Crypto Market Surges 2% as Bitcoin Leads Rally, Gold Prices Rise

The cryptocurrency market witnessed a notable surge today, with the total market capitalization increasing by approximately 2 percent to around $2.92 trillion. This upward trend was primarily driven by a 3.2 percent increase in Bitcoin's price, which in turn influenced the broader altcoin market, including Ethereum, XRP, and Solana.

One of the key factors behind this surge is the recent rally in gold prices, which have consistently closed above $3,000 per ounce for the past three days. Bitcoin, often referred to as digital gold, has shown a positive correlation with gold, leading to a rebound from its crucial support level of around $80,000. This correlation has also benefited the wider altcoin market, which has rallied in tandem with Bitcoin.

Another significant factor is the impact of U.S. tariff measures on inflation. Fed Chair Jerome Powell highlighted that these measures have already begun to pump inflation, with expectations of a slight rise to 2.7 percent by the end of 2025 from the current level of 2.5 percent. Despite this, Powell emphasized that the economy remains healthy amidst anticipated slow growth. Following this announcement, major U.S. stock indexes, including the S&P 500, Nasdaq Composite, and the Dow Jones Industrial Average, gained around 1 percent. The positive correlation between the crypto market and these stock indexes has contributed to the overall rally in the cryptocurrency industry.

Renewed demand from whale investors has also played a crucial role in the market's surge. The overall demand for crypto assets has increased, with U.S. spot Bitcoin ETFs experiencing three consecutive days of cash inflows. This trend has increased the likelihood of ending the week with net cash inflows. Additionally, the rising on-chain activities of whales have resulted in a decline of about 2,022 BTCs from centralized exchanges, further driving up prices.

The regulatory outlook has also significantly benefited the wider crypto market. Under the current administration, several crypto litigations have been dropped by the U.S. SEC and CFTC. This regulatory clarity has provided a more predictable environment for cryptocurrency investments, encouraging more participation from institutional investors. For instance, the U.S. SEC has dropped the appeal of the long-standing lawsuit against XRP sale, which has been a major catalyst for the surge in XRP's price.