Bitcoin has achieved a significant milestone. On Wednesday, it soared to a new all-time high, surpassing its previous record set in January.
According to Coin Metrics, the flagship cryptocurrency’s price was 2% higher at $108,955.10. Earlier, it rose as high as $109,500.
Bitcoin’s remarkable surge to a new high can be attributed to a combination of positive factors in the macroeconomic landscape. These include softer U.S. inflation figures, a de-escalation in the U.S.-China trade war, and the Moody’s downgrade of U.S. sovereign debt, which has drawn attention to alternative stores of value like bitcoin. Antoni Trenchev, cofounder of crypto exchange Nexo, aptly described this as a ‘concoction of favourable ingredients’.
“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,” he added. “It’s possible a three-month window has opened for risk assets to thrive as a broader agreement between the U.S. and China is thrashed out.”
Bitcoin’s price steadily climbed in May, up 16%. Cumulative inflows into ETFs tracking the bitcoin price surpassed $40 billion last week and have seen just two days of outflows in May.
On-chain data also shows lower selling pressure as indicated by bitcoin inflows into exchanges and increased liquidity in the crypto market as measured by new records of the amount of Tether stablecoin USDT
, a gauge of crypto market liquidity, sitting on exchanges, according to CryptoQuant.
Investors are optimistic about Bitcoin’s future, anticipating that upcoming catalysts such as regulatory updates and corporate treasury investments will continue to drive its price higher. Steven Lubka, head of private clients and family offices at Swan Bitcoin, shares this sentiment. The growth in the number of bitcoins held by public companies, which has increased by 31% to about $349 billion since the start of the year, is a testament to this optimism. This now represents 15% of the total bitcoin supply.
Earlier this week, the Senate voted to advance legislation that would create the first regulatory framework in the U.S. for stablecoins, a key sector of the crypto market. President Donald Trump has said he wants to see crypto regulation on his desk and ready to sign by August before Congress recesses.
Also, this month, Coinbase joined the S&P 500 benchmark stock index, which Wall Street has praised as a watershed moment for the crypto industry.