Bitcoin’s price has extended its recent decline, trading at approximately $118,000 after briefly surpassing Google parent Alphabet’s market capitalization and reaching a record high of $124,283 in early Asian trading. The pullback has been attributed to profit-taking and broader macroeconomic uncertainty, particularly with U.S. inflation data triggering caution among traders. Despite the correction, the cryptocurrency has demonstrated resilience, maintaining support levels above $118,000, which signals growing institutional confidence and market maturity.
The decline comes amid ongoing discussions about the U.S. government’s bitcoin holdings. Treasury Secretary Scott Bessent recently clarified that the U.S. government holds between $15 billion and $20 billion in bitcoin, significantly lower than prior estimates of $23 billion. This revelation, coupled with Bessent’s comments that the Treasury would not purchase additional bitcoin through direct means—opting instead for budget-neutral methods such as the use of confiscated assets—prompted a further sell-off. Bessent also suggested the possibility of a surprise 50 basis-point rate cut by the Federal Reserve in September, a move that historically has supported bitcoin prices during previous cycles.
The U.S. government’s strategic bitcoin reserve, established under President Donald Trump’s executive order, remains a focal point for both institutional and retail investors. However, the administration is reportedly prioritizing the passage of the Genius Act stablecoin bill and a broader crypto market structure bill before committing to any further expansion of the reserve. The uncertainty surrounding the timeline and funding mechanism for the reserve has led to mixed market sentiment, with some analysts warning of potential delays or missteps in the implementation of the policy.
Institutional adoption of bitcoin continues to gain momentum, with over 200 companies now holding the asset as part of their corporate treasuries. U.S.-listed bitcoin ETFs have also seen record inflows, with the total cryptocurrency market capitalization reaching $4 trillion. Norway’s sovereign wealth fund has indirectly increased its bitcoin exposure through investments in companies with significant holdings of the cryptocurrency, further signaling institutional acceptance. Meanwhile, President Trump’s executive order allowing 401(k) retirement accounts to include bitcoin has created a potential influx of $12.5 trillion in retirement savings into the market, which could support long-term demand.
Derivatives markets and options positioning indicate a bearish tilt in the short term, with traders anticipating a potential test of the $111,000 level for bitcoin in August. The probability of a close below that level stands at 34%, according to Polymarket, while the likelihood of a more immediate bounce to $180,000 remains low. The market appears to be in a holding pattern ahead of the Federal Reserve’s Jackson…
Read More: Institutional Confidence Stands Tall as Bitcoin Falters on Macro Woes
