Bitcoin breaks record of 124,000 USD

(Dan Tri) - Bitcoin not only broke its old peak but also gained strength from expectations of easing policy from the Fed and a series of unprecedented supportive legal moves from the government.

The global financial market witnessed a historic milestone in the early morning of August 14 (Vietnam time). Bitcoin (BTC), the world's largest digital currency, officially broke all previous records, reaching $124,002.49. This new peak broke the old record of $123,205.12 set on July 14, marking a new chapter for "digital gold".

The heat wasn’t just on bitcoin. Ether (ETH), the second-largest cryptocurrency, also jumped to $4,780.04, its highest price since late 2021. This simultaneous surge pushed the total market capitalization of the entire cryptocurrency market past $4.18 trillion, a huge number compared to the $2.5 trillion it was worth when Trump was elected in November 2024.

Notably, the cryptocurrency rally coincided with a surge in the US stock market, with the S&P 500 hitting record highs in a synchronization that underscored a strong risk-on sentiment, with smart money moving away from traditional blue-chip stocks and into volatile digital assets.

The world's largest cryptocurrency by market capitalization rose as much as 0.9% in early Asian trading to $124,002.49, surpassing its all-time high set in July (Photo: Reuters).

Decoding the "double push": Politics and macroeconomics

Behind the impressive numbers is a combination of two decisive factors, creating a perfect launching pad for bitcoin and the cryptocurrency market.

Since returning to the White House, President Donald Trump has made good on his promise to call himself the “cryptocurrency president.” A series of friendly regulatory moves have been enacted, removing barriers and creating an unprecedented environment for the industry in the US.

Stablecoin Governance Act: The passage of a clear legal framework for USD-pegged stablecoins has increased trust and legitimacy for an important part of the ecosystem.

Reform from the SEC: The US Securities and Exchange Commission (SEC) has made moves to reform regulations to better accommodate, rather than confront, this new asset class.

401(k) Breakthrough: Most notably, the executive order signed last week paves the way for digital assets to be included in 401(k) retirement accounts. This is a revolutionary change that has the potential to open up a huge and sustainable channel of capital into the market. Fund management giants like BlackRock and Fidelity, which operate crypto ETFs, will be big beneficiaries.

However, experts also warn about the risks of including a volatile asset like cryptocurrency in a long-term retirement savings portfolio, which prioritizes the stability of stocks and bonds.

The second factor comes from monetary policy. US inflation data released this week matched forecasts, strongly reinforcing the belief that the Fed will cut interest rates as soon as its meeting in September.

Lower interest rates reduce the appeal of safe havens like bonds, while encouraging investors to seek higher-yielding, albeit riskier, assets like stocks and cryptocurrencies. Essentially, when borrowing costs are cheap, money tends to flow more strongly into speculative corners of the market.

“Cryptocurrencies are positively correlated with stocks,” said Chris Newhouse, director of research at Ergonia. “The overall sentiment is quite positive.”

The maturation of demand: More than just a retail craze

The core difference between this bull run and previous cycles is the nature of the cash flow. While previous booms were mainly driven by retail fomo, this time the foundation of demand has become much more solid and "mature".

Ben Kurland, CEO of crypto research platform DYOR, analyzed: “The combination of cooling inflation, falling interest rate expectations and unprecedented institutional participation through ETFs has created a strong momentum.

The difference this time is that the basis of demand is more mature – it is not just retail investor excitement, but also structural buying from asset managers, corporates and even sovereign wealth funds.”

The strategy of holding bitcoin as a reserve asset in corporate treasuries, pioneered by Michael Saylor’s MicroStrategy, is becoming more widespread. The sustained and consistent demand for spot bitcoin ETFs is the clearest evidence of this institutional capital flow.

With the old high successfully broken, the big question now is where will bitcoin go? From a technical perspective, analysts are very optimistic.

"If bitcoin holds the $125,000 mark, it could go all the way to $150,000," said market analyst Tony Sycamore of IG.

Source: https://dantri.com.vn/kinh-doanh/bitcoin-xo-do-ky-luc-124000-usd-20250814081703054.htm