Bitcoin’s rally accelerated this week, with the world’s largest cryptocurrency soaring past $118,000 for the first time in history.
The digital asset is up roughly 26% so far this year, buoyed by strong institutional demand, a favorable political environment under the Trump administration, and an ever-tightening supply outlook.
All-Time Highs and Market Momentum
Bitcoin briefly touched $118,900 on Friday, eclipsing its previous peak set just a day earlier. At the time of writing, it was trading around $117,400. Ether, the second-largest cryptocurrency, hovered near $3,000, reflecting broader enthusiasm across the digital asset market.
Cryptocurrency-adjacent equities also moved higher in response. Shares of MicroStrategy (MSTR), the largest corporate holder of bitcoin, climbed nearly 3%. Mining firms Marathon Digital (MARA) and Riot Platforms (RIOT) rose around 2% to 4%. The surge extended gains that have been building since January, with some crypto-linked stocks now up more than 50% year to date.
A Supply Crunch Meets Institutional Demand
Bitcoin’s supply story remains its strongest tailwind. About 94% of all bitcoins have already been mined, and with April’s halving cutting the daily issuance from 900 to 450 coins, the pressure on available supply has only intensified. Analysts estimate that as much as 20% of total bitcoin supply may be permanently lost due to forgotten passwords or abandoned wallets.
This tightening supply is colliding with a dramatic surge in demand. Exchange-traded funds absorbed $4.6 billion in bitcoin inflows last month alone. Meanwhile, corporate treasuries are increasingly allocating to bitcoin as a strategic reserve. Treasury-focused firms acquired an estimated 160,000 BTC in Q2—roughly equivalent to the total amount of new coins mined all year.
Tesla (TSLA) and SpaceX, which hold over 19,000 bitcoins combined, have been joined by newer entrants mimicking MicroStrategy’s leveraged acquisition model. The trend appears to be accelerating heading into Q3.
Trump Administration Policies: A Key Catalyst
President Trump’s open embrace of cryptocurrencies has added fuel to the fire. From rolling back regulatory constraints to endorsing the Genius Stable Coin Act and proposing a Strategic Bitcoin Reserve, the administration has actively supported the sector.
Legislation under debate in Congress this week, including the Genius Act and the Clarity Act, could provide further legal and institutional certainty. That would likely unlock even more capital from Wall Street and reduce the likelihood of regulatory-driven volatility.
At the same time, macroeconomic concerns—particularly over government debt and inflation—have led some investors to view bitcoin as a hedge against fiscal instability. Elon Musk has even hinted that his new political movement, the America Party, would adopt bitcoin as a key platform issue, criticizing both major parties for their role in spiraling government expenditures.
Caution Amid Euphoria
Despite the bullish backdrop, analysts caution that volatility remains a feature, not a bug, of the asset class. A pullback is always possible, especially if inflation pressures resurface or if ETF flows slow. The $120,000 level is seen as a technical resistance point; breaching it could fuel further momentum, but failing to hold could invite short-term correction.
Still, today’s rally appears more grounded than the retail-fueled run-up of 2021. Institutional participation, regulatory clarity, and longer-term capital commitments suggest a more mature market structure.
Bitcoin’s Next Chapter Unfolds
Bitcoin’s historic surge in 2025 is being shaped not just by market dynamics, but by policy shifts, corporate strategy, and a redefined investment landscape. Whether or not the asset hits the $150,000 or $200,000 price targets floated by some analysts, one thing is clear: Bitcoin has entered a new phase of relevance—one in which it is increasingly treated not as a speculative gamble, but as a legitimate component of modern financial portfolios.
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