On Wednesday, Bitcoin made a historic leap forward. It blasted through its prior all time high set in January! The cryptocurrency’s price skyrocketed to $108,955.10, an astounding 2% rise from its previous historic highs. This increase has been glaringly apparent during the past three months, especially in May. Bitcoin’s market value has increased 16% for the month so far!
In fact, at one point during the trading session, Bitcoin hit a staggeringly high watermark of $109,500. Both market factors and investor sentiment have skyrocketed in lockstep. This potent combination has led to a fresh claim on the asset.
The cost has increased significantly. Over the course of their short lifespan, as of last week, cumulative inflows into exchange-traded funds (ETFs) linked to Bitcoin’s performance have climbed over $40 billion. Significantly, these ETFs have seen only a pair of outflow days in May—a testament to their increasing popularity with investors. The recent inflows amount to a whopping 15% of the entire Bitcoin supply, signaling an increased bullish sentiment towards the digital asset.
As for other public companies, they’ve increased their Bitcoin reserves since the beginning of the year by a staggering 31%! This influx has brought the overall worth to nearly $349 billion. This increasing institutional interest has furthered Bitcoin’s case as a strong long-term investment option during uncertain economic times.
Bitcoin’s latest increase has been driven largely by the stock market’s friendly liquidity. As yields have soared, risk assets became more attractive to investors. Anticipation of bullish outcomes has further pushed up the cryptocurrency, backed by strong market sentiments. Fears over tariffs and U.S. budget deficits have been major drivers of this phenomenon. Interestingly, Bitcoin’s gains have been closely correlated with increases in gold prices.
Antoni Trenchev, co-founder of Nexo, commented on Bitcoin’s recent performance, stating:
“Bitcoin’s new high has been concocted by an array of favorable ingredients in the macro cauldron, namely softer U.S. inflation numbers, a de-escalation in the U.S.-China trade war and the Moody’s downgrade of U.S. sovereign debt, which has put the spotlight on alternative stores of value like bitcoin.”
He noted the shift in market dynamics since earlier this year:
“We’ve entered an alternate universe very different from early April when global macro concerns were at their peak and bitcoin slumped to $74,000.”
On the regulatory front, President Donald Trump has promised to bring forth comprehensive crypto regulations by August. Furthermore, the Senate recently voted to advance legislation aimed at creating a regulatory framework for stablecoins, indicating a growing recognition of cryptocurrencies within official policy discussions.
Coinbase made headlines this month by joining the S&P 500 benchmark stock index, further validating the cryptocurrency sector’s place in mainstream finance.