Bitcoin (BTC) price breaks $109,000 to hit new all-time high

Bitcoin initially rose to $109857 in value during trading Wednesday morning as trade war tensions eased between the United States and China

May 21 (UPI) -- Bitcoin (BTC) initially rose above the $109,000 threshold on Wednesday morning as traders reacted to the latest developments in the U.S.-China trade war and a recent U.S. credit downgrade.

Bitcoin rose as high as $109,857 during morning trading hours, the cryptocurrency's highest price since its creation in 2008, according to data from the Bitstamp exchange.

The cryptocurrency later fell to $106,678.74 during afternoon trading hours.

“Bitcoin’s new high has been concocted by an array of favorable ingredients in the macro cauldron,” Nexo crypto exchange co-founder Antoni Trenchev told CNBC.

Softer U.S. inflation numbers, a de-escalation in the U.S.-China trade war and the Moody’s downgrade of U.S. sovereign debt “has put the spotlight on alternative stores of value like Bitcoin,” Trenchev said.

The record price arrived with a 3% increase in Bitcoin’s value during morning trading hours, though much of that increase receded by a nearly equal amount by the time afternoon trading began.

Bitcoin has seen a 26% rise in value over the past 30 days and reached its current record price nine days after the Trump administration announced a 90-day trade agreement with China, according to Cointelegraph.

Bitcoin was trading for $74,434 on April 7 and just five days after President Donald Trump announced his reciprocal tariffs trade policy on April 2.

Recent trade war de-escalation, improved regulatory oversight and the possibility of cease-fire talks between Russia and Ukraine have helped Bitcoin to begin its 26% climb in value so far in May, said Jag Kooner, derivatives leader at Bitfinex exchange.

“The Russia-Ukraine cease-fire talks have defused one of the primary geopolitical volatility engines of the past two years,” Kooner told Cointelegraph.

“We’re seeing capital rotate into [Bitcoin] and high-beta tech as the need for geopolitical hedging fades, but liquidity remains abundant,” Kooner said.

While Bitcoin reached a new all-time high early Wednesday, Dogecoin saw a larger percentage gain during the day’s trading.

Dogecoin rose 6% in value over the past 24 hours, but that value is just 23 cents for the meme coin, according to decrypt.

Increased interest and investment in cryptocurrency follows GOP lawmakers' recent introduction of legislation to create a national strategic Bitcoin reserve to improve the nation's finances.