Cryptocurrency prices rose this week, while major U.S. stock indices and the U.S. dollar dropped. Bitcoin hit a new high of $111,900, and altcoins reached a total market cap of $1.29 trillion, the highest since February.
At the same time, the Dow Jones Index fell by 3.45%, dropping to $41,340. The S&P 500 and Russell 2000 also declined. The U.S. Dollar Index dropped to 99.10, entering a technical correction.
Why did crypto go up?
Bitcoin gained as investors saw it as a safe-haven asset. A recent white paper by BlackRock, the world’s largest asset manager, said Bitcoin and gold are becoming hedges against rising U.S. debt.
Ratings agency Moody’s downgraded the U.S. credit rating, joining S&P and Fitch in warning about the growing debt. This raised fears about the strength of the U.S. economy and led many to move money into crypto.
The U.S. House also passed a new bill backed by Donald Trump. The bill cuts over $4 trillion in taxes, which may increase the national debt to nearly $37 trillion in the next ten years.
Stocks fell even more after Trump said the U.S. will impose 50% tariffs on European goods starting June 1. The EU plans to strike back, which could hurt over $1.7 trillion in trade.
What does this mean for Bitcoin?
Experts say Bitcoin remains strong because institutional demand is rising, while supply is shrinking. Many see it as “digital gold,” a long-term store of value when other markets are unstable.
