Bitcoin Hits $118K as Fed Rate Cut Ignites Crypto Revolution

U.S. crypto stocks surged in the wake of the Federal Reserve’s interest rate cut, as the broader market exhibited optimism amid evolving macroeconomic conditions. The move, described as a “risk management” decision, has stabilized major cryptocurrencies and provided a tailwind for equities tied to the crypto industry. The total crypto market capitalization reached a new all-time high, reflecting growing investor confidence in digital assets.

Bitcoin (BTC) climbed to approximately $118,000, supported by ETF inflows and post-Fed optimism, with analysts forecasting a potential rally to $210,000 by October. Ethereum (ETH) also showed strength, with its price holding above $4,490 and experiencing a 15% increase in long-term holdings, signaling continued institutional interest. Solana (SOL) rose 3.08% to $245, adding to the momentum of alternative cryptocurrencies in the current market environment.

The rally in crypto equities was most notably driven by Bitmine Immersion Technologies (BMNR), which saw its stock surge over 3,000% following a $250 million private placement aimed at building an Ethereum treasury. This move marked a strategic shift for the company from Bitcoin to Ethereum, with the aim of mirroring MicroStrategy’s Bitcoin treasury approach in the ETH space. Bitmine’s revenue for Q1 2025 increased by 135% year-over-year, and its self-mining capacity tripled with the addition of 3,000 new miners. The company has also become one of the largest publicly traded ETH holders, with its treasury now valued at over $2.9 billion.

The broader crypto mining sector has also outperformed traditional assets in 2025, with stocks such as Riot Platforms, Hive Digital, Hut 8, MARA Holdings, and Bitfarms posting double-digit returns. The VanEck Digital Transformation ETF, which tracks cryptocurrency-related companies, gained over 20% year-to-date. This outperformance is attributed to improved macroeconomic data, including the U.S. job market’s better-than-expected performance, which has fostered a risk-on sentiment in equity markets.

Bitcoin’s hashprice—the revenue miners earn per unit of computational power—also rose by nearly 10% to approximately $58 per PH/s/day, indicating stronger mining economics amid rising Bitcoin prices and network efficiency improvements. This trend has bolstered the valuations of mining stocks and highlighted the sector’s potential for continued growth, though analysts caution against over-optimism due to the inherent volatility and speculative nature of the space.

The surge in crypto equities underscores the growing convergence between digital assets and traditional financial markets. The correlation between Bitcoin and the S&P 500 has frequently exceeded 70% in recent years, particularly during periods of macroeconomic uncertainty. This close relationship has made Bitcoin increasingly sensitive to developments in the broader equity market, reinforcing its status as a high-risk, high-reward asset. However, during Bitcoin’s 2019 bull run, it exhibited a sharp negative correlation with equities, demonstrating its potential to move independently when driven by its own supply dynamics and adoption cycles.