Bitcoin recorded a fresh record high on Thursday, boosted by expectations of an interest rate cut by the Federal Reserve next month following recently announced financial reforms.
The world’s largest crypto by market capitalization rose 0.9 percent to $124,002.49 in early trading, surpassing its previous peak hit in July.
As of 5:33  GMT, Bitcoin was trading 0.44 percent lower at $122,823. Meanwhile, Ethereum held steady at $4,738.62.
Institutional flows and macro tailwinds support Bitcoin
Bitcoin’s surge is fueled by growing confidence in upcoming Federal Reserve rate cuts, continued institutional buying, and steps by the Trump administration to encourage investment in cryptocurrency.
So far this year, Bitcoin has climbed nearly 32 percent, boosted by long-awaited regulatory victories for the industry following President Donald Trump’s return to office. Trump has dubbed himself the “crypto president,” and over the past year, his family has actively engaged in the crypto space.
“Bitcoin’s rally is being powered by institutional flows and macro tailwinds. Corporate treasuries like MicroStrategy and Block Inc. continue to buy Bitcoin while Treasury Secretary Scott Bessent’s calls overnight for a 50bp Fed rate cut in September, and suggestions that the Fed funds rate is 150-175bp too high, is fuelling expectations of looser policy,” said IG market analyst Tony Sycamore in a post on X.
An executive order last week paved the way to allow crypto assets in 401(k) retirement accounts, highlighting an increasingly favorable regulatory environment in the United States.
“The Trump administration’s pro-crypto moves—like the GENIUS Act and the recently signed executive order allowing alternative assets, including cryptocurrencies, to be included in 401(k) retirement funds are supporting Bitcoin’s gains,” Sycamore added.
Technically, a sustained break above $125,000 could propel BTC to $150,000, he added.
Crypto market cap surges to $4.18 trillion
This year, the crypto industry has achieved several regulatory milestones, including the enactment of stablecoin regulations and the Securities and Exchange Commission’s initiative to update regulations to better accommodate digital assets.
Commenting on Ethereum, Sycamore added that the asset is “currently up a blistering 27 percent in August after its 48 percent rally in July.”
“The Trump administration’s pro-crypto moves institutional inflows, plus Ethereum’s DeFi dominance and Bessent’s call for rate cuts, are driving the charge. A sustained break above $4,867 would open the way for ETH to take another leg higher towards $5500,” he added
Bitcoin’s recent rally has fueled a broader upswing across the sector, despite the market uncertainty caused by Trump’s extensive tariff policies. Data from CoinMarketCap shows the total market capitalization of cryptocurrencies has surged to over $4.18 trillion, up from around $2.5 trillion in November 2024, following Trump’s election victory.
The latest boost for crypto adoption came last Thursday through an executive order aimed at making it easier to include digital assets in 401(k) retirement accounts.
The executive order may also benefit asset managers like BlackRock and Fidelity, which operate crypto exchange-traded funds (ETFs). However, adding cryptocurrencies to retirement accounts carries risks, as the asset class is generally far more volatile than the stocks and bonds that asset managers have traditionally used for these accounts.
