Bitcoin Inches Closer to All-Time High—Here’s What’s Driving Its Price

Bitcoin is buying and selling simply shy of report ranges, rising alongside renewed curiosity in exchange-traded funds and shifting financial alerts which can be drawing investor capital again into danger property.

The crypto climbed above $105,700 on Sunday night, extending positive factors revamped the previous two weeks. The asset is buying and selling simply above $106,500, CoinGecko knowledge exhibits. 

Whereas earlier rallies had been typically powered by retail hypothesis, this one is unfolding amid heavy flows into spot Bitcoin ETFs, steady rate of interest expectations, and renewed debate round inflation as tariffs on key imports come again into focus.

“Trying forward, we imagine there’s additional room for digital property to rally, particularly as Coinbase’s inclusion into the S&P 500 on 19 Might attracts nearer,” Singapore-based QCP Capital wrote in a notice final week.

“Historical past tells us that index inclusion tends to behave as a short-term catalyst, as passive managers modify their allocations to trace the benchmark extra carefully,” it added.

U.S. spot Bitcoin ETFs pulled in additional than $2.8 billion in web inflows over the primary half of Might, based on knowledge from SoSoValue. 

The biggest single-day achieve got here on Might 2, when flows reached $674.9 million. Cumulative inflows stood at $41.77 billion as of Might 16, with whole web property surpassing $122 billion.

The macro backdrop has additionally contributed to the rally. 

The Federal Reserve has stored its benchmark rate of interest unchanged at 4.25% to 4.50%, sustaining a cautious stance amid blended financial alerts. 

Final week, Chair Jerome Powell mentioned the central financial institution stays ready to reply to evolving knowledge, however supplied no indication of an imminent shift in coverage. 

That’s partly as a result of inflation stays a priority, notably as new commerce insurance policies start to ripple via provide chains—a dynamic that might reinforce Bitcoin’s enchantment as an inflation hedge if value pressures persist.

A brief 90-day tariff discount deal between the U.S. and China has supplied some reduction, however elevated duties stay on sectors together with electrical autos, semiconductors, and client electronics. 

Walmart, the nation’s largest retailer, mentioned final week it plans to increase costs this month and into early summer season as tariff-affected merchandise begins reaching its cabinets.

“The magnitude and pace at which these costs are coming to us is considerably unprecedented in historical past,” Walmart Chief Monetary Officer John David Rainey informed the Wall Road Journal. 

The corporate didn’t situation a revenue forecast for the present quarter, citing uncertainty over how a lot of the price it could soak up to remain aggressive.

Walmart provides to broader issues that trade-related value will increase might complicate the inflation outlook, prompting traders to reassess how sustained value pressures might form financial coverage and danger sentiment throughout asset courses, together with crypto.