Bitcoin News Today: Crypto Rally Gains Momentum as 401(k) Reform Unlocks $8.7 Trillion

Late July and early August 2025 saw a notable rebound in major cryptocurrency prices, with Bitcoin, Ethereum, Solana, Dogecoin, and XRP leading the resurgence [1]. Bitcoin briefly rose above $116,000 amid a weakening U.S. Dollar Index and lower 10-year Treasury yields, signaling improved sentiment in global risk markets [1]. Ethereum outperformed Bitcoin during the same period, surging more than 6% to hit $3,852, indicating strong demand for Ethereum-based assets [1]. Smaller altcoins also experienced gains, with XRP rising over 4% to $3.07, Solana climbing nearly 5% to $172.20, and Dogecoin surging 7.53% to $0.2142 [1].

The move was largely driven by a major regulatory shift. U.S. President Donald Trump was reported to sign an executive order allowing 401(k) retirement plans to include cryptocurrencies, alongside private equity and real estate [1]. This marked a reversal from the Biden administration's 2022 guidance, which had cited volatility, fraud, and regulatory uncertainty as reasons to exclude crypto from retirement plans [1]. The new directive is expected to unlock nearly $8.7 trillion in 401(k) assets for alternative investments [1]. BlackRock and other major asset managers have already signaled openness to including Bitcoin and other digital assets in their fiduciary offerings [1]. The change was made possible in May 2025 when the U.S. Labor Department removed the previous restrictions [1].

Market mechanics also played a role in the recovery. According to CoinGlass data, over $120 million in short positions were liquidated within an hour, with more than 92,000 traders affected in a 24-hour period [1]. Total liquidations across the market reached $270 million, with nearly $217 million in short positions and $55 million in longs wiped out [1]. Ethereum and Solana-based tokens were among the most liquidated, with the largest single liquidation being a $34.28 million ETH short on HTX [1]. The liquidation of large short positions triggered a broader market rebound, reinforcing buying momentum across the sector [1].

Derivatives data further reflected bullish sentiment. Bitcoin futures open interest rose 6% to $188.54 billion, while options open interest surged 86% to $62.32 billion [1]. Analyst Michael van de Poppe noted that the price movement in Bitcoin was a catalyst for other crypto assets to follow, reinforcing a broad-based market turnaround [1]. The CME FedWatch tool also indicated a more than 91% probability of a 25 basis point rate cut in September, contributing to positive risk-on sentiment [1].

On-chain metrics provided additional insight into investor behavior. Ethereum's realized capitalization continued to show resilience compared to Bitcoin and Solana, whose inflows appeared to be slowing [10]. Large Bitcoin transactions increased by 3.6% in a single day, contrasting with a 6.5% drop in large Ethereum transactions, which could suggest a shift in capital allocation [2]. Both retail and institutional investors were seen accumulating Bitcoin, with holders below 1 BTC and above 10,000 BTC showing net buying activity [10].

The overall market sentiment turned more optimistic, as shown by the Crypto Fear & Greed Index reaching 62, indicating a shift toward "greed" [6]. On-chain accumulation trends and derivatives data suggest that traders are preparing for a potential longer-term bull phase, despite ongoing volatility and regulatory uncertainties.

Source:

[1] https://www.thecoinrepublic.com/2025/08/07/bitcoin-eth-doge-sol-xrp-lead-crypto-prices-rebound-heres-why/

[2] https://www.benzinga.com/crypto/cryptocurrency/25/08/46980071/bitcoin-reclaims-117000-as-ethereum-xrp-dogecoin-rise

[10] https://bitcoinist.com/bitcoin-solana-realized-cap-growth-slows-ethereum/

[6] https://www.binance.com/en/square/post/27987502491362