Bitcoin Surges 3% to $120,000 on U.S. Policy Shift

On Monday, Bitcoin's price surged past the $120,000 mark, nearing its historical high set last month. Investors are closely monitoring potential changes in U.S. regulatory policies and a significant IPO in the digital asset sector scheduled for this week, both of which could further fuel Bitcoin's eight-month bull run.

During early trading on Monday, Bitcoin breached the $120,000 threshold, marking a cumulative increase of approximately 3% since August. This upward trend follows last week's positive sentiment, driven by the U.S. President's directive to the Department of Labor to consider expanding the investment scope of retirement accounts to include alternative assets, such as cryptocurrencies. This executive order also explores the possibility of allowing 401(k) plans to invest in private equity. If approved, this move is expected to boost digital asset prices further.

The executive order has been met with enthusiasm from market leaders, including the CEO of BlackRock, who suggested a portfolio allocation of 50% stocks, 30% bonds, and 20% private assets. This endorsement, along with the executive order, has reinforced positive market expectations. The order has also triggered a net inflow of $572 million into cryptocurrencies, with Bitcoin accounting for approximately $260 million of this amount, reversing two consecutive weeks of net outflows.

Investors are also focusing on the upcoming IPO of the digital asset trading platform Bullish. According to recent filings with the U.S. Securities and Exchange Commission, Bullish aims to raise $990 million through its IPO, valuing the company at around $48 billion. The IPO is expected to list on the New York Stock Exchange on August 13th under the ticker symbol BLSH.

Historically, Bitcoin's average August performance is modest, with gains of around 0.8%. However, this year's August performance has significantly outperformed this average. Year-to-date, Bitcoin has surged by approximately 30%, while the U.S. dollar index has declined by 9.2%. Since August 2022, Bitcoin's price has increased more than fivefold, reaching a total market capitalization of $2.4 trillion.

Analysts suggest that after such a significant rally, some profit-taking and consolidation would be beneficial, especially for smaller-cap cryptocurrencies. However, the overall trend remains robust. As long as the long-term trend holds, Bitcoin is poised to continue leading the market into the second half of 2025 and into 2026.

Market attention will also be on the U.S. July Consumer Price Index (CPI) data, set to be released on Tuesday. Market forecasts predict an annual inflation rate of 3%. Despite potential inflation increases, a weak job market has led traders to bet on an imminent rate cut by the Federal Reserve. The probability of a 25 basis point rate cut in September has risen to 86.5%, up from 57.4% a month ago.

Bitcoin typically strengthens during periods of short-term rate cuts and concerns over fiat currency devaluation. As of Monday's midday trading, Bitcoin was at $120,065.20, up 0.7% for the day. If Bitcoin breaks its previous high, technical analysts may see potential targets between $130,000 and $134,000. Conversely, if the price corrects, the previous breakout zone between $110,000 and $112,000 could serve as crucial support.