Bitcoin Rally May See Big August Tailwind, Set Record Highs — Barrons.com

Martin Baccardax

Bitcoin prices are powering higher again Monday, taking the world's biggest digital currency closer to the record set last month. Investors are also eyeing key regulatory changes and a benchmark initial public offering later in the week that could extend Bitcoin's extraordinary eight-month rally.

Bitcoin topped the $120,000 mark in early Monday trading, extending its August gain to around 3%, following last week's move by President Donald Trump to order Labor Department officials to consider expanding access to alternative assets in retirement accounts.

The president's executive order, which also includes examining the inclusion of private equity in 401(k) saving plans, is expected to power digital-asset prices higher if ultimately approved by regulators.

"It is another bullish driver for the crypto market as the relatively small market capitalization means fund flows can have a significant impact on price," Katalin Tischhauser, head of research at Zurich-based Sygnum Bank, wrote in an email to Barron's.

"Other than the executive order itself, endorsements from opinion leaders such as Larry Fink support the positive outlook," she added. "The BlackRock CEO had suggested that portfolios should hold 50% stocks, 30% bonds and 20% private assets."

CoinShares, an investment firm based in the English Channel island of Jersey focused on digital assets, said the order sparked a net $572 million in cryptocurrency inflows. Around $260 million of that, CoinShares disclosed, was targeted toward Bitcoin purchases. That snapped two consecutive weeks of net outflows.

Investors are also eyeing what could be a $1 billion IPO for Bullish, the owner of news site CoinDesk and the Bullish Exchange digital asset trading platform.

Revised data filed with the Securities and Exchange Commission suggests the Cayman Islands-based group would raise $990 million from the offering, giving it a market value of around $4.8 billion.

Shares in the group are expected to make their New York Stock Exchange trading debut on Aug. 13, and list under the ticker symbol BLSH.

Bitcoin's August gain is well ahead of the historic average of around 0.8% for that month, according to Dow Jones Market Data and figures from CoinDesk.

Bitcoin prices are also up around 30% so far this year, a stark contrast to the 9.2% decline for the U.S. dollar index, which tracks the greenback against a basket of six global currencies.

The world's biggest digital currency has risen more than fivefold since August 2022 and now has a total market value of $2.4 trillion, according to CoinMarketCap.

"After such a large rally, it wouldn't be a bad thing to see some profit-taking and consolidation — particularly in the smaller cryptocurrencies," said Brent Kenwell, U.S. investment analyst at eToro, in a recent client note.

"But overall, the trend remains quite strong, so long as the longer-term trend remains intact, Bitcoin can continue to led the way higher in the second half of 2025 and into 2026," he added. "That's especially true if institutional demand remains strong and if regulatory burdens continue to ease."

Bitcoin's August momentum could be tested, however, by Tuesday's July CPI inflation report, which is expected to show price pressures increased to an annual rate of 3% at the start of the first quarter.

That might not be fast enough to alter bets on a near-term Federal Reserve rate cut, however, as traders see weakness in the labor market that could compel the Fed to lower borrowing costs for the first time since late December.

Bitcoin, which pays no interest, tends to move higher as short-term interest rates decline. It also tends to increase if investors feel inflation pressures are going unchecked, debasing the value of fiat currencies such as the dollar.

At present, rate traders peg the odds of a quarter-point reduction in the Fed's benchmark lending rate at 86.5%, up from just 57.4% a month ago.

Bitcoin prices have gained around 3% over the same period, and were last marked 0.7% higher on the Monday session at $120,065.20 each.

"Should Bitcoin take out its current high, some technical investors may be looking for a further move to the $130K to $134K area," eToro's Kenwell wrote.

"Conversely, these traders are hoping to see support come into play at the prior breakout area, near $110K to $112K," he added. "As long as Bitcoin stays above that zone, the ball can stay in the bulls' court."

Write to Martin Baccardax at martin.baccardax@barrons.com

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