Bitcoin’s price reached $87,600, its highest level since April, largely due to increased global liquidity and inflation concerns. Analysts also noted the significant rise of gold prices and shifts in investor sentiment following recent U.S. economic events. Despite positive trends in Bitcoin ETF flows, caution remains over predicting a bull run, with future stability dependent on Federal Reserve communications.
Bitcoin recently surged past $87,600, marking its highest price since early April, attributed to a growing investor preference for hard assets amid inflation concerns. Analysts point out this rise is driven by increased global liquidity and a weakening U.S. dollar, as noted by Vincent Liu, CIO at Kronos Research. M2 money includes various forms of cash substitutes like savings accounts, reinforcing the trend toward Bitcoin, which has seen a 3.6% price increase in the past day with trading volumes reaching $24.5 billion.
Gold also reached a record peak, crossing $3,400 per ounce for the first time, contributing to a year-to-date increase of 29%. This growth follows President Trump’s “Liberation Day” tariffs that negatively impacted overall asset prices, leading investors to shift towards Bitcoin for its higher growth potential compared to gold, according to Ryan Yoon, lead research analyst at Tiger Research.
The market dynamics changed as the U.S. Dollar Index fell to 98.5, the lowest since February 2022, influenced by speculation regarding the future of Federal Reserve Chairman Jerome Powell. As investor sentiment shifted, evidenced by the Fear & Greed Index and the S&P 500’s relative strength index (RSI), an initial recovery in the markets started after a recent tariff exemption announcement.
It is crucial for investors to adopt strategies that match their risk tolerance during this period of heightened volatility. Despite recovery signs in Bitcoin ETFs, with a modest net inflow of $12.7 million last week, this remains the lowest weekly inflow of the year. Analysts from QCP Capital underscore the significance of monitoring correlations between Bitcoin, gold, and equities, particularly in light of the Fed’s potential dovish stance at their upcoming meeting, which could influence market stability and inflows into Bitcoin.
