Markets jumped on expectations that the Federal Reserve will soon lower interest rates, pushing Bitcoin through round-number price barriers and reopening debates about borrowed money in stocks. The shift spans hedge funds, futures traders, and bank and custody compliance teams as cheaper cash steers flows toward crypto while record stock market loans raise alarms.
The daybook frames the move as a balance between rising crypto appetite and mounting concerns over leverage, with operational and regulatory scrutiny intensifying alongside price gains.
Bitcoin cleared levels once seen as ceilings—first $115,000 and later $124,002.49—on wagers that the Fed will cut. Futures bets now top $32 billion in open interest, a clear sign that more players are using borrowed money. Even old-school research shops joined in: Citi told clients Bitcoin might reach $181,000 by 2026.
The narrative rests on softer inflation data: U.S. consumer prices eased to 2.9 % year-over-year and producer prices echoed the slowdown, reinforcing expectations of easier money. Altcoins joined the ride—Solana outpaced the field, while Ether, XRP and Dogecoin drew rotating cash. Talk of a Dogecoin ETF adds to the roster of products aimed at both small and large buyers, and Mantle is another token cited as a leader.
Bitcoin surge, altcoin rotation, and leverage buildup
Wall Street voices warn that leverage may have gone too far, pointing to record margin debt and the rise of new leveraged ETFs. “Investors now shoulder risks that outrun what the real economy can carry,” Morningstar says in a note quoted by the daybook. Margin debt—credit brokers extend so clients can buy more stock—magnifies both wins and losses.
The mix of expected Fed cuts and heavy borrowing creates daily headaches for product, operations, and compliance teams, influencing liquidity, collateral management, and risk limits across desks.
The next test is the Fed’s rate vote and the path of inflation. Until there is clarity, the blend of expected easy money and high leverage will force custodians, fund managers, and trading desks to make daily choices about liquidity, collateral, and risk limits.
