Bitcoin Surges 29.74% in Q2 Driven by Institutional Flows and Tax Reform

Bitcoin is currently trading just below $109,000 after experiencing a 29.74% gain in the second quarter, marking its strongest performance since 2020. This surge is driven by institutional flows and corporate accumulation, with an additional boost from recent crypto tax reform efforts in Washington. These developments have instilled a fresh layer of optimism for long-term adoption.

U.S. Senator Cynthia Lummis has introduced a comprehensive bill aimed at modernizing the taxation of cryptocurrencies. Key features of the bill include exempting transactions under $300 from capital gains tax, with an annual cap of $5,000, and delaying taxation on mining or staking rewards until they are sold. The proposal also outlines tax breaks for lending and charitable donations and allows mark-to-market accounting for crypto traders, aligning digital assets with traditional securities.

The bill is projected to generate $600 million from 2025 to 2034 and could become law in a more favorable regulatory environment. If passed, it would simplify the use of crypto in daily life and reduce friction for both retail and institutional adoption, potentially paving the way for broader Bitcoin integration into mainstream finance.

Institutional demand continues to fuel Bitcoin’s bullish momentum. U.S. spot BTC ETFs attracted $769.6 million in inflows this week, marking four straight weeks of net positive flows. This consistency suggests that institutional investors are building positions with a long-term view. On the corporate side, MicroStrategy expanded its holdings by acquiring 4,980 BTC, bringing its total stash to 597,325 BTC. Japan’s Metaplanet added 1,005 BTC, and Blockchain Group purchased 60 BTC, demonstrating firm conviction in BTC as a treasury asset.

Standard Chartered analyst Geoffrey Kendrick raised his year-end forecast to $200,000, citing accelerating demand and improving macroeconomic conditions. His base case for late 2025 remains $135,000, reinforcing a structurally bullish outlook.

Bitcoin price prediction remains bullish, as the asset holds above a key ascending trendline drawn from the June 20 low and continues to respect support near $108,000. However, momentum has cooled after a rejection at $110,413. The MACD has turned bearish on the 2-hour chart, suggesting a brief consolidation or pullback could follow. Key downside levels include $108,000 and $107,325, while resistance remains at $110,413 and $112,041.

Until Bitcoin breaks below $108K, the bullish trend remains intact. Traders may look for a bounce from support to re-enter positions, especially as policy headlines and institutional activity keep sentiment elevated.