In an astonishing turn of events, Bitcoin has soared from around $27,000 in late 2023 to a record-breaking $110,000 by May 2025. Once dismissed as a volatile digital experiment, Bitcoin now sits comfortably at the centre of global financial discourse. But what exactly is behind this dramatic rise?
This article explores the key factors that have driven Bitcoin’s bullish momentum over the past 18 months.
1. The Trump Administration’s Embrace of Bitcoin
One of the most defining moments for Bitcoin came with the re-election of Donald Trump as U.S. President in November 2024. Unlike previous administrations, Trump’s government took an unprecedented pro-Bitcoin stance. In a bold move, Trump signed an executive order in March 2025 to establish a Strategic Bitcoin Reserve—a government-held digital asset vault akin to the nation’s gold reserve.
The reserve is being stocked with Bitcoin seized by the U.S. Treasury in past criminal investigations, transforming previously dormant assets into geopolitical tools. This formal governmental endorsement has drastically altered public and investor perception, painting Bitcoin not just as an asset but as a national interest.
2. Institutional Investment and Spot Bitcoin ETFs
Institutional adoption took another giant leap forward when the U.S. Securities and Exchange Commission (SEC) approved several spot Bitcoin ETFs in early 2024. Unlike futures-based products, these ETFs directly purchase and hold Bitcoin, providing investors exposure to the actual asset.
Financial giants like BlackRock, Fidelity, and VanEck quickly entered the market, leading to massive inflows of capital. Pension funds, family offices, and traditional hedge funds soon followed, creating a new wave of demand that pushed Bitcoin’s price skyward.
The convenience and regulatory clarity provided by these ETFs made Bitcoin accessible to a much broader investor base, fuelling its mainstream legitimacy.
3. Corporate Accumulation: Strategy (Formerly MicroStrategy) Leads the Way
Perhaps no company embodies corporate belief in Bitcoin like Strategy, formerly known as MicroStrategy. The business software firm-turned-Bitcoin-accumulation machine now holds over 580,000 BTC, accounting for about 2.7% of all Bitcoin that will ever exist.
This aggressive accumulation has had a twofold effect: tightening market supply and encouraging other companies to consider adding Bitcoin to their balance sheets. Strategy’s public advocacy and success have added a corporate stamp of approval to Bitcoin, further fuelling market optimism.
4. The 2024 Bitcoin Halving: Scarcity Effect Intensified
Bitcoin’s built-in deflationary mechanism—the halving—occurred in April 2024. This event slashed miner rewards from 6.25 BTC to 3.125 BTC per block, reducing the rate of new Bitcoin entering circulation.
Historically, halving events have preceded major price increases, and 2024 proved no different. The reduction in supply coincided with rising demand from institutions, governments, and retail investors, setting the stage for a supply crunch that pushed prices up significantly.
5. Macroeconomic and Geopolitical Drivers
Bitcoin’s rise hasn’t occurred in a vacuum. Global macroeconomic forces have played a critical role:
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Currency devaluation in several countries has led citizens to seek refuge in Bitcoin.
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High inflation in Western economies has renewed interest in alternative stores of value.
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Trade tensions and geopolitical uncertainty have increased the appeal of non-sovereign, decentralised assets.
In this context, Bitcoin has emerged as “digital gold” for the 21st century—an inflation hedge, a geopolitical buffer, and a speculative growth asset all at once.
6. Retail Resurgence and Cultural Momentum
While institutions have dominated headlines, retail investors have re-entered the market en masse. Platforms like Coinbase, Binance, and even newer apps like Strike have seen a resurgence in new signups.
Social media platforms like TikTok, Twitter (now X), and YouTube are once again brimming with Bitcoin content, from investment tutorials to success stories. The cultural cachet of owning Bitcoin has returned, especially among younger investors, pushing adoption to record levels.
7. Scarcity and the Psychology of FOMO
With just 21 million BTC ever to be mined—and over 19.7 million already in circulation—scarcity is no longer theoretical. Institutional hoarding, governmental interest, and dormant wallets have made the available float of Bitcoin smaller than ever before.
This has led to widespread FOMO (fear of missing out), particularly as prices crossed symbolic thresholds: $50,000, then $70,000, and eventually $100,000. Each milestone has been accompanied by media frenzy, which in turn drives more speculative buying.
Conclusion: Bitcoin, A New Financial Era?
Bitcoin’s rise over the past 18 months reflects far more than market speculation. It’s the result of a convergence of political endorsement, institutional adoption, macroeconomic instability, and psychological market forces.
While skeptics still warn of bubbles and volatility, it’s clear that Bitcoin is no longer on the financial fringe. Whether it’s held by hedge funds, governments, or retail investors, Bitcoin has become a global financial force.
As we look ahead, the question is no longer if Bitcoin will shape the future of finance—but how much of that future it will dominate.
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