Bitcoin has soared above $118,000, marking a new 2025 high. The rally is fueled by a powerful mix of forces that place the cryptocurrency at the center of global financial attention.
ETFs Attract Billions And Squeeze Market Supply
Bitcoin ETFs continue to pull in massive capital. Over the past week alone, more than $7 billion poured into these funds, with several days topping $1 billion in daily inflows. This drains available Bitcoin from exchanges, creating a direct scarcity effect.
Fed Rate Cut Hopes Boost Appetite For Risk
Investors are growing confident that the Federal Reserve may cut rates as early as September. A lower interest-rate environment weakens the dollar and makes assets like Bitcoin more attractive, driving more money into crypto markets.
Clearer U.S. Regulations Ignite Institutional Confidence
In the United States, the Senate passed the GENIUS Act focused on stablecoins, while other crypto-friendly bills are moving forward. This regulatory green light is pushing funds and traditional managers to expand their Bitcoin allocations.
Short Squeeze Accelerates As Exchange Balances Shrink
Just this week, over $1.1 billion in short positions were liquidated. Every forced buy fuels more upward pressure, reinforcing the surge. Meanwhile, Bitcoin balances on exchanges have dropped to their lowest point in five years, tightening supply even further.
What Comes Next For Bitcoin
Analysts believe Bitcoin could soon test $120,000, with some projecting moves toward $130,000 if institutional demand keeps pace. This run highlights how Bitcoin is evolving from a speculative trade into a recognized global portfolio asset.
