Bitcoin surged to a record high early Thursday, hitting $124,000 as investors piled into cryptocurrencies on growing confidence in President Donald Trump’s pro-crypto reforms and expectations of a U.S. Federal Reserve interest rate cut in September.
The world’s largest cryptocurrency by market value briefly climbed 0.9 percent to surpass its July peak before settling near $121,500. The move follows a sharp breakout from $116,000 earlier in the week, an impulsive rally that analysts say confirms strong demand and momentum.
Ethereum, the second-largest crypto asset, also rallied to $4,700, its highest level since late 2021, amid steady institutional buying. Combined, Bitcoin and Ether now account for roughly 70 percent of the entire cryptocurrency market, according to CoinGecko, with Bitcoin’s market value reaching $2.5 trillion and Ether’s swelling to nearly $575 billion.
Trump factor powers rally
President Trump, who has branded himself the “crypto president,” has in recent months rolled out initiatives designed to make it easier for Americans to invest in digital assets.
These include regulatory overhauls at the Securities and Exchange Commission to accommodate cryptocurrency products and the adoption of new laws governing stablecoins.
Last Thursday, the White House issued an executive order allowing Bitcoin and other cryptocurrencies to be included in 401(k) retirement accounts, a landmark move in the $7.5 trillion U.S. retirement savings market.
The reforms come despite market concerns over Trump’s expansive tariff policies, which have stirred volatility in traditional markets. However, the prospect of easier access to crypto, coupled with lighter regulatory hurdles, has outweighed those risks for many investors.
Fed rate cuts seen as catalyst
This week’s U.S. inflation data added further fuel to the rally, reinforcing expectations that the Fed will lower interest rates in September. Lower borrowing costs typically encourage investment in riskier assets, from growth stocks to cryptocurrencies.
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The synchronised rally in equities and digital assets shows investors are chasing yield and growth ahead of expected monetary easing. Crypto is no longer just a speculative corner, as it is moving in step with mainstream benchmarks.
Institutional and systematic demand
Institutional interest has remained a critical driver of Bitcoin’s ascent, with steady inflows into crypto-focused exchange-traded funds and treasury allocations from large corporations. Market data indicates that monthly payroll contributions into 401(k) plans could create a consistent buying base for Bitcoin regardless of price swings, helping to stabilise the market.
Citi analysts have noted that Bitcoin’s price action is becoming increasingly tied to who is buying and how often, rather than just supply-side factors like halving events. “The adoption-driven price thesis is now supported by hard policy changes,” Citi wrote in a recent client note.
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