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The cryptocurrency market experienced a 2% growth on Wednesday, with $258 million in short positions liquidated over the past 24 hours.
Bitcoin surged above $109,000 following a trade agreement with Vietnam and an increase in M2 money supply.
Ethereum, XRP, and Solana rose by 7%, 3%, and 4%, respectively, signaling the recovery of altcoin markets.
Bitcoin (BTC) rebounded to $109,000 on Wednesday, driven by a U.S.-Vietnam trade deal and a rise in global M2 money supply. This surge pushed its open interest (OI) to 689.78K BTC, valued at approximately $75 billion. The broader crypto market also rallied, with top altcoins Ethereum (ETH), XRP, and Solana (SOL) climbing 7%, 3%, and 4%, respectively.
Bitcoin and Crypto Market Rise Amid Vietnam Trade Deal and M2 Supply Surge
The cryptocurrency market rebounded on Wednesday, gaining 2% and reclaiming a $3.5 trillion market capitalization.
This rally followed former President Trump’s announcement that the U.S. had secured a trade agreement with Vietnam, easing certain tariffs on Vietnamese exports.
According to Trump, the deal imposes a 20% tariff on Vietnamese imports to the U.S., while goods "transshipped" to America will face a higher 40% tariff. He further noted that Vietnam would open its market to all U.S. imports with zero tariffs.
"In other words, they will ‘open their market to the U.S.,’ meaning we will be able to sell our products to Vietnam with zero tariffs," Trump wrote in a Truth Social post.
This development fueled Bitcoin’s rise, with the leading cryptocurrency gaining 3% in 24 hours. These gains pushed BTC to $109,000—just shy of its all-time high of $111,970—and increased its futures open interest (OI) from 651.66K BTC to 689.78K BTC (data from Coinglass). Open interest represents the total value of unsettled contracts in derivative markets.
Bitcoin’s rally may also be attributed to the increase in U.S. M2 money supply, which grew by 4.5% year-over-year in May, reaching a peak of $21.94 trillion (per *The Kiplinger Letter*). This marks the 19th consecutive month of growth, surpassing the previous record of $21.86 trillion set in March 2022.
M2 measures the money supply in an economy, encompassing cash, checking deposits, savings accounts, and certificates of deposit available for spending and investment.
Historically, Bitcoin lags behind global and U.S. M2 supply changes by three to six months. Currently, global M2 liquidity trails Bitcoin by three months, suggesting the cryptocurrency may continue its upward trend in the coming months.
Meanwhile, Bitcoin’s rise to $109,000 triggered gains in altcoins, with Ethereum, XRP, and Solana rising 7%, 3%, and 4% respectively. The broader altcoin market saw significant gains, with most top-100 tokens climbing over 7%.
The crypto market’s surge resulted in $320.6 million in liquidations over the past day, including $62.8 million in long liquidations and $258.5 million in short liquidations (Coinglass data).
FAQ Section
Q: Why did Bitcoin surge above $109,000?
A: Bitcoin’s rise was fueled by a U.S.-Vietnam trade agreement and an increase in global M2 money supply, boosting investor confidence.
Q: How does M2 money supply affect Bitcoin?
A: Bitcoin tends to react to M2 supply changes with a 3-6 month delay. Rising M2 liquidity often precedes Bitcoin price increases.
Q: Which altcoins performed well in this rally?
A: Ethereum (7%), XRP (3%), and Solana (4%) led the altcoin market recovery.
Q: What caused the recent crypto market rebound?
A: Positive macroeconomic developments and short liquidations contributed to the market’s 2% growth.
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Conclusion
Bitcoin’s resurgence highlights its sensitivity to macroeconomic factors, while altcoins reinforce their growth potential in recovering markets. As global liquidity expands and trade policies evolve, cryptocurrencies remain a dynamic asset class.
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Disclaimer: This content reflects the author’s opinion and should not be considered financial advice. Always consult an independent financial advisor before making investment decisions. CFDs are leveraged products that may result in the loss of your capital. Invest cautiously.