Bitcoin Reaches Historic High of $124,000 as Four Positive Factors Converge

By Francisco Rodrigues (all times Eastern Time unless otherwise specified) The cryptocurrency market is still riding the wave following Tuesday's higher-than-expected core inflation reading, which has increased the likelihood of a Federal Reserve interest rate cut next month, with some traders even anticipating a 50 basis point reduction. This optimism has driven the CoinDesk 20 (CD20) index of the largest cryptocurrencies up over 1% in the last 24 hours. As a result, bitcoin has reached a record high of over $124,000, while ether has risen 2.2% to $4,750, just shy of its all-time high. July's headline inflation data was cooler than expected, but the increase in core inflation has fueled expectations of a rate cut. On Polymarket, traders now see an 80% chance of a 25 basis point cut in September, with the probability of a 50 basis point cut rising to 8.3%. The CME FedWatch tool indicates a 97.8% chance of a 25 basis point cut and a 2.2% chance of a 50 basis point cut. On the geopolitical front, a meeting is scheduled between President Donald Trump and Russian President Vladimir Putin in Alaska this Friday. This meeting comes as the US president increases pressure for a ceasefire in Ukraine, with a potential follow-up meeting with Ukraine's President Volodymyr Zelenskyy. Deescalation measures, including a possible air truce, are currently being discussed. Institutional demand has made this the best week for spot ether ETF net inflows, with $2.27 billion in inflows according to SoSoValue data. Meanwhile, corporate accumulation, led by BitMine, has resulted in ETH treasuries accumulating over 3.5 million ETH. According to analysts at QCP Capital, 'Bitmine's capital raise to build its ETH treasury has drawn attention, with the market noting that any allocation to ETH has a greater impact compared to BTC, given ETH's smaller market capitalization and thinner liquidity.' They expect the current momentum in ETH to continue as long as new flows into ETH DATs persist. Bitcoin treasuries, including ETFs, have increased their holdings by around 3.36% over the past 30 days to 3.64 million BTC, which is more than 17% of the cryptocurrency's total supply. The cryptocurrency market is currently benefiting from four key factors: anticipated rate cuts, a more favorable regulatory environment, easing geopolitical tensions, and rising institutional and corporate interest. Looking ahead, investors will be closely watching today's Producer Price Index (PPI) data for further clues on the Fed's potential actions in September. It's essential to stay alert and monitor market developments. Key Events to Watch Token Events Upcoming Conferences The CoinDesk Policy & Regulation conference is a one-day boutique event taking place in Washington on September 10. This event allows general counsels, compliance officers, and regulatory executives to meet with public officials responsible for crypto legislation and regulatory oversight. Space is limited, and attendees can use the code CDB10 for a 10% discount on registration through August 31. Token Talk By Shaurya Malwa Derivatives Positioning Market Movements Bitcoin Statistics Technical Analysis Crypto Equities ETF Flows Spot BTC ETFs Spot ETH ETFs Source: Farside Investors Chart of the Day While You Were Sleeping In the Ether