When bitcoin went over $120,000 in July 2025, experienced crypto traders felt a rush they had felt before. According to Binance data, the world’s largest cryptocurrency had been flirting with six figure levels for months.
But when it shot past $120,000 and reached an all-time high of nearly $123,153, the markets were still shocked.
The move came after a week of record highs and ended a 3% daily jump and a 12% weekly gain. Bitcoin’s market cap is now on par with the GDP of midsize countries.
The total value of the crypto market is around $3.8 trillion, according to reuters. This is more than just a passing interest.
A lot of headlines called the rally another case of “digital gold” fever. But if you look more closely, you’ll see that the boom in 2025 is very different from the bubbles in 2017 or 2021.
The run-up wasn’t just caused by crazy retail speculation; it was also caused by a mix of institutional flows, regulatory breakthroughs, macroeconomic shocks, and geopolitical manoeuvring.
It’s important to know what these drivers are because they show how the cryptocurrency markets are growing and where they are still very weak.
A timeline for 2025, from halving hangover to new highs
Bitcoin started 2025 off strong, thanks to the launch of U.S. spot bitcoin ETFs. Crypto fans were even more excited when Donald Trump came back to the White House.
Amberdata’s Q1 2025 market report says that bitcoin briefly hit highs close to $109,000 after the inauguration, but then fell back down because of macroeconomic uncertainty and a security breach at Bybit.
The report said that U.S. exchange-traded funds (ETFs) had net inflows of $4.5 billion in January, but when volatility rose, they saw outflows.
MicroStrategy (now called Strategy Inc.) responded by doubling down: it bought about 11,000 BTC in the first quarter, bringing its total to about 461,000 coins. The first few weeks set the stage for the “institutional vs. retail” story that would take over the year.
Bitcoin set more records in May. As risk appetite grew, it rose to $109,760.08 on May 21, 2025, its highest point of the year up to that point.
Reuters said that the rally was caused by lower trade tensions between the US and China and a Moody’s downgrade of US sovereign debt, which made investors move their money out of dollars and into other stores of value.
Antoni Trenchev, co-founder of the trading platform Nexo, called it “blue sky territory” because of institutional momentum and a good regulatory environment in the U.S. According to Reuters, analysts were already talking about targets of $150,000 at the time.
By the beginning of July, momentum was back with a bang. Reuters said that bitcoin’s rise to a new high was not caused by leverage or meme stocks, but by a lot of money going into ETFs and companies putting more money into their treasuries.
Open interest in bitcoin futures hit a record $57.4 billion, and funding costs stayed low. This means that the rally was driven by long-term investors instead of leveraged speculators.
According to Glassnode, the estimated leverage ratio in futures markets dropped from 0.32 at the start of 2025 to 0.25. This means that positions were backed by more real money and less borrowed money. In this way, the bull run of 2025 looked better than those of the past.
On July 14, which was called “Crypto Week” in Washington, the euphoric breakout happened. A Reuters report summed up the mood: bitcoin went over $120,000 for the first time because people were excited about the upcoming U.S.
The House is talking about how to regulate digital assets, which has helped the stock market gain about 30% this year. Fortune said that the price hit a high of about $123,000, going up about 3% in one day and 12% in one week.
Fortune used CoinShares data to show that BlackRock’s bitcoin fund alone brought in more than $2.4 billion in a single week. The total amount of money that went into crypto ETFs was $3.7 billion.
CoinShares says that this was the second-largest week ever for crypto ETF inflows, which means that big Wall Street investors were getting in on the action.
At the same time, American politicians were showing that their attitudes were changing. Trump called himself the “crypto president.”
The House was getting ready to vote on the GENIUS Act, which would set up rules for payment stablecoins; the CLARITY Act, which would clarify the roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission; and an anti-CBDC bill that would make it illegal to have a retail central bank digital currency.
The House committee’s press release said that the week of July 14 would be “Crypto Week” and that Congress would look at these bills to make the United States the world’s crypto capital.
