Bitcoin has rebounded to $95,000, a price last seen in February, gaining nearly 15% in 30 days. Key drivers of this increase include significant inflows into spot Bitcoin ETFs, a shift in investor perspective towards Bitcoin as a long-term store of value, and a tightening Bitcoin supply due to a global supply shock. Future market movements will likely hinge on ETF inflow trends.
In a surprising twist for investors, Bitcoin has surged to reach $95,000, a price not seen since February 25. After grappling with months of stagnation, Bitcoin has gained nearly 15% over the last month, raising optimism about it once again breaching the significant $100,000 threshold. But what exactly is driving this rally and how likely is it to maintain its momentum?
One of the most significant reasons for Bitcoin’s recent upward trajectory is the resurgence of investment inflows into spot Bitcoin exchange-traded funds (ETFs). Essentially, when money starts flowing into these ETFs, Bitcoin’s price tends to rise. In contrast, outflows trigger price declines. Thus, many analysts are closely monitoring these ETF trends for clues about Bitcoin’s future movements.
Diving into the data, it’s evident that during times of uncertainty, like the tariff debates earlier this year, investors withdrew money from riskier assets, including Bitcoin. This was reflected in negative inflows from Bitcoin ETFs. However, recent figures paint a different story; on April 25 alone, a spot ETF, the iShares Bitcoin Trust, saw a whopping nearly $1 billion inflow, and total inflows across the sector reached nearly $3 billion from April 21 to 25.
Seeing this trend, one must wonder what has shifted in investor attitudes towards Bitcoin, contributing to this sudden influx. A growing number of investors now view Bitcoin not as a volatile gamble but as a stable long-term store of value—more akin to a hedge against economic instability. Previously, as markets fluctuated, capital sought refuge in gold, pushing its prices to record highs. But now, some of that cash appears to be migrating into Bitcoin,
Bitcoin is often touted as ‘digital gold’ for good reason. It shares several similarities with traditional gold, like scarcity, global availability, and a controlled supply—no central bank can simply inflate its numbers. This controlled nature stems from an algorithm dictating how many new Bitcoins can enter circulation.
Adding another layer to this analysis is a concerning supply shock within the market. For months, experts in the cryptocurrency space have warned that not enough Bitcoin is available for the increasing demand. This is evidenced by the dwindling supply held by major cryptocurrency exchanges, which recently dropped to three-year lows. If ETFs are purchasing Bitcoin in large volumes, they will need to source it from exchanges, depleting available reserve stocks further.
As highlighted in a statement from BlackRock about the potential supply shock, the total Bitcoin supply is capped at 21 million coins, and an estimated 3 to 4 million of these coins are no longer accessible. To put it in perspective, if every millionaire in the U.S. sought just one Bitcoin, there wouldn’t be enough to meet that demand.
Looking ahead, it’s not too hard to connect the dots to understand why Bitcoin has regained the $95,000 mark. Renewed positive inflows into spot Bitcoin ETFs, shifts in investor perspective towards Bitcoin as a security blanket for economic turbulence, and decreasing availability all contribute to this optimistic view. As more individuals choose to hoard Bitcoin for the long term, the supply tightens, leading to upward price pressure.
So, optimistically speaking, I find myself bullish on Bitcoin as we move deeper into 2025. Keeping an eye on the spot Bitcoin ETFs will be crucial for gauging the sustainability of this potential rally. For now, it seems Bitcoin has turned a corner, with the next milestone of $100,000 right around the corner.
