Bitcoin crosses $111,000 amid ETF inflows, but can the rally hold?

Bitcoin crossed the $111,000 mark for the first time ever, hitting a fresh all-time high and fueling hopes of a continued bull run. But analysts warn the rally may face hurdles ahead.

According to Ryan Lee, Chief Analyst at Bitget Research, Bitcoin's surge has been fueled by institutional demand, a post-halving supply crunch, and growing regulatory clarity. “Spot Bitcoin ETF inflows continue to rise, and the post-halving supply crunch is clearly tightening market dynamics,” he said. With inflation concerns and rate cut expectations still in play, many now see $113,000 as a near-term target by June 2025.

However, Lee warns that Bitcoin’s history suggests caution. “Sharp rallies often invite sharp corrections. A stronger U.S. dollar or renewed geopolitical tensions could easily knock this momentum off course,” he said. Regulatory developments, especially around the GENIUS Act, are expected to play a key role in sustaining investor confidence.

Sumit Gupta, Co-founder of CoinDCX, said Bitcoin’s breakout past its previous high on Bitcoin Pizza Day was backed by a more than 100% jump in volume and strong HODL conviction. “BTC supply on exchanges continues to drop, signaling a potential supply squeeze,” he said. Gupta also noted that Bitcoin futures have hit a new all-time high of $74 billion, likely driven by institutional and hedge fund activity.

Bitcoin’s performance now outpaces traditional assets. With over 53% yearly gains, it has surpassed both gold and the S&P 500 and climbed past Amazon to become the world’s fifth-largest asset, with a market cap exceeding $2.2 trillion.

The latest surge reflects broader market momentum. Spot Bitcoin ETFs have seen more than $2 billion in inflows over the past 10 sessions, while Moody’s recent downgrade of the U.S. sovereign credit rating has boosted interest in Bitcoin and Ethereum as fiat hedges.

The overall crypto market also remained firm. Ethereum rose 1.8% to $2,611, while altcoins like Solana, Cardano, and Avalanche gained between 3% and 5%. Bitcoin now commands over 63% of the total crypto market cap.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)