Will Rising Spot Volume Trigger Bitcoin’s Next Major Rally?

In 2025, Bitcoin’s trajectory has been reshaped by a confluence of regulatory clarity and institutional adoption, creating a fertile ground for sustained price appreciation. The U.S. and EU regulatory frameworks have unlocked unprecedented capital flows into Bitcoin, while on-chain metrics signal a maturing market structure. This analysis examines whether rising spot volume—driven by institutional demand—will catalyze Bitcoin’s next major rally.

Regulatory Clarity: The Catalyst for Institutional Adoption

The U.S. regulatory landscape has undergone a seismic shift, with the rescinding of SAB 121 and the passage of the GENIUS and CLARITY Acts. These changes have removed barriers for banks to custody crypto assets, enabling institutions to allocate capital to Bitcoin without legal ambiguity [4]. The approval of multiple spot Bitcoin ETFs—most notably BlackRock’s iShares Bitcoin Trust (IBIT)—has further legitimized Bitcoin as a mainstream asset. By Q1 2025, IBIT alone attracted $18 billion in assets under management (AUM), with 68% of investors using ETFs for Bitcoin exposure [5].

The European Union’s Markets in Crypto-Assets (MiCA) regulation, operational since January 2025, has similarly harmonized compliance standards across the bloc, reducing jurisdictional arbitrage and fostering institutional trust [5]. These regulatory tailwinds have positioned Bitcoin as a $3 trillion institutional asset class, with 86% of institutional investors either holding Bitcoin or planning allocations exceeding 5% of their AUM [5].

On-Chain Demand Shifts: From Retail Volatility to Institutional Stability

Bitcoin’s on-chain activity in 2025 reflects a structural shift from retail-driven volatility to institutional-grade stability. Whale activity, such as a July 2025 transfer of 40,000 BTC ($4.35 billion) to cold storage, underscores long-term conviction despite short-term bearish signals [1]. Institutional wallet ownership has surged by 51% YoY, with over 31 million wallets tied to organizations, while corporate treasuries now hold 951,000 BTC ($100 billion) [2].

Transaction patterns also reveal a transition to large, infrequent transfers. Daily Bitcoin transactions declined by 41% from October 2024 to March 2025, with average transaction sizes increasing significantly [3]. This aligns with the dominance of institutional trading volume, which now accounts for 60% of Bitcoin’s total spot volume [5]. The shift has reduced Bitcoin’s daily volatility from 4.2% to 1.8% post-ETF approval, stabilizing price dynamics [1].

Spot Volume and Price Correlation: A Bullish Convergence

While Q2 2025 saw a 22% decline in spot trading volumes on centralized exchanges (CEXs), this was offset by a 370% surge in ETF inflows, signaling a migration of liquidity from speculative retail trading to institutional accumulation [5]. On-chain metrics further reinforce this bullish narrative:
- MVRV Z-score: By late August 2025, the MVRV Z-score reached 2.49, entering the overbought zone but remaining below historical overvaluation thresholds (3.5–4.0) [4].
- Total Value Locked (TVL): Institutional adoption has driven TVL growth, with U.S. spot ETFs holding 1.3 million BTC and corporate entities like MicroStrategy accumulating $71.2 billion in Bitcoin [3].
- Hash Rate and Security: Bitcoin’s hash rate hit an all-time high of 675 EH/s in March 2025, reflecting miner confidence amid favorable regulatory conditions [1].

The interplay between spot volume and price is now influenced by macroeconomic factors. Bitcoin’s correlation with global M2 money supply (0.78) and U.S. equities has strengthened, positioning it as a hedge against fiat devaluation [1]. With the Federal Reserve’s September rate cut probability at 90.3%, Bitcoin could see a liquidity-driven rally [6].

The Path to $190,000: Institutional Demand and Supply Constraints

Analysts project Bitcoin’s price to reach $190,000 by Q3 2025, driven by sustained institutional demand and post-halving supply constraints. The 74% illiquid supply—coins dormant for over two years—has tightened the float, making Bitcoin more sensitive to new buying [3]. Additionally, the U.S. Treasury’s allowance of 401(k) access to Bitcoin has unlocked $8.9 trillion in capital, enabling systematic investment strategies [5].

However, risks persist. The expiration of Trump’s 90-day tariff freeze and potential trade tensions could reintroduce volatility [6]. Investors are advised to adopt a core-satellite strategy, allocating 60–70% to Bitcoin for stability and 30–40% to high-conviction altcoins [3].

Conclusion

Rising spot volume, fueled by regulatory-driven institutional adoption, is a critical catalyst for Bitcoin’s next major rally. The convergence of on-chain stability, macroeconomic tailwinds, and a $3 trillion institutional demand pool positions Bitcoin to break historical price ceilings. While short-term volatility remains a factor, the structural reorientation of the market toward institutional-grade infrastructure suggests a bullish trajectory through 2025.

Source:
[1] Bitcoin Price Prediction 2025: What On-Chain Metrics Tell Us [https://medium.com/@XT_com/bitcoin-price-prediction-2025-what-on-chain-metrics-tell-us-d3812d6717d8]
[2] Cryptocurrency Wallet Adoption Statistics 2025 [https://coinlaw.io/cryptocurrency-wallet-adoption-statistics/]
[3] Institutional Bitcoin Movements and Market Implications [https://www.ainvest.com/news/institutional-bitcoin-movements-market-implications-large-transfers-signal-institutional-strategy-shifts-liquidity-trends-2508/]
[4] Q3 2025 Bitcoin Valuation Report [https://www.chaincatcher.com/en/article/2199982]
[5] The Regulatory Shift in Crypto Markets: Implications for Spot Bitcoin Trading [https://www.ainvest.com/news/regulatory-shift-crypto-markets-implications-spot-bitcoin-trading-registered-exchanges-2509/]
[6] Bitcoin's Q3 2025 Outlook: Will It Beat the Historical Slump? [https://beincrypto.com/bitcoin-q3-2025-price-prediction/]