Will Bitcoin rally continue?

Representations of cryptocurrency bitcoin are seen in this illustration picture created in Paris, France, March 9, 2024. Reuters-Yonhap

Bitcoin has surged to a record high above $110,000 (151 million won), propelled by financial market and macroeconomic uncertainties in the U.S., the dollar's weakness and crypto-friendly legislative moves under the Donald Trump administration, market analysts said Thursday.

Some say the digital coins can soar further to $125,000 in the near term and even higher, to $180,000, by the end of this year.

The recent spike also led to an inflow of $667 million into global spot Bitcoin exchange-traded funds (ETFs) on Monday, the highest daily figure this month.

The optimism is bolstered by the U.S. Senate passing a Stablecoin Act governing stablecoins, including issuance and collateral requirements, as well as anti-money laundering protocols.

Also driving the momentum is the U.S. state of Texas moving to legally classify Bitcoin as a strategic reserve asset, and JPMorgan Chase, a global investment bank, beginning to allow clients to purchase Bitcoin.

“Investors are likely to remain bullish, ensured by regulatory clarity," said Kim Kab-lae, senior research fellow at Korea Capital Market Institute and head of the Financial Law Research Center.

Kim views the Senate's passage of the landmark law as a sign that U.S. regulators are embracing cryptocurrencies as part of the financial system.

"This trend will be strengthened, as illustrated by global financial investment powerhouses, including BlackRock, rushing to advance their tokenization of assets," he said.

Meanwhile, the recent surge in the digital coin is explained in part by uncertainty in the U.S. financial market, according to Kim.

Over the past few days, U.S. Treasury yields have surged, pushing the equity market to decline sharply.

On Wednesday (local time), the 30-year U.S. Treasury bond yields surged close to 5.1 percent, an 18-month high. Shorter-duration 10-year Treasury bond yields soared to 4.6 percent.

The rises led to a sell-off in U.S. equities.

The S&P 500 and Dow Jones Industrial Average slid 1.6 percent and 1.9 percent, respectively. The Nasdaq Composite also declined 1.4 percent.

These reflected growing investor fear of a dampened outlook for the U.S. economy and its fiscal policy.

Many remained concerned over the Trump administration’s tax cut proposals sending the country’s debt soaring, amid trade and tariff uncertainties.

Also at play was a recent U.S. credit rating downgrade by Moody's, and longer-than-expected high interest rates due to sticky inflation.

According to financial market data, Bitcoin reached an all-time high of $111,691, as of 4 a.m. Thursday, surpassing the $110,000 mark for the first time. The digital coin has gained over 25 percent in value over the past month.

This is a dramatic rebound from around $76,000 last month amid global trade tensions and Trump tariff shocks.

Analysts from VanEck, a New York-based global investment management firm, project that Bitcoin could reach $180,000 by late 2025.

Similarly, InvestingHaven, a U.S.-based commodities and crypto analysis firm, said the figure could reach $125,000 in the near term.