After months of silence, the cryptocurrency market has regained its vitality. Bitcoin has surged to $104,000, returning to its high since February. Ethereum saw a staggering daily increase of 20%, while Ripple also rose by 7%. So, what is driving the rise of these top cryptocurrencies?
So, what is driving the price increases of Bitcoin, Ethereum, and Ripple? Let's explore the reasons behind this sudden surge.
The Federal Reserve maintains interest rates.
On May 7, after the Federal Reserve decided to keep interest rates unchanged, Bitcoin and other cryptocurrencies began to rise. Due to concerns about slowing economic growth and high inflation, they maintained interest rates between 4.25% and 4.50%.
Jerome Powell also stated that tariffs could harm the economy. As a result, investors are turning to cryptocurrencies as a safety net.
Global trade agreements are being relaxed.
More optimistically, the US and UK have announced a significant trade agreement that not only lowers tariffs but also improves market access.
There is more to come, as US and Chinese leaders are preparing to discuss trade issues again, which could further reduce tariffs. This will be another victory for the cryptocurrency world.
Bitcoin dominates the rally.
The increase in Bitcoin is not solely due to news; there is strong support behind it. States like Missouri, Arizona, and Oregon have passed new cryptocurrency-friendly laws. Missouri even eliminated taxes on Bitcoin gains, making it easier for people to invest.
Meanwhile, Bitcoin ETF has also seen a continuous inflow of funds. On May 8, the inflow amount for BTC ETF reached $117 million, led by BlackRock with an inflow of $69 million; Fidelity and ARK Investment saw inflows of $35.3 million and $13.1 million respectively.
Ethereum's Pectra upgrade.
Bitcoin overall rose by 5%, while Ethereum seized the spotlight with the Pectra upgrade, which improved wallet access and increased staking limits. This technological leap pushed ETH above $2,220, making it one of the top 25 cryptocurrencies with the largest daily gains.
Despite the increase, Ethereum's price is still nearly 55% lower than its historical high of $4,721.
Ripple XRP is accelerating its growth.
Meanwhile, the fourth largest cryptocurrency by market capitalization, Ripple (XRP), also saw a rise of nearly 7%, currently trading at around $2.29. The price of Ripple surged further after news emerged that it might soon reach a settlement with the US Securities and Exchange Commission (SEC).
In addition, the new agreements between Ripple and Hidden Road and Wellgistics Health using XRP for payments further boosted its price.
