Bitcoin sets new record — why the price is soaring

The global cryptocurrency community witnessed a historic event when the Bitcoin rate reached a record high of $121,344. This marks the first time the symbolic threshold of $120,000 has been surpassed, representing a 30% increase since December 2024.

According to Bloomberg, the rise in the price of the first cryptocurrency comes amid a general increase in investors' appetite for risk. It's not just cryptocurrencies — there is also a positive trend in the stock market.

Stocks, ETFs, and tokens are showing synchronized growth, indicating a broader economical basis for these changes.

Investor optimism pushed bitcoin to a record high

The main driver of the current upswing was the expectations of institutional investors, in particular, the intensification of investments in spot ETFs on bitcoin and Ethereum. These funds, which were authorized to launch in the United States in early 2025, are now forming a significant part of the demand.

"This shift signals a maturing perspective on Bitcoin — not merely a speculative asset, but a macro hedge and a structurally scarce store of value," said George Mandres, senior trader at XBTO Trading LLC.

Other popular cryptocurrencies are also growing alongside bitcoin. For example, Ether added 1.5%, XRP and Solana — 2.7% each. This further supports the overall positive trend in the crypto market.

The role of Cryptocurrency Week in the US Congress

"Cryptocurrency Week" in the US Congress was a major factor in the surge of Bitcoin. Hearings are expected in mid-July to consider and potentially vote on new legislation aimed at streamlining cryptocurrency regulation in the country.

The expectation of transparent rules, legalization, and government support contributes to growing confidence in crypto assets. This is especially important for large investors who do not want to take risks in an unstable legal environment.

Exchange-traded funds boost demand for cryptocurrencies

Amid these developments, the demand for cryptocurrencies is growing - especially through exchange-traded funds that allow investors to invest in bitcoin and Ethereum without having to directly hold or buy the tokens themselves.

"While short-term profit booking can be expected, "the uptrend has fuel" driven by strong demand from exchange traded funds" said Rachael Lucas, a crypto analyst at BTC Markets.

She predicts further growth of the exchange rate to $125,000 in the short term if the market situation remains stable and regulatory support increases.

Some analysts doubt the sustainability of the trend

Not all experts share the euphoria surrounding the new high. Some see it as a short-term reaction to local events, not the beginning of a long-term bullish trend.

"In my view, this isn’t a macro-driven rally, but rather an isolated event. That said, recent US policy developments such as fiscal expansion and expectations of further monetary easing have created a backdrop that is undeniably favorable for Bitcoin," said Nicolai Sondergaard, a research analyst at Nansen

This approach suggests that investors should proceed with caution, assessing both market conditions and political signals.

Will bitcoin surpass $125,000 in the near future?

Bitcoin is currently showing noticeable volatility, though the general trend remains upward. The key question for the market is whether the token can stay above $120,000.

Much depends on the results of Cryptocurrency Week, the US Federal Reserve's decisions on the discount rate, and further actions by institutional investors.

If favorable news emerges, we can expect an attempt to gain a foothold above $125,000, as some traders predict. However, any market-disappointing news or uncertainties can quickly bring the rate down.

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