Bitcoin surpasses record high of $125,000… "Market expectations spread over Trump's 'Tariff Dividend'"

Bitcoin (BTC) prices surpassed $125,000 amid expectations of a U.S. federal government shutdown and interest-rate cuts, and increased inflows into exchange-traded funds (ETFs).

On the 5th (local time), Forbes reported that Bitcoin exceeded $125,000 per coin and set a new record high. This is interpreted as the result of a rapid influx of buying as expectations for accelerated interest-rate cuts by the U.S. Federal Reserve (Fed), expanded ETF investment on Wall Street, and concerns over a prolonged U.S. government shutdown overlapped.

David Siemer, CEO of Wave Digital Assets, said, "Bitcoin hitting an all-time high is the result of multiple factors acting at the same time," adding, "Institutional inflows via ETFs are reaching record levels, and the Fed's shift toward rate cuts is widening dollar weakness and preference for risk assets." He added, "With macro uncertainty from a government shutdown added on, an environment where prices surge despite limited demand has been created."

Earlier, U.S. President Trump said on the 2nd (local time) that he is considering a 'Tariff Dividend' payment plan similar to the 'COVID-19 stimulus payments' form, providing up to $2,000 per person. He said, "While repaying America's debt is a top priority, we are discussing returning $1,000~$2,000 to the people using tariff revenue." The market expects that if the policy is actually implemented, it could reproduce a Bitcoin and stock market rally similar to the cash payments during the COVID-19 period.

Analysts at crypto exchange Bitfinex also said, "The fact that President Trump is considering subsidies using tariff revenue can act as upward pressure on Bitcoin," diagnosing, "This could reproduce flows similar to the market response after the COVID-19 stimulus payments."

Institutional inflows are also driving this rally. Jake Kennis, a research analyst at Nansen, said, "Bitcoin rose more than 13% last week and is showing a breakout trend," adding, "ETF-driven institutional demand is leading the rise, and if previous highs are broken, retail investor inflows could also get underway in earnest."

The market is evaluating this surge as a 'matured bull market.' Jasper De Maere, a strategist at Wintermute, said, "In 2020, institutional infrastructure was lacking and the surge was led by retail, but now ETFs and custody systems are in place and institutional-centered capital flows have taken root."

The outlet added, "Harvard Kennedy School's 2023 research found that during past stimulus payment periods, individual investors' allocations to Bitcoin and cryptocurrencies increased significantly," adding, "If the Trump administration's policy review materializes, analysts also argue that a similar phenomenon could be reproduced."

Meanwhile, Bitcoin is currently trading in the $125,000 range, continuing a 2.1% rise from the previous day.