Bitcoin surged to a new all-time high after a temporary trade agreement between the United States and China eased macroeconomic fears and boosted investor confidence.
Bitcoin (BTC) set a new high of $109,400 on May 21, rising more than 26% in the past month, according to data from TradingView. This climb to a record high came nine days after the White House announced a 90-day trade agreement between the US and China on May 12, temporarily slashing import tariffs to 10%.
The 90-day tariff suspension and the cooperative tone in negotiations removed the risk of โsudden re-escalation,โ which had a significant impact on risk appetite among traditional and cryptocurrency investors, Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen, told Cointelegraph.
US President Donald Trumpโs reciprocal tariffs were seen as the biggest macroeconomic threat to traditional equities and cryptocurrency markets in 2025.
Bitcoin briefly fell to a year-to-date low of $74,434 on April 7, five days after Trump announced his reciprocal import tariffs on April 2, sending shockwaves across global markets, with the S&P 500 losing more than $5 trillion in value, its largest drop to date.
Bitcoin started its recovery on April 9 after Trumpโs Liberation Day marked the โclimax of uncertaintyโ for market participants, Michaรซl van de Poppe, founder of MN Consultancy, told Cointelegraph at the time.
Related: Bitcoin more of a โdiversifierโ than safe-haven asset: Report
Bitcoin entered May with โnear-flawless setupโ
Bitcoin kicked off May with a โnear-flawless setup, catalyzed by a rare alignment of geopolitical de-escalation, improving regulatory optics and macroeconomic tailwinds,โ according to Jag Kooner, head of derivatives at Bitfinex exchange.
โThe RussiaโUkraine ceasefire talks have defused one of the primary geopolitical volatility engines of the past two years,โ Kooner told Cointelegraph, adding:
โRather than triggering capital flight from Bitcoin โ as often seen when risk wanes โ this easing is unlocking a risk-on rotation. Weโre seeing capital rotate into BTC and high-beta tech as the need for geopolitical hedging fades, but liquidity remains abundant.โ
The capital rotation reflects a โmaturing narrativeโ as โBitcoin is no longer just a fear hedge โ itโs increasingly a high-conviction risk asset in periods of macro stability,โ Kooner said.
Russia and Ukraine โwill immediately start negotiations towards a Ceasefire and, more importantly, an END to the War,โ Trump said in a May 19 X post, summarizing his two-hour call with Russian President Vladimir Putin.
Related: Ukraine strategic Bitcoin reserve bill reportedly in final stages
Still, funding rates need to remain neutral and open interest stable for a โconsecutive setupโ that may ignite a Bitcoin rally to above $114,000 to $120,000, which may be catalyzed by any โmacro or regulatory spark,โ Kooner said.
Other analysts have predicted a Bitcoin rally to above $130,000 before the end of 2025, based on BTCโs close correlation with the global money supply.
The increasing money supply may push Bitcoinโs price above $132,000 before the end of the year, as investor demand is driven by the growing fiat money debasement, predicted Jamie Coutts, chief crypto analyst at Real Vision.
Magazine: Arthur Hayes $1M Bitcoin tip, altcoins โpowerful rallyโ looms: Hodlerโs Digest, May 11 โ 17
