The price of Bitcoin (BTC) surpassed its previous peak at around $123,000 to register a new all-time high at $124,000 today. The development comes amid rising anticipation of an interest rate cut by the U.S. Federal Reserve and sustained institutional demand for crypto assets.
The world’s largest cryptocurrency by market capitalization rallied 3.64% in 24 hours to trade at $124,347. It has since pulled back to the $121,000 level.
Bitcoin Rallies to New ATH as Traders Anticipate the Fed to cut Interest Rates by 25 bps in September, U.S. Inflation Cools Down
Bitcoin’s ascent to a new peak was driven by strong optimism surrounding a potential 25 basis points (bps) rate cut by the Fed at next month’s Federal Open Market Committee (FOMC) meeting.
The move also comes less than a month after BTC price rallied to its previous ATH of $123,091, a milestone that was ushered in by July’s ‘Crypto Week’ that saw the GENIUS Act, the first major crypto legislation in the United States, signed into law by President Donald Trump.
The latest rally follows the release of July’s U.S. Consumer Price Index (CPI) print, which showed inflation holding steady at 2.7% year-over-year and remaining unchanged from June’s numbers, but lower than analysts’ forecast of 2.8%. Meanwhile, core CPI, which excludes food and energy prices, rose to 3.1%, higher than expected.
Following the report’s release, the CME FedWatch tool increased its odds of an interest rate cut next month to 93.9%, a major catalyst for the flagship crypto’s price.
Experts say that Fed rate cuts and a shift away from quantitative easing are historically bullish for Bitcoin, as they would lead to more liquidity injection into the crypto market and boost risk-on sentiment.
Crypto investors are also anticipating Trump’s economic agenda outlined in the One Big Beautiful Bill (BBB) to increase government spending and inflation, which will trigger risk-seeking across financial markets.
U.S. Treasury Secretary Scott Bessent even hinted at the possibility of a 50 bps rate cut, which would be massive for BTC and other cryptocurrencies.
Currently, the target federal funds interest rate set by the Federal Reserve is 4.25% to 4.50%, which has been held steady since the July 30 meeting. The central bank’s decision to hold rates steady was influenced by lingering uncertainty surrounding the Trump administration’s tariff policy and inflationary pressures.
Still, a dovish pivot isn’t guaranteed, as Fed Chair Jerome Powell has stated that the Fed considers 12-month inflation before making a decision. The rise in core inflation is a potential concern despite the headline number cooling down last month.
Trump has intensified his calls for the Fed to cut interest rates, demanding a full percentage point reduction, citing strong job growth and cooling inflation as justification. He has repeatedly criticized Powell for not reducing the rates, labelling him as “too late” and “stubborn” in social media posts.
The President argued that lower rates are necessary to counteract the economic impact of his tariff policies and pointed to rate cuts by the European Central Bank (ECB) as a model to follow.
He also threatened to remove Powell as the Fed Chair, and is reportedly interviewing potential candidates to replace the 72-year-old, who was initially nominated by Trump in 2018, and later renominated for a second term in 2022 by President Joe Biden. Powell’s current term as the chairman of the Federal Reserve ends on May 15, 2026.
Bitcoin Surpasses Google and Amazon in Market Cap – Strategy and El Salvador’s Holdings Register ATH Values
By setting a new all-time high, Bitcoin has surpassed Alphabet (GOOG) and Amazon (AMZN) stocks to become the sixth-largest asset by market cap, with only gold, Nvidia (NVDA), Microsoft (MSFT), and Apple (APPL) ahead of the flagship cryptocurrency.
Meanwhile, the BTC holdings of Strategy (formerly MicroStrategy), the world’s largest corporate Bitcoin treasury company, reached an ATH in terms of value. The company’s co-founder and chairman, Michael Saylor, pointed out earlier today that its 635,020 BTC stockpile closed at an all-time high of $77.2 billion.
President Nayib Bukele of El Salvador also shared the latest valuation of his country’s Bitcoin holdings. Thanks to the price rally to $124,000, the Central American nation’s treasury holdings are valued at $768.85 million, returning an unrealized profit of over $468 million on its initial investment from late 2021.
Also Read: Bitcoin Hits a New All-Time High of $123,000: What’s Next?
Spot BTC and ETH ETF Weekly Inflows Cross $1 Billion as Institutional Demand Soars, Suggesting Further Upside Through Year-End
Anticipation surrounding the Fed’s rate cuts was also reflected in the crypto ETF market, which saw significant inflows over the past day, adding to the bullish sentiment present throughout the crypto market. According to data from Farside Investors, net inflows to spot Bitcoin ETFs reached $65.9 million, while Ether ETFs recorded $523.9 million in share purchases on Tuesday.
While netflows into Bitcoin ETFs have slowed, the funds still managed to attract $1.02 billion in inflows since Friday. ETH-backed ETFs saw their first $1 billion inflow on Tuesday, which was largely driven by the second-largest cryptocurrency rising 2.3% in 24 hours to reach $4,717, nearing its $4,900 all-time high set in 2021.
Rachel Lucas, an analyst at BTC Markets, highlighted that Bitcoin’s price is benefiting from a “perfect storm” of institutional demand from spot ETFs and corporate treasuries. She noted that over the past month, BTC ETFs have added more than $3.6 billion, while corporate and sovereign treasuries now hold 3.64 million coins, accounting for more than 17% of the circulating supply.
Lucas believes that the combination of finite supply and deep structural demand is positioning Bitcoin for sustained upward momentum through the rest of the year, but not without some consolidation, which is expected in the range between $120,000 and $125,000. She pointed out that long-term holders are growing confident in the market’s potential and view BTC and ETH as core portfolio assets.
Hyblock’s liquidation heatmap shows Bitcoin price pushing through a short liquidation cluster, which began at $122,500, with further forced closure positions that extend to $124,000. CoinGlass data suggests that nearly $2 billion in BTC short positions are at risk of being liquidated if traders push the price through the liquidity cluster.
The latest price rally pushed Bitcoin’s market cap above $2.45 trillion, while the total crypto market cap hit a record-setting $4.15 trillion.
At the time of writing, Bitcoin (BTC) is trading at $121,650, up 1.32% in the last 24 hours.
