Bitcoin Hits Weekly High of $106,000: 2 Key Reasons Behind the Surge

Bitcoin Surges to Record $106K Amid U.S. Policy Shifts and Investor Optimism

Bitcoin rocketed to an all-time high of $106,000 on Sunday, May 18, marking its strongest weekly close ever and its highest valuation since February 2025. The breakout surpassed its previous record of $104,298.70, set in December last year, reinforcing the cryptocurrency's position as the dominant digital asset.

This dramatic rally pushed Bitcoin’s market capitalization to an impressive $2.11 trillion. According to major derivatives platforms, more than $44 million in short positions were liquidated as prices climbed, reflecting overwhelming bullish sentiment in the market.

Analysts attribute the surge to two major developments unfolding in the United States. The first is a controversial legislative proposal spearheaded by President Donald Trump, informally dubbed the “big, beautiful bill.” One of the bill’s most contentious provisions is a proposed 5% levy on overseas remittances made by non-U.S. citizens. With tens of millions of people in the U.S. regularly sending money abroad, the measure has sparked backlash from nations such as Mexico, which rely heavily on remittances.

The bill passed a key hurdle on Sunday night after receiving approval from the House Budget Committee. Observers believe that the remittance tax could accelerate the adoption of cryptocurrencies among migrants, particularly through the use of decentralized, self-custodied wallets—which, according to Coin Center, are not explicitly covered under the bill’s current legal framework. This loophole may encourage users to turn to crypto as an alternative to traditional money transfer services.

The second significant catalyst is the anticipated introduction of new digital asset legislation. Lawmakers are set to review the "Genius Act," a long-anticipated bill aimed at establishing a regulatory framework for stablecoins. Sponsored by Republican Senator Bill Hagerty, the legislation is being touted as a milestone in fostering responsible innovation in the crypto space and is expected to provide much-needed clarity to investors and businesses alike.

Bitcoin’s 2025 price trajectory has been anything but stable. After approaching $110,000 earlier in the year, it plunged by nearly 30% in April, bottoming out near $75,000. Much of this volatility has been fueled by geopolitical tensions and weakening confidence in the U.S. dollar, which continues to suffer under Trump's aggressive trade policies, particularly the imposition of steep tariffs on China and other major economies.

Amid these shifting political and economic conditions, Bitcoin’s recent upward momentum signals a potential turning point—not just for its price, but for how digital assets are viewed as a strategic hedge against monetary instability and evolving regulatory landscapes.