Bitcoin has once again shattered expectations, surging to an all-time high of $118,872.85 early Friday morning as institutional investors piled into cryptocurrency exchange-traded funds (ETFs) at a record pace. The flagship digital asset was last trading around $117,955.25, up nearly 4% on the day, according to Coin Metrics.
The rally, which reignited after Wednesday’s Federal Reserve minutes hinted at potential shifts in monetary policy, marks the first new record for bitcoin since May 22 and adds further momentum to what has already been a historic year for digital assets.
The spark behind the latest rally came from Thursday’s ETF data, which showed $1.18 billion in net inflows into Bitcoin ETFs — the largest single-day total of 2025, according to data from SoSoValue. Simultaneously, Ether ETFs pulled in $383.1 million, their second-highest day of inflows ever.
“This is a clear sign that institutional confidence in crypto is accelerating,” said Markus Thielen, CEO of 10x Research. “Bitcoin’s surge is being driven not by retail hype, but by professional money managers allocating large sums via regulated vehicles.”
Thielen also noted that incoming monetary policy decisions — especially the potential departure of Federal Reserve Chair Jerome Powell — have encouraged investors to lean bullish. “It’s expected that whoever leads the Fed next will be more dovish,” he said, referring to recent Trump administration hints about Powell’s job security.
Traders are increasingly pricing in the possibility of a rate cut later this year. The minutes from the Fed’s latest meeting showed a split among policymakers, with some leaning toward easing rates to support economic growth, especially amid rising concerns over the ballooning federal deficit.
The proposed "One Big Beautiful Bill Act" — a large-scale fiscal stimulus plan expected to further expand the deficit — is seen by crypto bulls as a tailwind for bitcoin, which many view as a hedge against fiat currency debasement.
“There’s a structural macro narrative that supports bitcoin here,” Thielen said. “As the budget deficit expands and dovish policies gain favor, it strengthens the case for bitcoin as a hard asset.”
Adding fuel to the fire, the sharp rally triggered a massive short squeeze. Over the past 24 hours, $550 million in bitcoin short positions were liquidated, alongside $195 million in ether shorts, according to data from Coinglass.
When short-sellers are forced to cover their positions, they must buy back the asset — in this case, bitcoin — contributing to rapid price spikes.
“This is classic momentum-driven covering,” said a senior derivatives analyst at a Wall Street crypto trading desk. “Once key resistance broke above $114K, it triggered automated liquidations that catapulted us into price discovery territory.”
Ether (ETH), the second-largest cryptocurrency by market cap, also joined the party, surging 6% on the day and over 21% on the week, reclaiming the $3,000 level for the first time since February.
“Institutions are not only rotating into bitcoin,” said the analyst. “They’re using ETFs to diversify into the Ethereum ecosystem as regulatory clarity improves and Ethereum’s role in financial infrastructure becomes more widely accepted.”
While bitcoin is on pace for a nearly 10% weekly gain, its best week since late April, some traders are urging caution ahead of a typically quiet summer period.
“Macro events tend to slow down during the summer,” Thielen noted. “Long-only equity investors also start de-risking around this time, so momentum might stall unless we get a major catalyst.”
That catalyst could come at the Federal Reserve’s policy meeting at the end of July, where markets will be looking for signs of a dovish pivot or confirmation of Powell’s future.
Since April 17, when ETF inflows began to sharply accelerate — coinciding with Trump’s public questioning of Powell’s leadership — total inflows into bitcoin ETFs have reached nearly $16 billion, underscoring the scale of institutional participation.
