Bitcoin Smashes All-Time High as Fed Rate Cut Bets and US Crypto Reforms Ignite Rally

Bitcoin surged to a record high on Thursday, riding a powerful wave of optimism over potential Federal Reserve rate cuts and a series of landmark regulatory wins for the cryptocurrency sector in the United States. The world’s largest digital asset by market capitalization climbed as much as 0.9% in early Asia trading to $124,002.49, surpassing the previous peak reached in July. Ethereum, the second-largest cryptocurrency, also joined the rally, touching $4,780.04 — its highest level since late 2021.

Policy tailwinds meet technical breakout potential

The latest rally comes amid growing confidence that the Federal Reserve will begin cutting interest rates sooner rather than later, easing financial conditions and boosting appetite for risk assets.

“Technically, a sustained break above $125,000 could propel BTC toward $150,000,” said Tony Sycamore, market analyst at IG, in a client note. He attributed the momentum to a combination of Fed policy expectations, persistent institutional buying, and recent pro-crypto policy moves from the Trump administration.

Trump administration accelerates pro-crypto stance

President Donald Trump, who has openly dubbed himself the “crypto president”, has ushered in one of the most favourable regulatory climates for the digital asset sector in US history.

Since returning to the White House, Trump has signed into law key measures such as stablecoin regulations, SEC rule changes to better accommodate digital assets, and most recently, an executive order allowing cryptocurrencies in 401(k) retirement accounts.

The move could significantly expand the market by giving millions of Americans direct exposure to Bitcoin, Ethereum, and other crypto assets through retirement savings vehicles traditionally dominated by stocks and bonds. Major asset managers including BlackRock and Fidelity, both of which offer crypto exchange-traded funds (ETFs), are expected to benefit from the broadened investor access.

From election night to trillion-dollar boom

Since Trump’s election victory in November 2024, the crypto market’s total capitalisation has soared from roughly $2.5 trillion to over $4.18 trillion, according to CoinMarketCap data. Bitcoin alone has gained nearly 32% so far in 2025, driven by regulatory clarity and fresh institutional demand.

Despite the surge, the asset class remains highly volatile. Analysts caution that while crypto’s inclusion in retirement portfolios could boost adoption, it also carries risks given the sector’s history of sharp corrections.

Market resilience despite other policy turbulence

Interestingly, Bitcoin’s rise has shrugged off potential headwinds from Trump’s aggressive tariff policies, which have rattled other segments of the financial markets. For crypto investors, the promise of looser monetary policy and friendlier regulations appears to outweigh trade-related risks.

Economist perspective

According to Dr. Hannah Reed, senior economist at Digital Markets Institute, the rally’s drivers extend beyond short-term speculation. “When you combine an easier monetary stance with policy certainty for an industry that has historically operated in a regulatory grey zone, you create conditions for sustained institutional inflows. However, the volatility inherent in crypto means we could still see sharp pullbacks even in a broadly bullish environment,” she said.

With the Fed potentially weeks away from its next policy shift, Bitcoin’s trajectory could hinge as much on central bank signals as on the political momentum driving America’s crypto agenda.