Fed rate cut expectations and strategic reserve plans fuel Bitcoin’s surge despite volatility
Bitcoin surged to record levels this week, propelled by US policy shifts and mounting institutional demand, according to Reuters.
The cryptocurrency climbed as much as 0.9 percent to US$124,002.49 in early Asia trading Thursday, surpassing its July peak.
Coin Metrics data cited by CNBC showed Bitcoin later touched US$124,496 late Wednesday before retreating after US wholesale inflation data came in above expectations.
Ether also rallied to US$4,780.04, its highest since late 2021, and reached US$4,791.19 overnight, edging close to its 2021 record of US$4,866.01.
Market momentum has been fuelled by long-sought regulatory changes under US President Donald Trump’s administration.
As per Reuters, this includes stablecoin regulations, an overhaul by the US Securities and Exchange Commission to accommodate crypto assets, and an executive order allowing crypto assets in 401(k) retirement accounts.
Asset managers such as BlackRock and Fidelity, which operate crypto ETFs, could benefit from the expanded access.
IG market analyst Tony Sycamore said that “technically a sustained break above US$125k could propel BTC to US$150k,” pointing to the combination of anticipated Federal Reserve rate cuts, consistent institutional buying, and a friendlier regulatory environment.
US Treasury Secretary Scott Bessent added another layer of intrigue to the market, according to Bloomberg, when he initially told Fox Business the US would not buy Bitcoin for its Strategic Bitcoin Reserve, relying instead on US$15bn to US$20bn in forfeited assets.
Hours later, he posted on X that these forfeited holdings would form the reserve’s base, and the Treasury would explore “budget-neutral pathways to acquire more Bitcoin to expand the reserve.”
Bitcoin that has been finally forfeited to the federal government will be the foundation of the Strategic Bitcoin Reserve that President Trump established in his March Executive Order.
— Treasury Secretary Scott Bessent (@SecScottBessent) August 14, 2025
In addition, Treasury is committed to exploring budget-neutral pathways to acquire more…
Jeff Dorman, CIO at Arca, told Bloomberg that designating seized Bitcoin as untouchable reserve assets removes a major source of potential market supply, eliminating “a US$10bn seller from the market.”
According to CoinMarketCap data cited by Reuters, the global crypto market capitalisation has grown to over US$4.18tn from about US$2.5tn in November 2024, when Trump won the US presidential election.
Ether has climbed 85 percent since June, overtaking Bitcoin as the market leader on the back of institutional accumulation, supply constraints, and corporate adoption, as reported by CNBC.
Ben Kurland, CEO at DYOR, told CNBC the rally signals “broad market conviction, not just a single-asset rally,” with momentum shifting from “speculative mania” toward institutional adoption and real-world integration.
For the week, CNBC reported Bitcoin was on track for a 1 percent gain, while ether was set to rise 12 percent despite Thursday’s pullback.
