Bitcoin Surges 3% to $118,872 Driven by ETF Demand and Corporate Strategies

Bitcoin's recent surge past $118,000 is not driven by Federal Reserve policy or equity market movements, according to analysts. Instead, the cryptocurrency's breakout is attributed to factors such as spot ETF demand and corporate treasury strategies. The recent halving event and strong macroeconomic tailwinds, including potential rate cuts by the Fed, have also contributed to Bitcoin's parabolic breakout.

Bitcoin (BTC) shattered its previous all-time high of $116,000 on July 11, peaking at $118,872 before settling near $117,300, pulling a 3% daily gain that masked the frenzy beneath the surface. Ethereum (ETH) outpaced BTC with a 7% surge, reclaiming $3,000 for the first time since February, while memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB) posted double-digit rallies.

According to Thomas Perfumo, Kraken’s global economist, Bitcoin is “breaking a months-long range” and entering fresh territory for price discovery. Perfumo noted that over $1 billion in short positions were liquidated in the last 24 hours alone, while Bitcoin dominance slipped slightly—a rare sign that altcoins are leading the charge.

“Concurrently, strength in U.S. equities, currently trading at or near all-time highs, is showcasing a robust risk-on environment, a supportive backdrop for crypto,” Perfumo said in a statement.

With Bitcoin dominance dipping to 54%, the market is witnessing a rare convergence, one where institutional accumulation and derivatives chaos fuel gains across the board, not just at the top. The question now isn’t whether macro matters, but whether crypto’s market mechanics have permanently decoupled from traditional triggers.

What distinguishes this rally from previous surges is its foundation. Analysts aren’t pointing to central banks or macro volatility as the spark. Instead, they’re watching structural flows inside the crypto market itself, most notably the direct impact of spot ETF demand.

Bitcoin ETFs logged their biggest single day of inflows in 2025 on Thursday, pulling in $1.18 billion, according to SoSoValue data. Ethereum ETFs followed suit with their second-strongest performance of the year at $383 million. These are not speculative futures bets or proxy trades through microcap equities. They are direct, capital-intensive commitments to spot assets.

Nicolai Sondergaard, research analyst at Nansen, views the breakout through that lens. “In my view, this isn’t a macro-driven rally, but rather an isolated event. That said, recent U.S. policy developments such as fiscal expansion and expectations of further monetary easing have created a backdrop that is undeniably favorable for Bitcoin. We’re seeing Bitcoin treasury strategies proliferate across companies, which reflects growing institutional confidence in BTC as a balance sheet asset,” he also said in a statement.

Sondergaard emphasized that Bitcoin’s clean break through key liquidation levels, and its ability to hold above them, acted as a trigger point for this latest market-wide rally.

What comes next hinges on sustainability. Past rallies relied on macroeconomic tailwinds. This one is testing whether crypto’s internal mechanics, such as ETF flows, corporate adoption, and derivatives markets—can independently support valuations. If so, we may be witnessing the birth of a new market paradigm, one where crypto writes its own rules.

The technical analysis of Bitcoin's price movement shows a strong bullish momentum. The 4-hour and daily moving averages have been rising sharply, with no significant dips below key support levels since May. On a weekly scale, the upward trendline from the 2021 crash has held firm, acting as a launchpad for fresh highs. However, the Fear & Greed Index has hit 71, indicating deep into “Greed” territory. Historically, Bitcoin has seen pullbacks when this index exceeds 70, as seen in 2021 when prices corrected 20% within two months.

The macroeconomic catalysts driving Bitcoin's breakout include the institutional legitimacy gained from President Trump's executive order to create a U.S. strategic Bitcoin reserve, dubbed “virtual Fort Knox.” This move has given Bitcoin institutional legitimacy as a “digital gold,” with its price movements mirroring gold's since early 2024. ETF inflows and corporate adoption have also played a significant role, with ETFs like the Bitcoin Strategy Fund seeing record inflows and corporations adding to their Bitcoin reserves.

The regulatory environment has been a blessing in disguise, with the SEC's delayed crackdown allowing investors to focus on fundamentals. However, there is a risk that a crackdown on energy use or taxation could fizzle the rally. For now, the “wait-and-see” stance is keeping bulls in control.

Analysts like Hashdex are targeting $140,000 by year-end and $198,000 by 2026, suggesting an 80% upside from today's price. The 2025–2030 projections suggest Bitcoin could become the ultimate store of value, eclipsing even gold. However, short-term traders are already cashing in, and the “digital gold” narrative is still unproven in a true crisis. If stocks crash, it remains to be seen whether Bitcoin will follow or hold its ground.

Investors are advised to buy the dip but set limits, locking in gains gradually and monitoring ETF flows and regulation. The long-term projections are based on exponential growth, and investors in for the decade are advised to hold strong. This isn't your grandfather's Bitcoin; it's now a macroeconomic force, backed by institutions and a president. The $116,000 high isn't a flash in the pan—it's the start of a new era. However, investors should not mistake greed for wisdom and should be ready to pivot if fear returns.