Bitcoin Surges 1.9% to Record High as Tech Stocks Rally

On Wednesday afternoon, a robust rebound in technology stocks, led by NVIDIA, propelled Bitcoin's price to new heights, setting a historic record. According to Coin Metrics, Bitcoin's price briefly reached 112,052.24 USD, surpassing its previous high of 111,999 USD, with a 1.9% increase, and closed at approximately 110,947.49 USD. This surge in Bitcoin's value is attributed to the broader tech rally, which has been driving up the prices of risk assets. The strong performance of technology stocks, particularly NVIDIA, has created a favorable environment for Bitcoin, as investors seek higher returns in riskier assets.

Despite Bitcoin's overall stability in recent weeks, with ETF inflows remaining strong, the driving force appears limited. In the second quarter, the amount of Bitcoin purchased by listed companies exceeded the net inflows of Bitcoin ETFs. However, over the past month, Bitcoin's cumulative gain has been only around 2%.

On Wednesday, the technology sector saw significant gains, with NVIDIA briefly becoming the first company to surpass a market capitalization of 4 trillion USD. This boosted the Nasdaq Composite Index to a new closing high, as technology stocks, which have a significant weighting in the index, performed strongly. Meanwhile, investors seemed unfazed by the latest round of tariff measures announced by the Trump administration, shifting market sentiment towards optimism.

As a risk asset, Bitcoin is sometimes viewed as "digital gold" by some institutions, but its price remains closely tied to overall market sentiment. When risk appetite increases and investors allocate more funds to growth assets, cryptocurrencies typically rise in tandem.

Investors widely anticipate that by the second half of 2024, as more enterprises incorporate Bitcoin into their financial reserves and the U.S. Congress moves closer to passing cryptocurrency regulatory legislation, Bitcoin will continue to set new highs. The upcoming "Cryptocurrency Week" in Washington, along with the typically bullish summer market sentiment, is expected to drive Bitcoin's price even higher. The positive outlook for Bitcoin is also bolstered by the growing institutional interest in cryptocurrencies, as more companies and investors seek to diversify their portfolios with digital assets.

The chief strategic officer of Uranium Digital expressed optimism, stating that Bitcoin's price could surge past 120,000 USD by the end of next week. This prediction is supported by the current market sentiment, which favors bullish positions, as evidenced by the higher volume of call options compared to put options. This trend suggests that traders are optimistic about the continued upward momentum in Bitcoin's price.