Bitcoin, the premier cryptocurrency, approached yet another all-time record on Monday as it briefly surpassed the $106,000 mark during the early trading hours in Asia. By midnight UTC on May 18, Bitcoin concluded its strongest weekly performance to date, settling just below $106,500 according to Coingecko data.
This marks the sixth consecutive week that Bitcoin has achieved weekly gains, highlighting the dominance of bullish sentiment in the market.
The previous record for Bitcoin’s weekly gain was established in December when the cryptocurrency exceeded the $104,400 threshold. It later reached its all-time peak of $108,786 on January 20.
Source: TradingView
Driving Forces Behind Bitcoin’s Surge: ETFs and Economic Trends
As of the latest update, Bitcoin is priced at $103,500, reflecting a 10% increase over the past week and a substantial 21% rise over the last 30 days. Unlike the previous rally, which was fueled by enthusiasm surrounding Donald Trump’s inauguration and retail speculation, the current surge appears to be significantly influenced by steady inflows into spot Bitcoin exchange-traded funds (ETFs) and various macroeconomic factors. Investors may be gravitating towards safer assets like Bitcoin and gold amidst uncertainties regarding inflation, trade agreements, and broader economic conditions.
From May 12 to May 16 (ET), Bitcoin ETFs experienced a remarkable total net inflow of $604 million, maintaining a trend of positive weekly inflows for five consecutive weeks. In the first half of May alone, U.S. spot Bitcoin ETFs accumulated over $2.8 billion in net inflows, as reported by SoSoValue.
Source: SoSoValue
US Credit Rating Downgrade Prompts Reconsideration of Safe Investments
On Friday, Moody’s, the credit rating agency, downgraded the United States government’s credit rating from its top tier of AAA to AA1, citing mounting government debt and a growing budget deficit. This move, combined with persistent inflation concerns and Federal Reserve Chairman Jerome Powell’s stance against interest rate cuts, has led investors to consider Bitcoin as an attractive safe haven. Thus far, Bitcoin has responded favorably to the recent downgrade of U.S. credit ratings.
Meanwhile, Japan’s 40-year bond yield has reached its highest levels in more than twenty years, prompting Prime Minister Ishiba to characterize the economic situation as “worse than Greece.” With growing global uncertainty and fears of recession, Bitcoin has reemerged as a leading option for investors seeking refuge worldwide.
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