Bitcoin extended its rally on Friday, climbing 4% to $117,955.25 after reaching a record high of $118,872.85. This surge was largely driven by significant inflows into bitcoin ETFs, which posted their largest day of the year on Thursday with $1.18 billion in investments.
Ether also showed strong performance, rising 6% and reclaiming the $3,000 mark for the first time since February. The growing investor enthusiasm reflected broader market momentum for cryptocurrencies.
Fed Uncertainty, Tech Rally, and Liquidations Drive Crypto Prices to New Highs
The rally gained traction earlier in the week following the release of the Federal Reserve meeting minutes, which highlighted internal disagreements over interest rate cuts. Coupled with a tech stock rally, this sparked bullish sentiment across crypto markets.
Markus Thielen, CEO of 10x Research, noted that expectations of a dovish future Fed chair and policies like the “One Big Beautiful Bill Act,” which could increase the federal deficit, are acting as positive catalysts for bitcoin.
Bitcoin Soars Past $117K as ETF Inflows, Fed Speculation, and Short Squeezes Ignite Crypto SurgeThe rapid price increase triggered over $550 million in bitcoin short liquidations and $195 million in ether short liquidations within 24 hours. This domino effect, where short-sellers are forced to buy back assets at higher prices, intensified the upward momentum. Leverage-driven trades have made the crypto market especially reactive to such sharp price shifts.
Institutional Bitcoin Demand Surges Amid Political Shifts and Expectations for Legislative Progress
Institutional interest in bitcoin has been rising since mid-April, coinciding with President Donald Trump’s criticism of Fed Chair Jerome Powell and speculation about his potential replacement. Since then, inflows into bitcoin ETFs have swelled to nearly $16 billion. Institutional investors are responding to potential shifts in monetary policy and growing political support for crypto-related initiatives.
Market participants anticipate that bitcoin will continue setting new records in the second half of 2025, fueled by corporate adoption and potential legislative progress in Congress. However, Thielen cautioned that without major macroeconomic developments, market movements may be short-term and driven by sentiment. As of now, bitcoin is on pace for a 10% weekly gain—its best since April—while ether is up over 21%, its strongest week since early May.
