Trump supports, "Coin-stock convergence" promotes Bitcoin to reach a historical high

Bitcoin reached a new all-time high on Wednesday, moving in tandem with U.S. stocks, reflecting the continued warming of global market risk appetite. Analysts say this highlights the deep linkage between cryptocurrencies and the stock market, driven by the dual forces of a friendly policy environment under the Trump administration and significant institutional capital inflow.

On August 13, the cryptocurrency market witnessed a significant moment as Bitcoin's price broke through $123,500, surpassing the previous all-time high of $123,205.12 set on July 14. This breakthrough almost coincided with the S&P 500 index closing at a historical high for the second consecutive trading day.

Analysts point out that the friendly policy environment created by the Trump administration, combined with the influx of institutional capital, has strongly propelled Bitcoin's rise. The shift in expectations regarding Federal Reserve policy provides a macro backdrop for this "convergence of coins and stocks." Ben Kurland, CEO of the cryptocurrency research platform DYOR, stated:

"Slowing inflation, increased expectations for interest rate cuts, and unprecedented institutional participation brought by ETFs have collectively created strong momentum. What’s different this time is that the demand base is more mature—this rally is not just driven by retail frenzy, but also by structural buying from asset management firms, corporations, and sovereign funds."

Policy Dividend Releases Demand Potential

Since President Trump took office, Washington's friendly legislative environment towards cryptocurrencies has laid the foundation for Bitcoin's steady rise over the past year. Policy support has eliminated regulatory uncertainty, clearing obstacles for institutional investors to allocate digital assets on a large scale.

Led by Michael Saylor's MicroStrategy, an increasing number of publicly traded companies are adopting a strategy of accumulating Bitcoin, significantly boosting market demand. This practice has recently extended to cryptocurrencies like Ethereum, driving up the entire digital asset sector.

Unlike previous bull cycles dominated by retail investors, this round of Bitcoin's bull market exhibits clear institutional characteristics. The continuous inflow of exchange-traded funds (ETFs) provides stable funding support for Bitcoin, maintaining a relatively smooth upward trend even in the face of technical resistance.

The rise of Ethereum is primarily driven by sustained demand from newly active corporate funds, indicating a trend towards diversification in institutional investment strategies.

"Convergence of Coins and Stocks" Highlights Market Risk Appetite

U.S. inflation data this week met expectations, reinforcing market bets on a rate cut by the Federal Reserve in September. Expectations of a loose financial environment are driving funds from blue-chip stocks to more volatile digital tokens, providing macro support for the "convergence of coins and stocks."

According to a previous article by Jianwen, the mild CPI inflation report in the U.S. has alleviated investors' concerns about stagflation, paving the way for the Federal Reserve to cut rates. Global investors are aggressively buying the riskiest assets: from tech giants to small-cap stocks, from emerging markets to cryptocurrencies, almost all categories of risk assets are showing strong upward trends Analysis suggests that the high correlation between cryptocurrencies and traditional stock markets has become a significant feature of this round of increases. The speculative market sector and mainstream benchmark indices draw power from the same source of optimism, reflecting a general increase in current market risk appetite.

Chris Newhouse, Research Director at Ergonia, pointed out:

"Cryptocurrencies show a positive correlation with stocks, and Ethereum has a stronger correlation with the stock market than Bitcoin. Overall sentiment appears to be positive."

This linkage effect indicates that digital assets are gradually integrating into the risk pricing system of traditional financial markets, with institutional investors viewing cryptocurrencies as an important component of risk asset portfolios in their allocation strategies