reliable inflation hedge. Both showed growth at the end of 2024, but JPMorgan predicts bitcoin will significantly outperform gold in 2025. Analysts expect Bitcoin to perform even better by the end of the year, further solidifying its market position.