Bitcoin: New All-Time Highs Achieved
Bitcoin extended its impressive rally on Friday, soaring to new records overnight and topping $118,000. This significant price surge was primarily fueled by Bitcoin ETFs experiencing their largest day of inflows for the year, signaling robust institutional interest.
The flagship cryptocurrency was last trading higher by 3% at $117,297.10, according to Coin Metrics, and earlier in the day, it reached a peak of $118,872.85. This strong performance underscores a renewed bullish sentiment in the crypto market.
Ethereum: Breaks Past $3,000 Milestone
Following Bitcoin’s lead, Ethereum also demonstrated significant strength, rising nearly 6% to reach $2,976.90. Crucially, Ether briefly crossed back above the $3,000 level for the first time since February, marking a key psychological and technical milestone for the second-largest cryptocurrency.
While stocks tied to Bitcoin’s price, such as pure-play miners Mara Holdings and Riot Platforms, saw more modest gains of 2.5% and 1.5% respectively, and MicroStrategy gained almost 3%, the broader crypto market showed strong upward momentum. Crypto trading providers Coinbase and Robinhood also saw gains of 1%.
ETF Inflows: Record-Breaking Day
Thursday proved to be a record-breaking day for cryptocurrency Exchange Traded Funds (ETFs). Bitcoin ETFs alone logged their largest single day of inflows for 2025, attracting a staggering $1.18 billion. Not to be outdone, Ether ETFs also recorded their second-biggest day of inflows ever, with an impressive $383.1 million flowing into these products, according to SoSoValue data. These substantial inflows highlight a significant increase in institutional capital entering the crypto market, providing strong tailwinds for price appreciation.
Federal Reserve: Divergence and Dovish Expectations
The rally initially began more slowly on Wednesday, following the release of the minutes from the latest Federal Reserve meeting. These minutes revealed a divergence among officials regarding their willingness to aggressively cut interest rates. However, Bitcoin, also supported by a rally in tech stocks, gained momentum into the market close, reaching its first new record since May 22.
Markus Thielen, CEO of 10x Research, noted, “That’s when we started to really take out the top range.” He added that expectations of a dovish stance from the next Fed leader and the “One Big Beautiful Bill Act” (expected to increase the federal deficit) are positive catalysts for Bitcoin.
Short Liquidations: Market Shakeout
The week’s upward price movement triggered a substantial wave of short liquidations across the crypto market. In the past 24 hours alone, Bitcoin saw more than $650 million in short liquidations, while Ether experienced over $215 million in similar forced closures.
This phenomenon occurs when traders using leverage to short Bitcoin are forced to buy back the cryptocurrency to cover their positions as its price rises, further exacerbating the upward price pressure and leading to more liquidations in a cascading effect.
Fed Independence: A Macro Catalyst
The theme of Federal Reserve independence has been a significant macro catalyst for institutions since approximately April 17. This period coincided with a notable ramp-up in inflows into Bitcoin ETFs, and also when President Donald Trump hinted that the “termination” of Federal Reserve Chair Jerome Powell might be necessary given the central bank’s stance on interest rates. Since then, total inflows into Bitcoin ETFs have surged to nearly $16 billion, indicating that investors are increasingly viewing Bitcoin as a hedge against potential monetary policy shifts and broader economic uncertainties.
Future Outlook: Continued Bullish Sentiment
Investors have been broadly anticipating Bitcoin to reach new records in the second half of the year, driven by accelerating corporate treasury Bitcoin buying sprees and the increasing likelihood of Congress passing new crypto legislation. Markus Thielen suggests that only a major macro event could significantly knock or suppress Bitcoin’s price.
For the week, Bitcoin is on track for a nearly 10% gain, while Ethereum is up more than 20%, reflecting strong bullish sentiment. While short-term volatility remains, the overarching trend points towards continued institutional adoption and price appreciation, with the summer months potentially seeing further price gaps due to thinner trading volumes.
