Bitcoin has experienced a period of remarkable volatility over the past two days, repeatedly establishing new record highs, even surpassing the $118,000 mark yesterday. For perspective, the value of bitcoin a year ago was $57,388, highlighting an increase of more than 100%.
Early Friday trading saw Bitcoin peaking at $118,667. This surge prompted enthusiastic reactions from proponents like Michael Saylor of Strategy, who conveyed his excitement on social media platform X, stating, “The halls of eternity echo with the cries of those who sold their Bitcoin.”
Several factors have fueled this upward trend:
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Substantial inflows from institutions. BlackRock’s iShares Bitcoin Trust exceeded $80 billion in assets yesterday, becoming the “fastest ETF to reach this milestone in 374 days,” according to Bloomberg analyst Eric Balchunas, who remarked on the achievement.
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Positive regulatory developments. The U.S. House of Representatives has designated the week of July 14th as “Crypto Week,” during which legislators will deliberate on the CLARITY Act and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. The Senate approved the GENIUS Act last month. Enactment of this bill could signify a turning point for the cryptocurrency sector. “The regulatory shift in Washington has unlocked institutional demand that had been suppressed for years, awaiting regulatory certainty,” explained Les Borsai, cofounder of Wave Digital Assets, in a statement to Sherwood News.
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Significant short covering. Robert Harrington, who heads crypto and digital assets at Cantor, pointed out that Bitcoin’s breaching of previous highs is forcing short sellers utilizing perpetual futures to liquidate their positions. He explained, “This liquidation event functions simply as a market order, thereby accelerating Bitcoin’s price appreciation.”
Alice Liu, Head of Research at CoinMarketCap, echoed Harrington’s view, noting that a major short squeeze had catalyzed and magnified the recent price surge over a short timeframe.
“This pattern of forced buying often speeds up momentum, especially in markets where trading activity is thin, explaining what we observed,” she stated.
Data provided by CoinGlass indicates that over $2 billion in short positions were closed out on July 10th, representing “the largest short liquidation event in four years.”
Nic Puckrin, the founder of Coin Bureau, highlighted another aspect: Bitcoin has exhibited resilience amid geopolitical instability, reinforcing its appeal as a “safe haven” asset.
“The new all-time high wasn’t unexpected; what is slightly surprising is that it didn’t occur earlier,” Puckrin commented. “The delay primarily stems from uncertainty regarding tariffs, which appears to have extended the current cycle beyond previous ones. Therefore, I don’t anticipate this to be the end of the current run; we will likely see another price correction, followed by a final surge potentially reaching $150,000 during the first or second quarter of next year.”
Harrington mirrored Puckrin’s thoughts, stating, “It’s quite evident that US government spending won’t decrease, and US debt will continue on its upward trend. This is favorable for Bitcoin.” He also agreed that Bitcoin could easily reach $130,000 to $150,000 in the near future, adding that “In reality, these are all small moves.”
Other beneficiaries of this rally include stocks connected to the crypto market, which are also experiencing gains due to Bitcoin’s performance. This includes bitcoin mining companies like MARA Holdings and Riot Platforms, while Strategy saw a 3% increase.