Goldilocks Fuels Risk-On Momentum
Bitcoin recovered from last week's low of $112K back above $120K this morning, driven by two major catalysts: potential Fed leadership changes and President Trump's 401(k) executive order. This rally fits perfectly with current market positioning, where Bitcoin, Gold, and the S&P 500 remain firmly BULLISH while the U.S. Dollar and volatility indices (VIX, CVIX, MOVE) remain BEARISH. Global markets continue pricing in a GOLDILOCKS risk-on regime, creating ideal conditions for Bitcoin and stocks to outperform. Corporate earnings are reinforcing this narrative, with S&P 500 companies delivering 10.5% year-over-year growth (vs. 2.5% expectations), while 81.2% beat estimates entirely. Though economic data has recently softened, this weakness won't appear in earnings until 3Q results in October/November, giving markets runway to stay elevated through the summer.
TLDR: The current risk-on environment and strong earnings momentum provide tailwinds for Bitcoin's short-term positioning.
Fed Shifts To Growth-First Policy
The Federal Reserve appears to be abandoning its backward-looking, data-dependent approach in favor of forward-looking policy that prioritizes growth over inflation control. Bloomberg reports that Christopher Waller leads the race to replace Jerome Powell, bringing a forecasting-driven philosophy that breaks from the current "wait and see" model. Adding to this shift, Stephen Miran's nomination for Fed Governor introduces another growth advocate who argues tariffs aren't inflationary and supports lower rates to stimulate economic activity. This represents a fundamental change toward easier monetary policy and the likely abandonment of the 2% inflation target, creating structural tailwinds for all asset prices. Political pressure to support growth means the Fed will likely err on the side of accommodation rather than restriction. This policy evolution directly supports our Everything Rally thesis, where coordinated fiscal and monetary expansion drives broad-based asset price inflation.
TLDR: A growth-first Fed leadership that tolerates higher inflation is fundamentally bullish for Bitcoin's medium-term outlook.
Retirement Flows Will Support Bitcoin
President Trump's August 7 executive order opens the door for cryptocurrency to enter 401(k) retirement plans for the first time, a potentially transformative development for Bitcoin adoption. The historical precedent is striking: when America shifted from defined-benefit pensions to 401(k) plans in the 1980s, it fundamentally reshaped capital markets by funneling trillions in automatic payroll deductions into the U.S. stock market. This structural change turned every American worker into an involuntary stock market participant, with defined-contribution plans now holding approximately $12 trillion, mostly in passive index funds. The introduction of stocks into retirement accounts didn't just boost equity prices but made stock ownership the default foundation of American financial life. Regulators have 180 days to develop frameworks allowing crypto, private equity, and real estate into retirement accounts. If Bitcoin gains access to this massive flow of automatic investment, it could evolve from speculative asset to foundational household wealth component, just as the S&P 500 became embedded in every worker's retirement planning.
TLDR: Retirement account inclusion could entrench Bitcoin into American households the same way 401(k)s made every worker a stock market investor.
With potential 401(k) flows reshaping Bitcoin adoption and the Fed shifting toward growth-first policy, Bitcoin seems ripe to make new highs. Let’s see the on-chain data:
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