Bitcoin hits new all-time high of $109K as trade war tensions ease

Bitcoin reached a new all-time high of $109,400 on May 21st, 2025, fueled by a temporary US-China trade agreement and improved investor sentiment. This marked a 26% increase over the past month, following a period of market volatility.

The agreement, announced on May 12th, temporarily reduced import tariffs to 10% for 90 days. This eased concerns about a sudden escalation of trade tensions, significantly impacting risk appetite among both traditional and cryptocurrency investors. Prior to this, President Trump’s reciprocal tariffs had been identified as a major macroeconomic threat, causing a sharp drop in the S&P 500 and a temporary dip in Bitcoin’s price to a year-to-date low of $74,434 on April 7th.

Bitcoin’s recovery began on April 9th, coinciding with a perceived reduction in market uncertainty. Analysts noted a “near-flawless setup” in May, driven by geopolitical de-escalation, improving regulatory outlook, and positive macroeconomic trends. The Russia-Ukraine ceasefire talks, announced by President Trump on May 19th, further contributed to this positive sentiment. This de-escalation shifted investor focus from hedging towards risk-on assets, resulting in capital flowing into Bitcoin and high-beta tech stocks.

This shift reflects Bitcoin’s evolving perception from purely a safe haven asset to a high-conviction risk asset during periods of macroeconomic stability. While positive indicators point towards further growth, analysts caution that neutral funding rates and stable open interest are crucial for sustained momentum. Further rallies to $114,000-$120,000 or even higher, potentially exceeding $130,000 by year-end, are predicted by some, based on Bitcoin’s correlation with the global money supply and increasing fiat money debasement. These predictions suggest a continuation of the positive trend, conditioned on continued macroeconomic stability and positive regulatory developments.