Institutional flows vs retail FOMO
“This rally is different” is a phrase that professional traders have been saying a lot this year. Reuters explains why: analysts think that institutional demand has driven the current surge more than retail speculation.
ETFs have had a great start to July, bringing in $3.4 billion, including a record $2.2 billion in just two days.
Because institutions invest for longer periods of time and are less likely to panic sell, those flows are usually more stable. Glassnode’s data on futures positioning backs this up even more lower leverage ratios and modest funding rates suggest a calmer market with fewer gamblers.
Corporate treasuries have also become a big source of demand. Strategy Inc., the software company that used to be called MicroStrategy, reported second-quarter earnings of $14 billion in operating income and $10 billion in net income, mostly because bitcoin prices went up 30% strategy.com.
By the end of July, the company owned 628,791 BTC, making it one of the largest private holders.
Later, Reuters said that companies like Strategy and GameStop that hold bitcoin as part of their corporate treasury may be a bigger source of demand than traditional investors like pension funds or endowments.
Since July 2024, public companies have increased their bitcoin holdings by 120%, now owning about 859,000 BTC (roughly 4% of total supply). With corporate share prices often soaring in tandem with bitcoin, some firms have even issued stock to fund more purchases.
We shouldn’t let institutional enthusiasm blind us to the limits of current adoption, though. Another Reuters article said that less than 5% of spot bitcoin ETF assets were held by long term investors like pensions and endowments, while 10-15% were owned by hedge funds or wealth managers. Most ETF ownership is still retail.
When prices went up after Trump’s election and again during the June-July rally, retail buyers bought a lot of crypto ETFs, according to estimates from Vanda Research.
This means that the line between institutional and retail demand is still not clear. Wealth managers often buy ETF shares for wealthy clients, and hedge funds trade them a lot. If retail interest wanes, these flows could change quickly.
Triggers in politics, law, and regulation
A lot of Bitcoin’s story in 2025 is about regulation. The GENIUS Act, which stands for “Guarding and Encouraging the Nation’s Investment and Uplifting of Digital Assets,” sets up rules for payment stablecoins.
The law, as explained by the law firm Jones Day, puts issuers with more than $10 billion in circulation under federal supervision, makes it clear that payment stablecoins are not securities or commodities, and bans algorithmic stablecoins.
The act also requires issuers to keep 1:1 reserves, forbids mixing customer funds, and requires more information to be given to consumers.
The CLARITY Act, on the other hand, sets up a temporary registration system for token issuers, divides regulatory authority between the SEC and CFTC, and gives decentralized finance participants a safe place to stay.
When the House passed these bills with support from both parties in mid-July, analysts said it was the biggest step forward for U.S. crypto legislation since the infrastructure bill.
Congress also looked at the Anti-CBDC Surveillance State Act. House leaders said that making a retail central-bank digital currency would put Americans’ financial privacy at risk, and they promised to stop it.
In other words, the Republican-controlled House supported private-sector crypto innovation but warned against digital money controlled by the government. This political stance is in line with President Trump’s pro-bitcoin rhetoric.
He called himself “the crypto president” in July and joked about setting up a Strategic Bitcoin Reserve, which would be a national stash of seized bitcoins like the gold reserves at Fort Knox. Agencies have also made things clearer for businesses.
At the beginning of the year, the Office of the Comptroller of the Currency issued guidance that allowed federally chartered banks to hold digital assets. This is a step toward institutional adoption.
The minutes from the Federal Reserve’s June meeting said that “some reduction in the target range for the federal funds rate this year would likely be appropriate.” This hint of rate cuts helped drive up demand for risk assets, and analysts like CoinShares’ James Butterfill said it was a big reason for the ETF inflows in July.
When the House took up the CLARITY and GENIUS acts a few days later, the story that Washington was becoming more crypto-friendly reached a fever pitch.
Macroeconomic trends include tariffs, inflation, and trade agreements
The bigger picture has also had an effect. In mid-May, when the U.S. and China backed off on tariff threats and Moody’s cut U.S. sovereign debt, the dollar fell and alternative assets became more appealing.
