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Bitcoin (BTC) has experienced a remarkable surge in 2025, soaring over 25% and reaching unprecedented heights above $122,000. According to Fortune, this rally has been driven by investments from Wall Street, particularly through Bitcoin exchange-traded funds (ETFs), which have attracted $85 billion over the past year.
Traditional Finance Boosts Bitcoin
The influx of traditional capital not only bolsters Bitcoin’s price but also appears to be stabilizing its notorious volatility, a trend highlighted by Deutsche Bank’s recent research.
As traditional financial markets recover from earlier lows, the S&P 500 has risen 6.58% year-to-date. However, this pales in comparison to Bitcoin’s gains, which reached new record highs on Monday.
Interestingly, Bitcoin achieved this milestone with lower volatility than has historically been the case. Deutsche Bank analysts Marion Laboure and Camilla Siazon attribute this stability to a combination of factors, particularly the influx of cash from the traditional finance sector.
They noted that 2024 saw $35 billion in inflows from new Bitcoin exchange-traded fund, with an additional $50 billion flowing in this year alone. A notable spike occurred just last Thursday, when $1.17 billion was invested in US Bitcoin ETFs in a single day.
BlackRock’s iShares Bitcoin Trust has significantly contributed to this trend, amassing $80 billion in just 18 months—an accomplishment that took the SPDR Gold Shares exchange-traded fund 15 years to achieve.
Emerging ‘De-Dollarization’
Another crucial element driving Bitcoin’s ascent is the declining value of the US dollar. The dollar has depreciated nearly 10% against other currencies this year, prompting investors to seek alternative stores of value.
With the recent passage of a tax bill that locks in fiscal deficits of 6.5% to 7% of gross domestic product (GDP), a trend towards “de-dollarization” is emerging. This shift has led investors to consider assets like gold and Bitcoin as viable alternatives.
As markets prepare for the day ahead, a Consumer Price Index (CPI) update is scheduled for 8:30 a.m. ET, with analysts anticipating a rise from the current inflation rate of 2.4% to 2.7%. In premarket trading, S&P 500 futures were up 0.31%, while the index itself gained 0.65% yesterday.
Global markets showed positive movement, with Hong Kong’s Hang Seng index rising 1.6% and Japan’s Nikkei 225 increasing by 0.55%. Meanwhile, Europe’s Stoxx 600 added 0.3%, and the UK’s FTSE 100 remained flat but is on the verge of breaking the 9,000 mark for the first time.
As of this writing, BTC has attempted to consolidate between $118,000 and $119,000, close to the current record for what could be a new price discovery phase for the market’s leading crypto.
Featured image from DALL-E, chart from TradingView.com
