Bitcoin surges to new record

Bitcoin has continued its remarkable ascent, reaching new all-time highs in mid-July 2025. The world’s largest cryptocurrency surpassed $123,000, extending a rally that has seen its price surge by nearly 27% since the beginning of the year. This bullish trend has also ignited a broader rally across the cryptocurrency market, with the total market capitalization now exceeding $3.8 trillion.

Several factors are contributing to Bitcoin’s unprecedented surge:

Institutional Demand: A significant driver has been the massive inflow of institutional capital, particularly through U.S. spot Bitcoin Exchange-Traded Funds (ETFs). These ETFs have attracted billions in cumulative inflows, making it easier for both retail and institutional investors to gain exposure to Bitcoin. Companies are also increasingly adding Bitcoin to their treasury holdings, indicating long-term conviction.

Favorable Regulatory Environment and Political Support: The current U.S. administration, under President Donald Trump, has shown a notably pro-crypto stance. Discussions and potential passage of crypto-related bills in the U.S. House of Representatives this week (dubbed “Crypto Week” by Republicans) are boosting sentiment, as investors anticipate increased legitimacy and regulatory clarity for digital assets. President Trump’s past actions, such as an executive order to establish a strategic Bitcoin reserve, have also added to confidence.

Macroeconomic Factors: Bitcoin is increasingly being viewed as a safe-haven asset amidst global economic and geopolitical uncertainties. Concerns about inflation, ongoing de-dollarization trends, and expansionary monetary policies by central banks worldwide are driving investors towards assets with a fixed supply, like Bitcoin. Its performance has shown a decoupling from traditional risk assets, making it an attractive portfolio diversifier.

Supply-Demand Dynamics: The supply of new Bitcoin is constrained due to the halving event in April 2024, which reduced the rewards for miners. This limited new supply, coupled with strong and consistent demand from ETFs and corporate buyers, creates a supply shock that pushes prices higher.

While the current rally is robust, some analysts caution that a short-term correction is possible, with Bitcoin potentially retesting support levels. However, the overall sentiment remains overwhelmingly bullish for the second half of 2025, with many experts forecasting further gains and increased institutional adoption.