In early July, Finance Magnates reported that Trump struck a trade deal with the European Union that reduced tariffs on key goods, calming markets and fueling risk appetite. The same article argued that optimism about rate cuts and political pressure on the Federal Reserve further boosted crypto prices.
As the U.S. economy slowed down and inflation rose because of higher prices caused by tariffs, investors started to see bitcoin as a way to protect themselves from both a falling dollar and rising consumer prices.
Another big story is the move away from the dollar. The BRICS countries (Brazil, Russia, India, China, and South Africa) have talked about making a blockchain-based payment network and maybe even a shared currency.
Even though the details are still unclear, these kinds of actions show that major economies want to get around U.S. sanctions and depend less on the dollar. In this light, some investors see bitcoin as a neutral settlement asset a digital version of gold that no one country controls.
Even though these changes in the world don’t directly affect prices every day, they add to the long-term story that digital assets protect against currency debasement and geopolitical fragmentation.
Whales, signals on the blockchain, and taking profits
Even though institutional flows helped the rally, on-chain analytics showed some warning signs. BlockchainReporter reported that whale inflows, which are large holders moving coins to exchanges, rose by $17 billion over four days in mid-July as bitcoin neared $120,000. The 30 day average of whale inflows rose from $28 billion to $45 billion, the highest level since early 2024.
In the past, similar spikes in inflow have come before market tops, which means that big players were getting ready to sell or take profits. CryptoPotato noticed that “Coin Days Destroyed” (which tracks the movement of older coins) and Net Realised Profit and Loss both went up.
Realized profits were over $4 billion, the highest level since early in the second quarter, which suggests that whales were locking in gains. The data also showed resistance levels near $124,000 and $136,000, with support around $113,000, $111,000, and $101,000.
These technical zones are important because they often act as psychological barriers in markets with low trading volume.
Cointelegraph reported on some big whale movements. On July 17, an address that had been inactive for a long time and held 40,192 BTC, which were mined in 2011, moved all of its money to a new wallet. That whale had already sent another 40,009 BTC to Galaxy Digital a few days earlier, for a total of almost $5 billion.
Analysts thought that these moves, along with other whales cashing out, caused bitcoin to drop from $122,000. Another Cointelegraph analysis found that Binance’s Whale Activity Score shot up when 1,800 BTC worth more than $1 million each were deposited to the exchange.
Long-term holders were making money, and more than 98% of the supply was in profit, which made a sell-off more likely. The article said that if support fails, bitcoin could drop to fill a CME futures gap around $114,400 or even fall to $108,000.
These on-chain signals didn’t mean a crash was about to happen, but they did remind investors that bull markets often have big corrections and that whales can change prices by unlocking coins that have been sitting around.
Understanding this dynamic helps explain why bitcoin fell back to about $116,000 for a short time in July and then stayed between $116,000 and $119,000.
Some people who believe in efficient markets might see this kind of volatility as a sign of healthy profit-taking. Others, on the other hand, see it as a sign of a structural weakness: a small number of very large holders still have enough coins to affect prices.
Retail psychology and the fear of missing out
Retail investors are the emotional core of any crypto rally, beyond whales and institutions. As bitcoin broke through one round number after another, FOMO kicked in. Social media was full of calls for price targets of $150,000 and even $200,000. But professional analysts were still cautious.
Vanda Research told Reuters that retail purchases of crypto ETFs and crypto linked stocks closely followed price increases, which suggests that retail momentum still drives short term swings.
Coinbase traffic spikes, trending hashtags, and the return of crypto-focused gaming tokens were all signs that a new group of investors was joining.
This excitement comes with some risks. As of July 2025, more than 98% of the bitcoin supply was in profit, which meant that there wasn’t much “dry powder” of underwater holders to provide a floor if the price dropped.
On-chain metrics like Coin Days Destroyed and Net Realised Profit and Loss showed that some long-term holders were selling their coins.
If prices dropped a lot, a lot of the late-cycle retail buyers could panic and make the drop worse. This happened in past bull markets and is still a big risk.
