Bitcoin is winning political favor on two fronts, which could be a huge catalyst for widespread crypto adoption. In the U.S., President Trump has authorized a review that could eventually place crypto alongside stocks and bonds in 401(k) retirement plans. At the same time, Brazil will soon hold a public hearing on a bill that would put up to 5% of its foreign reserves into a national Bitcoin fund.
The token recently reclaimed the $116,000 level, even peaking above $117,000 on Aug. 7, before bears forced the BTC price to pare gains. The rally came amid renewed optimism over potential Fed rate cuts, though that influence appears to remain secondary to formal crypto legislation. The recent regulatory moves from the U.S. and Brazil could help Bitcoin gain more legitimacy in traditional financial markets.
Political Catalysts Align With Treasury Trends, But BTC Flows Lag
Political momentum for Bitcoin is building in two of the world’s largest economies. In Washington, President Donald Trump’s executive order allows cryptocurrencies to be included in 401(k) retirement plans.
The directive instructs the Department of Labor to review fiduciary guidance under ERISA, potentially allowing defined contribution plans to hold Bitcoin alongside traditional assets. While implementation will depend on employer adoption and regulatory adjustments, the change could open a multi-trillion-dollar retirement market to digital assets over time.
In Brazil, lawmakers are preparing to debate a bill that would allocate up to 5% of the country’s foreign exchange reserves to Bitcoin. Current reserve levels could translate into as much as $15 billion in direct sovereign purchases. Supporters frame the measure as a strategic hedge against inflation and currency volatility. This would align Bitcoin with gold as a store of value in national portfolios.
These political moves fit into a broader pattern of institutional adoption. Public companies, asset managers, and even municipal authorities have begun holding Bitcoin and other cryptocurrencies in treasuries. They cite Bitcoin’s diversification benefits and the asset’s potential as a long-term hedge. Wider integration into both public and private balance sheets would add depth to Bitcoin’s market. Over time, this could strengthen its price floor by creating persistent demand from non-speculative holders.
However, despite these moves forward in crypto adoption, near-term flows have not kept pace with policy enthusiasm. In recent sessions, U.S.-listed Bitcoin investment vehicles have recorded sizable net outflows. This reflects cautious positioning among institutional investors. While these withdrawals may prove temporary, they underscore that policy wins alone will not shield Bitcoin from the broader currents shaping risk appetite.
Bullish Signals Emerge, but August History Warrants Caution
Analysts are flagging technical and macro signals that could favor Bitcoin in the coming weeks.
X-based analyst Lau told her 1.3 million followers that the BTC USD pair has formed a well-defined parallel channel on the four-hour chart. She is currently projecting a potential climb to $133,500, followed by a pullback toward $121,000 and an eventual extension toward $150,000. The pattern reflects consistently higher lows and steady upward momentum, often preceding sustained rallies if support holds.
Macro analyst Batman points to a rising trend in global M2 liquidity, which has historically moved in lockstep with Bitcoin price cycles.
Expanding liquidity increases the pool of capital available for higher-risk assets. The current trajectory, paired with growing political backing in the U.S. and Brazil, could underpin further demand for Bitcoin. These conditions, if maintained, strengthen the bullish outlook into the year’s final quarter.
Still, the historical track record for August tempers the optimism. Another analyst, Nadezhada, shared data showing Bitcoin has posted negative returns in nine of the past 13 Augusts, with an average drop of 7.49%. Even in strong bull years, the month has tended to deliver choppy trading and temporary setbacks. This year’s mild 0.55% pullback so far is well within that historical range.
The takeaway is straightforward: while technical structure and macro liquidity trends support a bullish case, August’s seasonal tendency for weakness remains a risk factor. Traders may find opportunities, but should remain mindful of the month’s history before positioning for an uninterrupted advance.
