Bitcoin is continuing its ascent into unexplored territory as a set of macroeconomic and fiscal policies converge.
The largest crypto by market cap swelled to a record $121,800 on Sunday and is on track to set a new high in the early Asian session on Monday. Singapore firm QCP Capital attributed the milestone to “both exuberance and structural strength” in its latest market note.
Two forces dominate the macroeconomic landscape—President Donald Trump’s Tariffs and the U.S.’s dominant fiscal position.
QCP called it “just-in-case financing” as global supply chains continue frontloading imports and production ahead of anticipated U.S. tariffs. This has ignited trade credit expansion and manufacturing growth despite policy uncertainty.
The second aspect is elevated Federal Reserve Funds Rates and soaring Treasury interest payments recycled into corporate and household balance sheets.
Together, this has created a “Goldilocks-like equilibrium” of contained inflation and robust growth for the U.S. markets, QCP.
“The U.S. economy looks strong overall and inflation is generally well contained, albeit with some tariff-induced pressure to the upside,” Kelvin Koh, co-founder and CIO of Spartan Group, told Decrypt.
Bitcoin’s repeated all-time highs come as participants pivot to risk-on sentiment following this year’s earlier caution, sparked by uncertainty over U.S. trade policy.
As of July 14, both the spot Bitcoin and Ethereum ETFs have attracted $3.39 billion and $1.10 billion in inflows.
“Expectations of U.S. interest rate cuts in 2025 have fueled a risk-on sentiment, supporting Bitcoin’s rally as a hedge against inflation,” Ryan Lee, analyst at Bitget Research, told Decrypt last week.
The $120,000 level breakout may just be the prologue to Bitcoin’s rally, especially with Treasury payments and tariff uncertainty acting as tailwinds.
“With a strong economy, inflation concerns not being an issue, and the rate cuts coming, the environment is favorable for risk assets in general,” Koh said.
“For crypto, you have the added benefit of favorable regulatory developments in the U.S., ongoing buying from treasury companies—which continues to grow in numbers by the day—and growing institutional participation.”
Steve Gregory, advisor to crypto exchange vTrader, meanwhile, told Decrypt there is “a surge in demand for $130,000 strike price Bitcoin calls” on Friday, highlighting the possibility of an extended Bitcoin rally.
Analysts speaking to Decrypt said sustained capital inflows into ETFs and a substantial uptick in open interest for derivatives could allow Bitcoin to grind higher.
