Bitcoin reaches an all-time high, surpassing $118,000

Bitcoin has reached an all-time high, surpassing $118,000 as a flood of money moves into spot bitcoin ETFs, which have opened up cryptocurrency investing to millions.

A soft US dollar and the digital currency friendliness of President Donald Trump's administration has also helped to push the price of bitcoin to unprecedented levels recently.

Last month the Senate passed legislation that would regulate a form of cryptocurrency known as stablecoins, the first of what the industry hopes will be a wave of bills to bolster its legitimacy and reassure consumers.

The fast-moving legislation comes on the heels of a 2024 campaign cycle in which the crypto industry ranked among the top political spenders in the country, underscoring its growing influence in Washington and beyond.

Known as the GENIUS Act, the bill would establish guardrails and consumer protections for stablecoins, a type of cryptocurrency typically pegged to the US dollar. The acronym stands for "Guiding and Establishing National Innovation for US Stablecoins.” Next week the House of Representatives will be considering the GENIUS Act as part of Congress’ efforts to strengthen the country's crypto position.

US-listed crypto stocks jumped on Friday as bitcoin surged to a record high in the run-up to a landmark week that could cement policy wins for the crypto industry.

Starting July 14, the House of Representatives will debate three major crypto bills that are likely to provide the industry the regulatory framework in the US that it has long demanded.

The lawmakers will discuss the Genius Act, the Clarity Act and the Anti-CBDC Surveillance State Act during the "Crypto Week", amid growing bets that the industry's strained ties with Washington is beginning to thaw.

This is a sharp reversal of fortune for a sector that had once threatened to flee offshore, citing a hostile environment and heavy-handed enforcement in the US "We expect capital that was previously sidelined due to regulatory uncertainty to re-enter," said Jag Kooner, head of derivatives at crypto exchange Bitfinex. "Even if final passage stalls, the optics of legislative engagement are bullish." Regulatory clarity could encourage more companies to adopt bitcoin in their treasury strategies, analysts said, similar to firms such as Strategy, which has accumulated the cryptocurrency as a long-term store of value.

"We're seeing bitcoin treasury strategies proliferate across companies, which reflects growing institutional confidence in BTC as a balance-sheet asset," said Nicolai Sondergaard, research analyst at Nansen.

Bitcoin's surge has triggered a broader rally in the crypto market, with strong and sustained inflows into the related spot exchange-traded funds driving prices higher, he said.

The world's largest cryptocurrency was last up 4% at $118,071.19, taking its gains for the year to 26%. The digital asset has surged nearly 41% in the last three months.

Bitcoin buyer and holder Strategy rose 3.8%, while crypto miners Riot Platforms, Hut 8 and Mara Holdings gained between 1.5% and 3%.

"Investors are racing to take positions ahead of the extra publicity this event could attract," said Dan Coatsworth, investment analyst at AJ Bell, referring to the Crypto Week.

Rising confidence in bitcoin is now resulting in investors chasing higher returns in smaller tokens. Ether, the second-largest token, was last up 6.5%, while XRP and Solana gained 12% and 2%, respectively.

The sector's total market value has swelled to about $3.7 trillion, according to data from CoinMarketCap.

Bitcoin's sharp rally has also drawn caution from some corners of the market.

As crypto gets embedded in the traditional financial system, some analysts warned the hype may be outpacing reality, as it starts to displace gold as the preferred hedge against equities.

"The (regulatory) backdrop has supported prices and attention has turned to bitcoin's role in portfolios, with some likening the crypto-asset to 'digital gold'. This moniker is likely premature," said Dirk Willer, Citi's global head of macro, asset allocation and emerging market strategy.

With likely volatility ahead, some analysts have cautioned investors to pause and weigh their time horizons before jumping in.

"It's hard not to be optimistic about bitcoin at this moment in time, but the risk of a fall in price or short-term pullback still exists," said Simon Peters, crypto analyst at online brokerage eToro.

Critics have argued the Trump administration is conceding too much to the crypto industry.

"I'm concerned that what my Republican colleagues are aiming for is another industry handout that gives the crypto lobby exactly its wish list," Democratic Senator Elizabeth Warren said earlier this week.

She urged Congress to bar public officials, including the President, from issuing, backing or profiting from crypto tokens.

Trump has faced criticism from political rivals and ethics experts over potential for conflicts of interest regarding his family's crypto ventures.

Reuters