Bitcoin is trading above $106,000, just 3% below its all-time high of $108,786 set in January. The latest rally is driven by strong investor interest in Bitcoin ETFs and growing concerns about inflation.
U.S. spot Bitcoin ETFs saw $2.8 billion in net inflows in May, pushing their total assets to over $122 billion, according to SoSoValue. The largest single-day inflow hit $674.9 million on May 2. Analysts say these steady inflows are helping Bitcoin’s price stay strong.
Economic uncertainty is also playing a role. The Federal Reserve has kept interest rates steady at 4.25% to 4.50%, while waiting for more clear signals from the economy. At the same time, inflation concerns are rising again, especially after Walmart warned it will raise prices due to tariff-related costs.
Some investors see Bitcoin as a hedge against inflation, which makes it more attractive in times like this. New trade policies between the U.S. and China have brought temporary relief, but many tariffs remain on key items like electronics and cars.
Another factor helping the rally is Coinbase’s inclusion into the S&P 500 index on May 19, which analysts say could attract even more investment into the crypto sector.
With all these developments, Bitcoin continues to attract capital as a “safe-haven” digital asset, even as some altcoins also rise. However, analysts warn that Bitcoin dominance may remain strong if market volatility increases.
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