Bitcoin is soaring! 85,000 people were liquidated, and the Federal Reserve made a heavy statement! What happened?

Since last night, Bitcoin has started a violent rise mode, breaking through $71,000 in one fell swoop; Ethereum has reversed its decline and soared nearly 20%, with the price reaching around $3,700.

Other altcoins have also performed well, especially the Ethereum ecosystem, with LDO up 20.1%, OP up 15%, ARB up 16.7%, UNI up 19.5%, and ENS up 19.3%. These mainstream concept coins all benefited from ETH.

Why did the crypto circle suddenly go crazy? There are three main reasons:

1) First, there was an emergency on the supply side. On May 20, the Venezuelan government announced a ban on cryptocurrency mining because of excessive electricity demand, disconnected all Bitcoin mines from the power grid, and seized more than 11,000 Bitcoin mining machines.

With less supply and continued demand growth, the net assets of Hong Kong ETFs increased by $244 million, while US ETFs accumulated more than 14,000 bitcoins in the past week.

2) The credit of the US dollar weakened. Specifically, spot gold has also continued to strengthen recently. Bitcoin itself has the reputation of digital gold, and the corresponding performance should also be good. Recently, although the US dollar index remains high, physical assets such as gold continue to rise.

To be honest, this rise was somewhat unexpected, but it was also reasonable. After all, the US CPI inflation data in April was in line with expectations, which once again raised expectations for interest rate cuts. Once interest rates are cut, liquidity will be released, which will be better for the crypto market.

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