Bitcoin Dips After Hitting Record High Amid Rising Treasury Yields and Market Jitters

Bitcoin hit a fresh all-time high on Wednesday, peaking at $109,500, before retreating slightly as surging U.S. Treasury yields rattled risk markets. At last check, the cryptocurrency was trading nearly flat at $106,678.74, according to Coin Metrics.

Despite the pullback, Bitcoin’s latest surge represents a continuation of a strong upward trend. The cryptocurrency has gained roughly 13% in May alone, fueled by a favorable mix of macroeconomic conditions. Softer U.S. inflation data, a cooling of tensions between the U.S. and China, and the recent downgrade of U.S. sovereign credit by Moody’s have collectively renewed interest in alternative assets like Bitcoin.

“Bitcoin’s rally has been driven by a combination of easing inflation, geopolitical de-escalation, and growing concerns about traditional financial systems,” said Antoni Trenchev, co-founder of crypto platform Nexo. “These factors are creating a perfect storm that’s boosting demand for alternative stores of value.”

Trenchev noted how dramatically the market narrative has shifted in just a few weeks. “Just last month, Bitcoin was languishing around $74,000 as investors worried about global macro risks. Now, we’re in a different world where optimism is back, and risk assets are enjoying a window of opportunity.”

Institutional interest in Bitcoin has also been accelerating. Investment into Bitcoin-related ETFs has surged, with cumulative inflows exceeding $40 billion this month. May has seen just two days of ETF outflows, a sign of strong investor confidence.

The market is also showing healthier fundamentals. On-chain data from CryptoQuant points to lower selling pressure, with reduced Bitcoin inflows to exchanges. Additionally, liquidity in the crypto space has improved, reflected by a rise in the amount of Tether (USDT) on trading platforms a key indicator of buying power.

Public companies are also deepening their crypto exposure. Since January, the amount of Bitcoin held by publicly traded firms has increased by 31%, reaching a value of $349 billion roughly 15% of Bitcoin’s total circulating supply, according to Bitcoin Treasuries.

Regulatory developments are also catching investor attention. Earlier this week, the U.S. Senate advanced legislation that would create a foundational regulatory framework for stablecoins, a significant sector within crypto. President Trump has expressed his intention to fast-track crypto regulations, aiming to sign legislation into law by August.

Meanwhile, crypto industry milestones continue to validate the sector. Coinbase’s recent inclusion in the S&P 500 is being hailed as a major achievement, symbolizing the growing mainstream acceptance of digital assets.

All in all, while Bitcoin has pulled back slightly from its peak, the broader narrative remains bullish. From macroeconomic tailwinds to institutional adoption and regulatory clarity, the crypto market seems poised for continued growth though volatility, as always, remains part of the ride.