Since reaching a new record high of $111,970 on May 22, Bitcoin (CRYPTO: $BTC ) has struggled to find any upward momentum. In fact, over the past two weeks, Bitcoin has shown signs of dropping below the $100,000 mark.

The good news is that three major catalysts are emerging that could push Bitcoin higher in the next three months. If so, Bitcoin could reach a new record high above $125,000 before summer ends.

Strategic Bitcoin Reserve

The first catalyst is the new law for the U.S. Strategic Bitcoin Reserve. That's right, an executive order has existed to create the Strategic Bitcoin Reserve, but there has been no law that actually defines how it operates and its function.

The White House's executive order in March specified that any future Bitcoin purchases must be "budget-neutral" and not directly impact taxpayers. This new bill is expected to outline a clear mechanism for how this fund will operate.

A major deadline to watch is July 22. That’s when the Trump administration is expected to announce the final architecture of the Strategic Bitcoin Reserve. According to Bo Hines, executive director of the White House's Digital Asset Advisory Council, a "reserve framework" already exists and is being circulated among various interagency working groups.

So, it seems this is really a case of when, not if, the new law for the Strategic Bitcoin Reserve will eventually be voted on by members of Congress. If the Strategic Bitcoin Reserve can garner genuine bipartisan support, then that’s when Bitcoin could start to surge.

Will U.S. Businesses Accept Bitcoin?

One of the big stories of the year in the cryptocurrency industry is the emergence of new companies following the Bitcoin Treasury Company (BTC) model. These companies do nothing but buy Bitcoin, and some of them have amassed huge amounts of capital to do so.

Additionally, some well-known companies in the tech industry are beginning to consider adding Bitcoin to their balance sheets as a Treasury asset. In just the past six months, two major tech companies -- Microsoft (NASDAQ: MSFT) and Meta (NASDAQ: META) -- have voted on shareholder proposals requesting they add Bitcoin to their balance sheets.

Although both voted "no" on these proposals, it is easy to see how the floodgates are starting to break. Smaller companies are beginning to accept Bitcoin. The latest example is Trump Media & Technology Group (NASDAQ: DJT), which recently raised over $2 billion to buy Bitcoin. Just one well-known company accepting Bitcoin as a Treasury asset could create a domino effect among U.S. companies.

Federal Reserve Interest Rate Cuts

And finally, there’s the issue of the Federal Reserve and the likelihood of upcoming interest rate cuts. Starting in April, President Donald Trump has called on the Fed to lower interest rates, even hinting that he might be willing to replace Fed Chairman Jerome Powell if he does not comply.

At the beginning of June, President Trump intensified calls for interest rate cuts, stating that cuts need to happen immediately. Now he is asking for "a full point" from the Fed. As he noted in a social media post, this would be "rocket fuel" for the economy, making it easier for people to borrow money.

It will also be "rocket fuel" for the cryptocurrency market. Historically, Fed rate cuts have led to fast, cheap money flowing into cryptocurrency. The best example is from the pandemic era when the Fed lowered rates to zero in March 2020. That coincided with Bitcoin soaring to a new record high during the period from April 2020 to November 2021.

How Likely Are These Catalysts to Occur?

In theory, all of these potential Bitcoin catalysts sound great. But how likely are they to happen? After all, if the Trump administration cannot pass the Big Beautiful Bill, how can they pass the Big Beautiful Bitcoin Bill? And the Fed's interest rate cuts are not an easy feat either. As long as the economy is at risk of higher inflation due to new tariffs, the Fed may be reluctant to lower interest rates.

That’s why some traders are warning about a "bull trap" for Bitcoin. In other words, investors may be tempted to invest in Bitcoin due to rampant hype, rumors, and speculation. It seems Bitcoin has nowhere to go but up. As soon as enough of these investors pour money into Bitcoin, the trap will close. The price of Bitcoin will drop and these investors will lose money.

So, if you are thinking about investing in Bitcoin, make sure you do so because you believe in its long-term prospects. If you are trying to time the market in the short term, there is a good chance you are doing it all wrong.

The good news is that online prediction markets are currently estimating a 62% chance that Bitcoin will reach $125,000 before the end of the year. If the U.S. government throws its full weight behind its Strategic Bitcoin Reserve and if U.S. companies continue to accept cryptocurrency, then it’s possible Bitcoin will reach that goal by the end of summer.