Bitcoin and the broader cryptocurrency market surged on Wednesday, mirroring a powerful rally in equities driven by renewed hopes for a US-Iran diplomatic breakthrough and a wave of strong AI-related earnings.
The Dow Jones Industrial Average jumped over 600 points (1.24%), the S&P 500 set a new record at 7,365.09 (+1.46%), and the Nasdaq Composite climbed 2.03% to a record 25,838.94. The risk-on sentiment quickly spilled into digital assets, sending Bitcoin past $72,000 and Ethereum above $4,100, both gaining more than 4% intraday.
Geopolitical optimism was the primary catalyst after reports that Washington and Tehran were reviewing a framework to end the conflict. The proposal includes a gradual reopening of the Strait of Hormuz and a moratorium on nuclear enrichment. While President Trump tempered expectations, calling the deal a “perhaps, a big assumption,” oil prices tumbled—WTI crude fell 6% to $95 per barrel and Brent dropped 7% to $101—easing inflation fears and boosting risk assets.
Simultaneously, AI-driven momentum energized markets. Advanced Micro Devices surged nearly 19% after an upbeat forecast, while Nvidia rose 5.7% and Super Micro Computer soared 24.5%. The PHLX Semiconductor Index gained 4.5%, extending its year-to-date gain to 62%. The rally underscored persistent institutional appetite for technology infrastructure, a trend that often carries over to crypto, where AI-related tokens also saw sharp gains.
US economic data reinforced the positive backdrop. ADP reported private payrolls rose by 109,000 in April, soundly beating estimates and signaling labor market resilience. The figure reduces pressure on the Federal Reserve to cut rates, supporting a stable macro environment that crypto markets have historically favored.
The combination of easing geopolitical tensions, declining energy costs, and continued AI exuberance created a near-perfect storm for risk assets. Bitcoin’s move above its previous range triggered a wave of short liquidations, with over $200 million in bearish bets wiped across centralized exchanges. Ethereum outperformed, benefiting from both macro tailwinds and growing anticipation of upcoming network upgrades.
