According to a report by CoinDesk, ARK Invest, an asset management company led by Cathie Wood, pointed out that the rise of Bitcoin to a historic high occurred against the backdrop of significant economic stress. Some capital seeking returns and risk hedging appears to have flowed into Bitcoin, while the market has yet to show signs of excessive speculation.
ARK Invest stated that Bitcoin’s 11.1% increase in May surpassed that of gold, and the price broke through key resistance levels. This surge coincided with noticeable signs of pressure in the two traditional pillars of American consumer markets: real estate and automobiles.
In the housing market, the number of sellers far exceeded that of buyers. ARK Invest attributed this trend to the rapid interest rate hikes by the Federal Reserve since 2022. As housing affordability continues to deteriorate, home prices are facing increasing pressure, while real estate remains the largest source of net worth for American households. Meanwhile, the automobile market is also showing signs of recession. Car sales, which were boosted earlier this year due to anticipated tariff increases, saw a significant decline in May, dropping from over 17 million units the previous month to 15.6 million units.
ARK Invest noted that as these markets weaken, Bitcoin seems to be attracting a portion of capital seeking returns and risk hedging. Bitcoin spot ETFs attracted $5.5 billion in May, more than three times the inflow for gold ETFs. The company believes that the current rebound in Bitcoin has not yet shown signs of excessive speculation, as profit-taking behavior among investors remains moderate, with unrealized gains significantly lower than those observed during past market bubbles.