Bitcoin rose to its highest level on record on Thursday, eclipsing the all-time high it recorded in the previous session, as risk sentiment continued to improve after last month’s tariff-induced selloff.
The world’s largest cryptocurrency touched a high of $$111,880 earlier in the session, and was last up 1.49 percent at $111,321.
U.S. Treasury’s bond auction sees weak demand
Bitcoin’s surge followed weak demand in the U.S. Treasury’s 20-year bond auction, shifting investor interest toward alternative assets. The 20-year bond offering saw weak demand, with buyers pushing for lower prices, which drove yields above the 5.1 percent threshold, marking the second time a 20-year Treasury sale has triggered such a spike.
The pressure also extended to the 10- and 30-year Treasury yields, which climbed to 4.58 percent and 5.08 percent, respectively, further fueled by Moody’s recent downgrade of the U.S. credit rating.
Bitcoin took center stage on Wednesday, surging to a new all-time high of $109,800 and sparking positive sentiment across the crypto market. The asset climbed above $111,800 on Thursday, securing a second record high within 24 hours, with a gain of almost 8 percent so far this week.
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Investors seek alternative assets on U.S. sovereign debt downgrade
This surge was also driven by easing trade tension between the United States and China and Moody’s downgrade of U.S. sovereign debt, which prompted investors to seek alternative investment sources to the dollar.
Bitcoin often trades like tech stocks and other assets that rise in value when investor sentiment is high. The tech-heavy Nasdaq is up 30 percent from its early April low. This surge also coincides with continued weakness in the dollar, further boosting Bitcoin’s exchange rate against the U.S. currency.
Market participants also associate the surge in Bitcoin’s price with the increased involvement from traditional financial firms. This week, investors have cited JPMorgan CEO Jamie Dimon, who said the bank will let clients buy bitcoin. Earlier this month, crypto exchange Coinbase was also added to the S&P 500 index.
Ether, the second-largest cryptocurrency, also marked an uptick, gaining 3.39 percent to $2,638.22.
