Bitcoin Faces Perfect Storm After Surging Past $125,000
The bitcoin price, which has doubled over the last 12 months, is contending with gold for the title of the best performing asset of 2025, as a Federal Reserve bitcoin and gold game-changer is anticipated to impact markets significantly. As Jamie Dimon delivers a serious warning, U.S. president Donald Trump has proposed a $2,000 Covid stimulus check-style tariff dividend. This move could potentially lead to a surge in bitcoin prices, as well as in the crypto and stock markets, while simultaneously heightening concerns about a possible collapse of the U.S. dollar. “We suspect that Trump’s announcement of potentially considering a stimulus check for every citizen, funded by tariffs, could also contribute to a further rise in bitcoin’s price,” analysts stated. “This could reflect what we observed after the Covid stimulus checks.”
The bitcoin price has surged past $125,000 per bitcoin, climbing as traders bet on a “perfect storm” of factors from the Federal Reserve accelerating its interest rate cutting cycle, the U.S. government shutdown, and continued embrace from Wall Street via the wildly popular bitcoin and crypto exchange-traded funds. “Bitcoin hitting new all-time highs today reflects a perfect storm of factors driving demand higher,” said David Siemer. “ETF inflows continue to be a significant catalyst, attracting new institutional capital at an extraordinary rate.” Simultaneously, the Fed’s shift towards rate cuts has led to a depreciation of the dollar and an increase in risk appetite overall, with cryptocurrencies experiencing a notable advantage. Add to the macro uncertainty surrounding the U.S. government shutdown, and you have an environment where even modest demand generates significant fluctuations. While many in the bitcoin and crypto community maintain a strong sense of optimism, there are those who believe this recent rally may not last long. “We have seen gold rally over the past months, supported by buying from nation-states and institutions,” Alex Blume stated. “Bitcoin has historically followed a pattern a few months afterwards.” This recent movement in bitcoin aligns perfectly with the timing at hand. In the bitcoin ecosystem, numerous investors recognize that Q4 is generally the quarter that yields the highest returns for the asset. This expectation alone has the potential to fuel speculation and elevate the price.
In accordance with this, we have observed perpetual futures fund rates rise to as high as 13% following an extended duration of breakeven costs. This indicates that leveraged trading, rather than spot demand, is at least partly responsible for this movement. “In other words, this is a fragile rally that might not endure.” Following the bitcoin price rally during the Covid-era of 2020-21, the bitcoin and crypto market has evolved significantly, aided by the introduction of stock market exchange-traded funds and enhanced regulatory clarity, which have contributed to the technology’s increased accessibility. “In 2020, crypto’s institutional rails were barely in place: No spot ETFs, fragmented custody, regulatory ambiguity,” Jasper De Maere wrote in a September note, adding that “retail-led rallies fueled by stimulus checks and [ultra high-net worth individual] cash … allowed rapid cascades” to hit the bitcoin price and wider crypto market. In a recent study, it was revealed that stimulus payments have led to an increase in bitcoin and cryptocurrency investments. The surge in bitcoin prices this week may further pique interest among investors. “Bitcoin has surged more than 13% in the past week, showing strong momentum with steady higher highs and limited pullbacks,” Jake Kennis stated, highlighting that this momentum is being driven by institutional demand through bitcoin ETFs.
“Prices are now approaching a new all-time high, which could trigger renewed institutional flows and retail interest.” The conditions appear favorable for a new bitcoin all-time high; however, confirmation hinges on maintaining volume and demonstrating follow-through above the previous all-time high to prevent a false breakout. This week, Trump stated that he is considering the possibility of distributing checks of up to $2,000 in rebates sourced from the revenues generated by his tariff agenda. “We’re thinking maybe $1,000 to $2,000, it would be great,” Trump told, adding his “number one” priority is “paying down debt, because people have allowed the debt to go crazy.”
