Bitcoin Hits 3-Month High

Bitcoin fell to around $74,000 in late May, reaching its lowest level in over five weeks, coinciding with signs of cooling institutional demand. US spot-Bitcoin ETFs have posted roughly $1 billion in net outflows so far this month, snapping a two-month streak of inflows. Bitcoin’s implied volatility also dropped to a nine-month low, as muted trading activity and waning speculative interest reduced demand for downside protection in the options market. Meanwhile, risk appetite was further dampened by ongoing Middle East uncertainty, as renewed hostilities have raised doubts over the viability of a lasting agreement despite continued negotiations. Markets also remained focused on the legislative breakthrough for the crypto market, as the Clarity Act cleared the Senate Banking Committee earlier this month, though analysts note that the bill still faces an uncertain path ahead.

Bitcoin fell to around $76,000 in mid-May, hitting its lowest level in more than two weeks as uncertainty surrounding the US-Iran war weighed on risk appetite. President Donald Trump continued to adopt a tougher stance toward Tehran as talks between Washington and Iran remained stalled, while reports emerged that energy facilities in the Persian Gulf were struck over the weekend. The developments fueled fears of stronger inflation and triggered broad risk aversion across financial markets. Consequently, more than $1 billion flowed out of US-listed spot Bitcoin ETFs last week, marking the first weekly outflow above that level since late January. Limiting further losses, a Senate panel recently approved the Clarity Act, the first broad piece of legislation aimed at regulating the crypto industry in the US. The move was seen as a positive step toward clearer regulatory frameworks for digital assets, potentially supporting institutional participation and long-term adoption.

Bitcoin climbed above $80,000 in early May, reaching its highest level since February, as it tracked gains in other risk assets. Sentiment was also lifted by optimism that the US could reach an agreement on a key stablecoin yield provision, potentially paving the way for broader crypto legislation to advance in the Senate. Meanwhile, markets assessed comments from President Trump that the US would begin guiding neutral vessels through the Strait of Hormuz to help them navigate the conflict zone with Iran. However, a senior Iranian official warned that any US involvement in the waterway would be viewed as a violation of the ceasefire. The strategic passage remains a key flashpoint, with shipping disruptions inserting volatility to broader risk assets. Despite this turbulence, Bitcoin has remained resilient, rising about 12% in April. Institutional demand also improved, with US Bitcoin exchange-traded funds recording $630 million in net inflows last week.