Bitcoin soars past 123,500, setting a new historical high! The resonance with U.S. stocks highlights a warming risk appetite
The price of Bitcoin broke through $123,500 on Wednesday, setting a new historical high, in sync with the rise of U.S. stocks, indicating an increase in global investors' risk appetite. The S&P 500 index also closed at a historical high for two consecutive days, reflecting the market's optimistic sentiment. Analysts point out that cryptocurrencies are positively correlated with the stock market, especially Ethereum, which has a stronger correlation with the stock market. The market's expectations for a rate cut by the Federal Reserve have increased, driving funds towards more volatile digital assets
According to Zhitong Finance APP, on Wednesday, the price of Bitcoin reached a historic high, in line with the rise of U.S. stocks. Global investors are further stepping into the realm of risk appetite. On Wednesday evening Eastern Time, the price of Bitcoin broke through $123,500, surpassing the previous historical peak of $123,200 set on July 14. Shortly before this, the S&P 500 index closed at a historical high for the second consecutive trading day, continuing the summer rally, with the benchmark index repeatedly setting records.
For most of the past year, the price of Bitcoin has steadily risen, thanks to the friendly legislative environment formed in the U.S. after President Donald Trump took office. Publicly traded companies represented by Michael Saylor's Strategy (MSTR.US) have driven up demand through an increasingly popular corporate strategy of hoarding this native cryptocurrency. This strategy has recently spread to smaller competing coins like Ethereum, driving a general rise in the digital asset market.
This coordinated movement highlights that the speculative market sector and mainstream benchmark indices are sharing the same optimistic sentiment. The U.S. inflation data released this week met expectations, reinforcing market bets that the Federal Reserve will cut interest rates in September, which will ease financial environment pressures and prompt funds to flow from blue-chip stocks to more volatile digital tokens.
Chris Newhouse, research director at Ergonia, stated, "Cryptocurrencies have a positive correlation with stocks, with Ethereum having a stronger correlation with the stock market than Bitcoin. Overall market sentiment is positive."
The rise of Ethereum is benefiting from sustained demand from newly active treasury management companies, while Bitcoin's steady climb relies on continuous capital inflows into exchange-traded funds (ETFs), despite facing technical resistance.
"Slowing inflation, rising expectations for interest rate cuts, and unprecedented institutional participation through ETFs are all contributing to strong bullish factors," said Ben Kulander, CEO of the cryptocurrency research platform DYOR. "What distinguishes this rally is the maturity of the demand base; this surge is not just retail frenzy but also structural buying from asset management companies, corporations, and sovereign funds."
