Bangkok: Bitcoin has surged to a new all-time high, with institutional buying reaching unprecedented levels following former President Donald Trump's endorsement of Bitcoin as a potential investment asset for retirement funds.
According to Thai News Agency, Bitget, a prominent cryptocurrency exchange, reported that Bitcoin's price has climbed to a new peak of $124,000, driving the overall crypto market capitalization to $4.1 trillion. This surge is largely attributed to Trump's push for the inclusion of cryptocurrencies like Bitcoin in US 401(k) retirement plans. Institutional investors are responding with increased buying pressure, further influenced by the possibility of the US Federal Reserve implementing three interest rate cuts this year. Recent US inflation data showed a rate of 2.8%, lower than expected, which may prompt these cuts and bolster the appeal of riskier assets.
Ethereum, another major cryptocurrency, is also experiencing a boost as its price approaches $4,700, close to its own record high. This growth is partly due to its integral role in decentralized finance (DeFi) and Web3 technologies. On August 11th, Ethereum ETFs saw a record $1 billion in inflows in just one day, with private firms incorporating Ethereum into their financial statements. These developments enhance Ethereum's status as an alternative investment, potentially driving further inflows in the near future.
The upward trend in Ethereum's value is mirrored by gains in other cryptocurrencies like XRP, Solana, and Dogecoin, signaling a possible shift from Bitcoin to altcoins. The Bitcoin Dominance Index, which measures Bitcoin's market share, has decreased from 62% to below 58%, suggesting the onset of an altcoin season.
Despite the bullish momentum in the crypto market, Ryan Lee, a chief analyst at Bitcoin, cautioned about potential market corrections. He noted that recent PPI manufacturing index data exceeded expectations, sparking concerns that the Federal Reserve might reconsider its position on interest rate cuts. This has already affected Bitcoin's price, which dropped to $117,000, and led to over $1 billion in futures trading liquidations. These fluctuations highlight the ongoing volatility of macroeconomic factors and their significant influence on Bitcoin's valuation, underscoring the need for investors to practice disciplined trading and risk management.