Bitcoin has surged this week, reaching a new all-time high of nearly $119,000 per bitcoin. This surge has lifted other major cryptocurrencies, including Ripple’s XRP and ethereum, pushing the combined market capitalization towards $4 trillion. The crypto market, which is still dominated by bitcoin, has added $1.2 trillion since its April lows and is now just $250 billion away from reaching $4 trillion. Ethereum has seen a nearly 20% increase over the last week, while XRP has surged almost 30%.
U.S. President Donald Trump has contributed to the crypto market’s rise by warning the Federal Reserve to “rapidly” lower interest rates. Trump posted on his Truth Social account that the country is “now back” and that there is “no inflation,” suggesting that the Federal Reserve should act accordingly. Last month, Trump had posted that the Federal Reserve board should “activate,” urging Fed chair Jerome Powell to cut rates by “at least two to three points” to save the U.S. more than $800 billion per year on servicing the U.S. debt pile. Powell, who Trump has threatened to fire, kept interest rates on hold again last month after initiating a reduction cycle in September, which has been paused due to fears of a return of inflation from Trump’s global trade tariffs.
The market is overwhelmingly expecting the Fed to leave interest rates on hold at its July meeting, though traders are now betting on a September cut. The signals of forthcoming Fed rate cuts have buoyed investor sentiment, as a cut is now more likely than ever and greatly needed. The crypto market’s upward movement has also been aided by the gradual build-up of pressure from bitcoin exchange-traded funds (ETFs) and bitcoin treasury companies, which have been purchasing large amounts of bitcoin and inspiring similar supply pressure by buying ethereum, XRP, and others. In bitcoin’s case, the rally is being driven not only by expectations of Fed rate cuts but also by continued inflows into U.S. spot ETFs, corporate treasury buying, and a weaker U.S. dollar.
The price surge seen this week is seemingly driven by a confluence of macroeconomic optimism and significant institutional activity in the form of ETF inflows and sovereign and corporate balance sheet allocations. The crypto market’s rise has been further fueled by Trump’s warnings to the Federal Reserve, which have spurred investor sentiment and contributed to the overall surge in cryptocurrency prices. The market is now just $250 billion away from reaching a combined market capitalization of $4 trillion, with ethereum and XRP making significant gains. The crypto market’s upward trajectory is expected to continue as institutional activity and macroeconomic factors drive further price increases.
