Bitcoin at record high – dollar falls! Economic worries are raging again!

Bitcoin at record high – dollar falls! Economic worries are raging again!

The Bitcoin price reached a new all-time high of $110,636.58 on May 22, 2025, continuing its impressive rally. The price is currently $110,049.82, an increase of 1.6%. This development comes against the backdrop of weak performance of the US dollar, which is under pressure.

Foreign exchange markets show that the dollar fell to 143.27 yen against the yen, the lowest level since May 7, 2025. Concerns about the U.S. financial situation have grown, particularly after a disappointing Treasury auction. President Donald Trump is currently working to push a comprehensive spending and tax cuts package through Congress. However, these measures are expected to add $3 trillion to $5 trillion to the national debt, causing jitters on Wall Street, especially after Moody's downgraded the U.S. credit rating.

The reactions on the markets

In this weak environment, gold is showing considerable strength and has reached its highest level in almost two weeks at $3,325.79. The euro held steady at $1.1330, after rising 0.4% on Wednesday. The British pound was flat at $1.3426, while the Swiss franc rose 0.1% to $0.8245.

The South Korean currency saw a rise to 1,368.90 per dollar but fell to 1,377.00 on Thursday. Current developments also show an increase in inflation in the UK, which rose to 3.5% in April, a 15-month high. This is due, among other things, to external factors such as the Easter holidays and changes in vehicle taxes.

Inflation and interest rate policy

Core inflation in the UK, the energy and food adjusted rate, is 3.8%. The services sector achieved inflation of 5.4%, exceeding the Bank of England's expectations. Given this development, market participants are reducing their expectations of further interest rate cuts this year.

Currently, only a quarter percentage point cut in interest rates is expected by the end of the year, which was discussed at the Bank of England's last meeting. While two members voted for a pause on rate cuts, the majority supported a cut to 4.25%. Although price momentum is expected to ease in the coming months, rising inflation remains a challenge for the Bank of England.

A look at the Asian stock markets shows that they opened with losses following weak guidance from the USA. Also on the agenda today are purchasing managers' indices for the euro area and the ifo business climate for Germany, which could possibly be given a boost by signals of relaxation in trade policy. Market developments remain dynamic and investors are closely monitoring the interactions between financial policy, interest rates and inflation developments.

For more details about Bitcoin development and market analysis, see the reports from marketscreener and lbbw.