Why Did Bitcoin and Altcoins See a Strong Rebound Today?
On Thursday, Bitcoin (BTC) surged to $111,000, a record high. In addition to Bitcoin, other cryptocurrencies also rose. Ethereum (ETH) broke through the important $2,500 mark and rose further to $2,600. Cardano (ADA) rose more than 4%, Solana (SOL) rose more than 5%, and Avalanche (AVAX) rose more than 6%.
The rise in the cryptocurrency market has triggered a wave of liquidations. Data from CoinGlass shows that more than $500 million in leveraged positions have been liquidated in the past 24 hours. The largest single liquidation occurred on Bybit, where $6.36 million worth of BTC/USD positions were liquidated.
Why the rise?
One reason for Bitcoin's rise may be a shift in government regulatory attitudes from the United States.
On Monday, the U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS Act) by a vote of 66 to 32. The bill requires issuers to hold cash or U.S. Treasuries as reserves and comply with anti-money laundering and counter-terrorist financing standards.
This provision is an important piece of legislation that establishes the first broad federal regulatory framework for stablecoins and takes a substantial step towards mainstreaming digital assets. The bill also authorizes the Federal Reserve to regulate stablecoins to ensure that these digital assets operate safely and reliably.
Regulatory clarity is widely seen as a positive sign and boosts investor confidence across the cryptocurrency space.
Another key factor driving Bitcoin's gains may be related to the surge in inflows into Bitcoin exchange-traded funds (ETFs).
According to SosoValue data, Bitcoin ETFs received $608.99 million in new inflows on May 21, marking the sixth consecutive day of net inflows, indicating growing investor optimism about BTC. BlackRock's iShares Bitcoin Trust (IBIT) alone achieved $530.6 million in net inflows, the highest level since early May. IBIT has not seen outflows since April 9.
Eric Balchunas, an ETF analyst at Bloomberg, believes that ETF inflows are a “classic frenzy” triggered by Bitcoin’s recent price rise. Balchunas added that the last time ETF trading volume surged to current levels was in January of this year, when Bitcoin’s trading volume was around its all-time high.
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