Bitcoin Inches Closer to All-Time High: What’s Driving its Price?
Bitcoin is trading at its highest level in recent weeks, surpassing $106,000 on Monday, just shy of its January all-time high of $108,786. According to data from CoinGecko, the cryptocurrency is currently trading above $106,500.
This recent surge in price is attributed to renewed interest in exchange-traded funds (ETFs) and shifting economic signals that are drawing investor capital back into risk assets. As reported by Decrypt, a leading source of cryptocurrency news and analysis, the crypto climbed above $105,700 on Sunday evening, extending gains made over the past two weeks.
The current rally is notable for its divergence from previous surges, which were often powered by retail speculation. Instead, this one is unfolding amid heavy flows into spot Bitcoin ETFs, stable interest rate expectations, and renewed debate around inflation as tariffs on key imports come back into focus. As QCP Capital, a Singapore-based firm, wrote in a note last week, "Looking ahead, we believe there is further room for digital assets to rally, especially as Coinbase’s inclusion into the S&P 500 on 19 May draws closer."
The inclusion of Coinbase in the S&P 500 is seen as a significant development, with QCP Capital adding that "history tells us that index inclusion tends to act as a short-term catalyst, as passive managers adjust their allocations to track the benchmark more closely." This sentiment is echoed by Decrypt, which reports that U.S. spot Bitcoin ETFs pulled in more than $2.8 billion in net inflows over the first half of May, according to data from SoSoValue.
The largest single-day gain came on May 2, when flows reached $674.9 million. Cumulative inflows stood at $41.77 billion as of May 16, with total net assets surpassing $122 billion. This influx of capital into Bitcoin ETFs is a clear indication of growing investor interest in the cryptocurrency.
The macroeconomic backdrop has also contributed to the rally. The Federal Reserve has kept its benchmark interest rate unchanged at 4.25% to 4.50%, maintaining a cautious stance amid mixed economic signals. As Chair Jerome Powell noted last week, the central bank remains prepared to respond to evolving data, but offered no indication of an imminent shift in policy.
Inflation concerns have resurfaced, particularly as new trade policies begin to ripple through supply chains—a dynamic that could reinforce Bitcoin’s appeal as an inflation hedge if price pressures persist. A temporary 90-day tariff reduction deal between the U.S. and China has offered some relief, but elevated duties remain on sectors including electric vehicles, semiconductors, and consumer electronics.
Walmart, the nation’s largest retailer, has warned that it plans to raise prices this month and into early summer as tariff-affected merchandise begins reaching its shelves. As Walmart Chief Financial Officer John David Rainey told the Wall Street Journal, "The magnitude and speed at which these prices are coming to us is somewhat unprecedented in history."
The company did not issue a profit forecast for the current quarter, citing uncertainty over how much of the cost it may absorb to stay competitive. This development adds to broader concerns that trade-related price increases could complicate the inflation outlook, prompting investors to reassess how sustained price pressures may shape monetary policy and risk sentiment across asset classes, including crypto.
As Decrypt reports, the current rally in Bitcoin is driven by a combination of factors, including heavy flows into spot Bitcoin ETFs, stable interest rate expectations, and renewed debate around inflation. With the cryptocurrency trading at its highest level in recent weeks, it remains to be seen whether it will continue to inch closer to its all-time high.
In conclusion, the recent surge in Bitcoin’s price is a significant development that reflects growing investor interest in the cryptocurrency. As reported by Decrypt, a leading source of cryptocurrency news and analysis, the current rally is driven by a combination of factors, including heavy flows into spot Bitcoin ETFs, stable interest rate expectations, and renewed debate around inflation. With the macroeconomic backdrop continuing to evolve, it will be interesting to see how Bitcoin’s price responds in the coming weeks and months.
Sources:
Decrypt: https://decrypt.co/320772/bitcoin-inches-closer-to-all-time-high-heres-whats-driving-its-price
SoSoValue:
Wall Street Journal: https://www.wsj.com/
