Bitcoin's record run isn't over - new US rules could spark next big crypto wave

12/08/2025 05:14 AST

Bitcoin is edging closer to a fresh all-time high, buoyed by policy changes in the United States that could channel billions into the cryptocurrency market.

The crypto market cap has hit $4 trillion for the second time in a month as Bitcoin, Ethereum surge. The world's largest digital asset climbed to $120,252 on Monday, within 3% of its July 14 peak of $123,000, extending year-to-date gains to almost 30%.

The weekend rally also propelled Ether to $4,181 - its highest since December 2021 - after briefly surpassing $4,000 on Friday for the first time in over a year.

Ether remains 14% below its November 2021 record but has benefited from strong inflows into exchange-traded funds, which last week outpaced those of Bitcoin.

Momentum in both tokens comes as the White House moves to expand access to alternative assets, including crypto, in 401(k) retirement plans - a $12.5 trillion market serving 90 million Americans. The executive order allows investments in digital assets, private equity, and other alternatives, potentially creating a fresh source of demand.

While the policy shift could boost exposure, it also raises concerns over fees, liquidity, and risk in portfolios traditionally built around transparent, easily traded assets like stocks and bonds. Alternative investments often carry higher costs and limited disclosures compared to mutual funds, meaning investor education will be critical.

What elses drives sentiment?
Market sentiment has also been lifted by expectations of further gains. Technical indicators suggest the next resistance level for Bitcoin is near $133,000, while macroeconomic factors - such as U.S. debt expansion and persistent inflation - are driving some investors toward perceived "hard assets" like Bitcoin and gold.

For UAE-based investors, the rally underscores the importance of understanding both the opportunities and risks in crypto markets.

The UAE has positioned itself as a global hub for digital assets, with regulated trading venues in Dubai and Abu Dhabi offering access to Bitcoin, Ether, and a range of other tokens.

However, price volatility remains high, and investment horizons matter: younger, long-term investors may tolerate swings better than those nearing retirement.

With Bitcoin just shy of a record and Ether regaining momentum, the second half of 2025 could see further highs - but also renewed volatility. Whether these policy-driven gains prove sustainable will depend on regulatory clarity, market adoption, and the broader economic backdrop.

Gulfnews