Bitcoin tops $120,000 on investor bets on Fed rate cuts, Trump support for

Bitcoin (BTC-USD) surged on Monday to trade near record highs as investor enthusiasm and momentum around crypto grew amid Trump’s recent Fed nomination and executive order allowing crypto investment in 401(k) retirement plans.

The digital token reached $122,000 on Monday before easing to around $120,000. The gains come as inflows into exchange-traded funds (ETFs) have grown and public companies have been adding bitcoin to their balance sheets.

Bitcoin wasn’t the only cryptocurrency getting a bid. Ethereum (ETH-USD) touched 2021 levels on Monday, as the second-largest cryptocurrency by market cap has surged roughly 190% since the April market lows.

Companies have been adding ethereum to their balance sheets as a way to gain exposure to the tech infrastructure behind decentralized finance and digital assets, such as stablecoins.

The move higher in crypto also comes as stocks hover near record highs on expectations that the Federal Reserve will cut rates in September and that President Trump’s next Fed chair pick will likely bring looser monetary policy.

“If the Fed is cutting into an economy that is still growing, with unemployment in check and inflation elevated, that is a macro cocktail that should favor allocation to crypto,” Sean Farrell, head of digital asset strategy at Fundstrat, wrote on Friday.

Farrell also noted that Trump’s nomination of Stephen Miran to serve on the Federal Reserve’s Board of Governors is also bullish for crypto assets, given that he has called for weaker dollar policy in the past, which typically drives up asset prices.

At the same time, regulatory tailwinds have also pushed the price of bitcoin higher.

Last week Trump issued an executive order asking the Labor Department to look into allowing 401(k) plans to hold cryptocurrencies, among other alternative assets. The move would open the door for more investors to get involved in crypto.

Even Trump’s son Eric Trump has noted crypto’s surge, writing recently, “Stop betting against BTC and ETH — you will be run over.”

Strategists note the administration’s crypto push is a major tailwind for the industry.

“The administration is pushing crypto. They are pushing bitcoin. Bitcoin is the lead dog in the crypto market,” Tom Essaye, founder of Sevens Report Research, told Yahoo Finance on Monday morning.