 "Bitcoin hits all-time high, surpasses $112,000 as traders shrug off tariff fears")
Bitcoin surged past $112,000 to an all-time high on Wednesday afternoon as traders shrugged off fears of tariffs and converged around the cryptocurrency.
With the latest surge, Bitcoin has gained around 20 per cent so far this year.
“Voracious demand from equity market vehicles such as ETFs (exchange traded funds) and digital-asset Treasuries has underpinned a continuous bid for Bitcoin,” said Spencer Hallarn, global head of OTC trading at crypto investment firm GSR, to Bloomberg.
Amid uncertain trade climate upset by topsy-turvy policies of US President Donald Trump, traders have also sought bitcoin as a hedge against global trade tensions and a weakening US Dollar.
The election of Trump last year also gave a boost to cryptocurrency last year as he has a favourable view of cryptocurrencies. He has floated a cryptocurrency of his own and has made billions from it.
What makes the current surge different is that it is driven by institutional demand of cryptocurrency.
“BTC’s move through US$112,000 reflects the compounding effects of strong ETF inflows, rising institutional adoption, and a favourable macro backdrop. With rate cuts back on the table and political instability rising globally, investors are reaching for hard assets and Bitcoin is benefiting from both ‘gold like’ positioning and risk on momentum. What’s different this cycle is that the demand is structural, regulated, and sticky,” Adam Guren, founder and CIO at Hunting Hill Global Capital, told Bloomberg.
Impact Shorts
More Shorts‘How far we rally is anyone’s guess’
An analyst suggested that bitcoin could even rise in the coming days even as some other said that the trajectory now depends on how trade talks go on.
“With crypto week on the horizon next week in DC, and a likely flood of positive momentum heading into the dog days of summer, bullish sentiment and thinner trading volumes could see prices gap up to $120,000 or higher by the end of next week. How far we rally through the summer is anyone’s guess, but open call interest outweighs puts, which normally reveals traders are bullish and expect upward price momentum to continue,” Ryan Gorman, chief strategy officer at Uranium Digital, told CNBC.
Whether bitcoin’s rally can continue largely depends on the macroeconomic conditions and any developments on the trade front, Sid Powell, the CEO and co-founder of crypto asset-management firm Maple, told MarketWatch.
Powell further said that trade talks going beyond Trump’s August 1 deadline could add the headwinds facing bitcoin.
However, if trade talks go well, inflation remains low, and the Federal Reserve cuts rates, bitcoin rally could be sustained.
Powell further said that Wednesday rally was in part driven by the risk-on sentiment after minutes from the Federal Reserve’s meeting last month showed that most officials believe some reduction in interest rates would be appropriate this year.
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