On Wednesday, Bitcoin achieved a new pinnacle, surpassing its previous record set in January.
Data from Coin Metrics indicated the leading cryptocurrency was trading at $108,955.10, marking a 2% increase. Earlier in the day, it had reached a high of $109,857.
The cryptocurrency experienced a brief dip, momentarily relinquishing gains as Treasury yields surged, leading to declines in the stock market.
According to Antoni Trenchev, co-founder of Nexo, a crypto exchange, “Bitcoin’s latest peak is the result of several favorable macroeconomic factors. These include lower U.S. inflation figures, reduced tension in the U.S.-China trade relations, and Moody’s downgrade of U.S. debt, all of which have increased interest in alternative stores of value like Bitcoin.”
Bitcoin reached a historic high on Wednesday
He elaborated, “The current situation is vastly different from early April, when global economic worries were at their highest, pushing Bitcoin down to $74,000. A window of opportunity for risk assets may have opened, coinciding with ongoing negotiations for a broader trade agreement between the U.S. and China.”
Following a period of stagnation due to tariff uncertainties, Bitcoin has been consistently rising in May, gaining 15% over the month. Data from SoSoValue reveals that cumulative investments in exchange-traded funds that mirror Bitcoin’s price have exceeded $40 billion in the past week, with only two days showing outflows in May. Bitcoin has capitalized on increased liquidity in the stock market, which has boosted risk assets, alongside risk-averse scenarios concerning tariffs and U.S. deficits, driving gains in both gold and Bitcoin.
According to CryptoQuant, on-chain data suggests reduced selling pressure, shown by Bitcoin inflows into exchanges and greater crypto market liquidity, marked by record-high levels of Tether stablecoin USDT held on exchanges, which serves as an indicator of crypto market liquidity.
Investors are anticipating factors such as regulatory developments and corporate treasury investments to further increase Bitcoin’s value. Bitcoin Treasuries reports that the amount of Bitcoin held by public companies has increased by 31% since the start of the year, reaching approximately $349 billion, which is 15% of Bitcoin’s total supply.
Earlier this week, the Senate approved the advancement of legislation aimed at creating the first regulatory framework for stablecoins in the U.S., a vital part of the cryptocurrency market. President Donald Trump has indicated his desire to sign cryptocurrency regulations into law by August before Congress’s recess.
Additionally, this month, Coinbase was added to the S&P 500, an event that proponents have heralded as a pivotal moment for the cryptocurrency industry.