The bigger picture is geopolitics and the story of digital gold
Bitcoin’s rise is connected to bigger geopolitical trends. As global power centres break apart, the idea of a neutral, censorship-resistant asset becomes more and more appealing. Russia and China, for example, have sped up talks about alternatives to SWIFT and the dollar.
The BRICS group is said to be working on a cross-border payment system that could use blockchain technology to make trading outside of the U.S. financial system easier.
Even though these plans are still years away from being put into action, they add to the growing story that bitcoin, with its fixed supply and decentralized network, protects against currency debasement and geopolitical instability.
Meanwhile, states and cities in the US are getting on board with the “digital gold” idea. Earlier this year, there were reports that some state legislatures wanted to use some of their treasuries to buy bitcoin. For example, Oklahoma’s Strategic Bitcoin Reserve Act would let up to 10% of extra money be kept in BTC.
These kinds of bills are still in the testing stage, but they show a change in how people see cryptocurrency: it’s no longer just a fringe asset, but a real part of public finance. For example, sovereign wealth funds like Abu Dhabi’s Mubadala and the State of Wisconsin Investment Board have revealed positions in bitcoin ETFs, which makes the asset class even more legitimate.
What could stop the rally?
Even though things are looking good, there are a few things that could end the party quickly. For example, the GENIUS and CLARITY acts still need Senate approval, and partisan fighting could make them less effective or stop them altogether.
The upcoming presidential and congressional elections in the U.S. add to the uncertainty. Trump is currently pro-crypto, but a new administration could change that. Around the world, regulators may not be as friendly.
The European Union is making rules stricter through its Markets in Crypto Assets (MiCA) framework, and China still doesn’t allow crypto trading.
Second, the Federal Reserve’s balancing act is still very fragile. If inflation stays higher than expected and the Fed doesn’t cut rates, risk assets could lose value.
On the other hand, aggressive rate cuts could make the dollar weaker and inflation rise, which would keep bitcoin attractive. The markets are basically betting on a Goldilocks scenario; any change could cause violent price changes.
Third, corporate treasuries’ growing exposure is a double-edged sword. Reuters warned that if bitcoin falls below $90,000, about half of corporate treasury holders could find themselves underwater.
That would put pressure on executives and could lead to forced selling to shore up balance sheets. In other words, the same corporate adoption that drives rallies could also make downturns worse.
Fourth, whales are still a wild card. The sudden transfer of tens of thousands of coins from dormant wallets shows that early adopters still control vast pools of bitcoin.
Their decisions to sell, whether for diversification, charitable reasons, or regulatory pressure, can have a big effect on prices. On-chain data showing high whale inflows and signs of profit taking should serve as a warning against being too comfortable.
A well-rounded view
What’s next for bitcoin? Predictions are cheap and often wrong, but the signals we’ve been following give us some clues. On the one hand, more and more institutions are using it, the rules are becoming clearer, the economy is still strong, and the story of digital gold is stronger than ever.
Analysts like Nexo’s Antoni Trenchev say that targets for the end of the year are as high as $150,000. CoinShares’ Butterfill says that political events and expected rate cuts are keeping demand high.
Corporate treasuries and sovereign funds are still buying, and the U.S. House is working on a comprehensive digital asset framework.
On the other hand, the rally has attracted speculators, and whales are cashing in. On-chain signals warn of possible corrections; a price spike that happens too quickly can cause blow-offs like those seen in previous cycles. Regulatory progress could slow down, and macro conditions could get worse.
Bitcoin’s maturity doesn’t mean that volatility will end; it just means that the people who move the market will be different.
The most important thing for investors to remember
The rise to $120,000 is not a fluke, and it’s not just a meme-driven frenzy. It shows how bitcoin has become a quasi-institutional asset that is connected to macroeconomics, politics, and corporate finance.
But the same things that are pushing it higher institutional FOMO, government policy, whale behaviour, and macro shock therapyalso have the potential to make it unstable.
Investors should be happy that the market has matured, but they should not get too comfortable. In the world of digital assets, fortunes are made when the crowd looks the other way, and history shows that surprises, both good and bad, are never far behind.
