Bitcoin rose near US$123,000 during US trading on August 13, approaching its all-time high.

Ether also climbed, reaching US$4,750, about 3% below its 2021 record.

Solana’s SOL advanced over 5% to surpass US$200, while Uniswap’s and Hyperliquid’s native tokens rose 5–6%.

The gains coincided with the S&P 500 and Nasdaq trading close to record levels.

Joel Kruger, strategist at LMAX Group, cited softer inflation signals and speculation of possible US Federal Reserve rate cuts.

Analysts at 10x Research said tightened credit spreads and increasing loan growth are creating favorable conditions for risk assets.

Market forecasts now suggest a strong likelihood of a 25 basis point Fed rate cut in September, with some expecting deeper easing.

🔗 Source: CoinDesk

🧠 Food for thought

1️⃣ Crypto markets are pricing in Fed policy shifts before they happen

Bitcoin’s surge past $122,000 demonstrates how cryptocurrency markets increasingly move ahead of Federal Reserve policy changes rather than just reacting to them.

The current Fed funds rate sits at 4.25%-4.50%, yet market participants now see over 90% probability of a September rate cut 1. This anticipation is already driving capital into crypto, as lower rates historically increase liquidity and push investors toward higher-risk assets like digital currencies 2.

This pattern shows how crypto has evolved from a purely speculative asset to one that responds to macroeconomic expectations. When rates do eventually fall, the additional liquidity typically creates sustained rallies in cryptocurrencies, as investors rotate capital away from traditional yield-bearing investments 3.

The $87.15 billion daily trading volume that accompanied Bitcoin’s recent peak suggests institutional participation rather than just retail speculation, indicating that professional investors are also positioning ahead of expected policy changes 4.

2️⃣ Crypto’s outperformance signals a maturing but still volatile relationship with traditional markets

While Bitcoin climbed 2.5% and ether gained 4.5% in recent trading, the S&P 500 managed only a 0.3% increase, highlighting crypto’s ability to outpace traditional assets during favorable conditions 4.