The leading cryptocurrency by market cap rose over 7.5 percent to $66,250, its biggest percentage gain since March 20, according to TradingView and CoinDesk data. Like other risk assets, BTC is sensitive to expected changes in the monetary policy stance of major central banks, rallying when the cost of borrowing fiat money is predicted to fall.

Data released yesterday by the US Labor Department showed the consumer price index (CPI) rose less than consensus forecasts in April, pointing to a renewed decline in the cost of living in the world's largest economy.

Other data showed retail sales growth stalled in April, with sales in the "control group" category that feeds into the GDP calculation falling 0.3% month-on-month.

Fed funds futures show investors expect the Fed to cut rates by the first 25 basis points in September. The Fed recently signaled that it would reduce the pace of quantitative tightening, which is also a liquidity tightening tool, starting from June.

Markets expect the Bank of England (BoE) and the European Central Bank (ECB) to cut interest rates in June. The Swiss National Bank (SNB) and the Swedish Riksbank have already reduced benchmark borrowing costs.

According to data from MacroMicro, central banks around the world are turning to liquidity easing, which is a positive sign for risk assets including cryptocurrencies.

While the percentage of global central banks whose last move was to increase interest rates is decreasing rapidly, the percentage of banks that are reducing interest rates is increasing.

Easing liquidity in the summer months could support stocks and provide investors with enough confidence to "stay further out of the risk curve," according to broker Pepperstone.