By Herzlich
Bitcoin continued its record surge – briefly topping $123,000 on Monday – the latest sign that the digital token is gaining steam among mainstream investors, especially with a pro-crypto White House behind it.
The world’s largest cryptocurrency hit an all-time high of $123,153.22 before giving up some gains to trade at around $119,800 as of 4:30 p.m. Bitcoin is up more than 27% on the year.
“It’s riding a number of tailwinds at the moment,” said IG market analyst Tony Sycamore, citing institutional demand, expectations of further gains and support from Donald Trump as reasons for the bullishness.
The latest surge comes just ahead of the so-called “Crypto Week,” as the House of Representatives is scheduled to review a series of crypto bills – though most of this legislation is not focused on Bitcoin specifically.
Members of Congress are looking to create clearer regulations on the industry, like the Genius Act, which would create federal guardrails for stablecoins pegged to the US dollar.
US President Trump’s signature on the bills could help cryptocurrency shake its reputation as a contrarian asset.
During his presidential campaign, Trump branded himself as a pro-crypto leader and called for less stringent oversight on the industry.
“In previous cycles there was always a spectre of ‘what if the government bans it’ infecting investor psychology, with a significant [dampening] effect,” Joe Kelly, co-founder and CEO of crypto financial firm Unchained, told.
“With no such theory at play over the next few years, it is much harder to imagine and rationalize what will stop the reflexive process of Bitcoin achieving new all-time highs, drawing renewed interest and hitting all-time highs again.”
Institutional investors and corporations have poured into Bitcoin ETFs, or exchange-traded funds. Last Thursday, the ETFs notched their largest day of inflows with $1.18 billion.
Over the last six to eight weeks, investors have purchased $15 billion in Bitcoin ETFs, according to Markus Thielen, CEO of 10x Research.
BlackRock’s Bitcoin ETF is at nearly $90 billion in assets under management – making it the fastest-growing fund in the firm’s history.
Bitcoin has broken several records lately thanks to “massive unrelenting demand meeting limited supply,” Matt Hougan, chief investment officer at Bitwise Asset Management, told CNBC’s “The Exchange.”
“We expect Bitcoin to top $200,000 by the end of the year, which I know sounds like a very large number, but the flows we’re seeing from institutional investors and corporations are really significant,” Hougan said over the weekend.
Bitcoin’s continued rise will be tested by Trump’s trade war threats, most recently sending letters to the EU and Mexico warning of steep 30% tariffs.
Markets have shrugged off the news for now, with investors banking on Trump agreeing to deals for lower rates before his Aug. 1 deadline.
If the high tariff rates remain in place, investors may back away from riskier crypto bets.
High tariffs could reheat inflation and slow economic growth, the Federal Reserve has warned.
That could prompt policymakers to hike interest rates, which would also throw Bitcoin off course.
