Bitcoin rose 1.9% this week as May consumer inflation hit 4.2% year over year and risks from the Iran conflict eased, according to crypto market maker Wintermute. The CPI reading marked the third consecutive monthly acceleration and the highest level since 2023, though it matched expectations. Wintermute said in its latest weekly market update that the recovery remains fragile despite two macro developments lifting risk assets.
May CPI Data and Iran Conflict Resolution Support Risk Assets
U.S. consumer inflation for May came in at 4.2% year over year, matching expectations. Core inflation eased to 2.9%. Wintermute said the data suggests latest price pressure may be driven more by energy than by a broader rise in wages and services.
The Iran conflict ended after more than 100 days. President Donald Trump authorized the reopening of the Strait of Hormuz and the lifting of the naval blockade. A formal signing is set for June 19 in Switzerland.
Oil prices fell sharply as the risk premium unwound. Brent dropped from the high $110s to the low $80s over the past month, including a 6.6% decline this week. The dollar weakened 1%, while the 10-year Treasury yield moved back toward 4.50%.
The Russell 2000 rose 4%, the Nasdaq gained 2.3%, altcoins climbed 3.1%, and bitcoin added 1.9%. Ether slipped 0.4% despite the broader rebound.
Digital Asset Treasury AUM Falls to $140 Billion as ETF Outflows Continue
The latest recovery follows a sharp selloff two weeks ago, when bitcoin fell 14% and the broader crypto market dropped more than 10%. Some traders blamed Strategy's sale of 32 BTC, according to Wintermute.
Bitcoin has suffered three drawdowns of more than 20% since October. Wintermute said perpetual and options markets show little appetite for strong directional bets.
Wintermute said crypto still depends heavily on three capital channels: stablecoins, exchange-traded funds, and digital asset treasury companies. Digital asset treasury assets under management have fallen to about $140 billion from $220 billion. Outside Strategy, Bitmine, and Strive, fresh fundraising has largely slowed. Bitcoin ETFs recently posted their longest outflow streak since launch, while stablecoin flows remain under pressure.
Federal Reserve Meeting to Test Bitcoin Rebound
No rate change is expected at the Federal Reserve meeting. Attention will fall on the updated projections and Kevin Warsh's first press conference, according to Wintermute.
FAQ
What caused Bitcoin to rise 1.9% this week?
Bitcoin rose 1.9% as May CPI hit 4.2% year over year, matching expectations, and the Iran conflict ended with President Donald Trump authorizing the reopening of the Strait of Hormuz. Wintermute said these two macro developments helped lift risk assets.
How much have digital asset treasury assets declined?
Digital asset treasury assets under management have fallen to about $140 billion from $220 billion, according to Wintermute. Outside Strategy, Bitmine, and Strive, fresh fundraising has largely slowed.
When is the formal signing for the Iran conflict resolution?
A formal signing is set for June 19 in Switzerland, following President Donald Trump's authorization to reopen the Strait of Hormuz and lift the naval blockade.
