Bitcoin Hits New Highs: 6 Reasons Why the ETF Rally Could Continue

Bitcoin soared to a new all-time high on July 11, 2025, surpassing $117,000, driven by bullish momentum in risk assets. This rally mirrors the rise of tech giants like NVIDIA NVDA, which recently hit a $4 trillion valuation, highlighting Bitcoin's ongoing correlation with tech.

As the Nasdaq Composite hit record levels and the S&P 500 followed closely behind, Bitcoin also benefitted from favorable policy signals and tightening supply. No wonder, Bitcoin-based exchange-traded fund iShares Bitcoin Trust ETF IBIT is up 15% this year. The fund gained 4.3% past month.

Crypto analyst Nic Puckrin emphasized that Bitcoin normally tracks tech stock performance, and its recent performance reflected a pressure release more than a full-scale bull run, as quoted on Yahoo Finance. Over the past two months, Bitcoin maintained an unusually tight $10,000 range, setting the stage for this breakout.

Crypto Policy Tailwinds: Congress and Regulation

Bitcoin’s breakout also came just before Congress kicked off its “Crypto Week” on July 14, where lawmakers will debate key regulations that could shape the future of the industry. Among them is the GENIUS Act, which aims to establish a federal stablecoin framework, mentioned on the above-mentioned Yahoo Finance article.

A positive outcome from the meeting may boost institutional inflows into Bitcoin, further reinforcing its status as a macroeconomic asset. Shares of Circle CRCL, the issuer of USDC, rose 2% on Thursday and are now up more than 500% since their June 5 IPO. Trading platforms like Robinhood HOOD and Coinbase COIN also saw gains.

Bitcoin as a Resilient Hedge Amid Market Turmoil

While the SPDR S&P 500 ETF Trust SPY gained 7% this year, Bitcoin gained 26.4% (as of July 11, 2025), showing strength amid tariff-led uncertainty. Federal Reserve Chair Jerome Powell has referred to Bitcoin as “virtual and digital gold,” while investor Ray Dalio recommended investing in hard assets like Bitcoin to weather potential debt crises (read: Is Bitcoin the Digital Gold? ETFs in Focus).

Inflation and Bitcoin’s Limited Supply

Bitcoin is widely seen as a hedge against inflation, thanks to its fixed supply cap of 21 million coins. As governments ramp up fiat issuance and Trump’s import tariffs may raise inflation globally, Bitcoin’s scarcity may help it retain value better than traditional currencies.

Corporate and Institutional Bitcoin Adoption Expands

Once led by MicroStrategy MSTR, corporate Bitcoin adoption is spreading. Companies like GameStop GME, Semler Scientific, and Rumble RUM have started adding Bitcoin to their balance sheets, creating increased demand and institutional credibility.Goldman Sachs, one of the world's largest investment banks, significantly increased its Bitcoin exchange-traded fund (ETF) holdings in early 2025 (read: Goldman Sachs Expands Bitcoin ETF Holdings: Should You?).

Rate Cuts Could Favor Risk-On Assets Like Bitcoin

Despite recent hawkish tones, signs point to potential rate cuts later this year. Fed Governor Christopher Waller, a potential candidate to succeed Powell, stated that the Fed might consider a rate cut in July, arguing the inflation effects from tariffs are likely temporary.

Other Fed officials like Mary Daly and Michelle Bowman also leaned toward dovish stances, with calls for up to two cuts this year. Trump has consistently advocated for rate cuts, stating the Fed should “rapidly lower the rate.”Lower rates normally favor risk-on assets like Bitcoin by reducing the opportunity cost of holding non-yielding assets.

Bitcoin Miners Pivot to AI Infrastructure

Bitcoin miners like Bitfarms are evolving. Originally focused on mining, they are now leveraging their power-dense data centers to tap into the booming AI infrastructure market. CEO Geoff Morphy explained that AI-related data centers are more profitable, often trading at 20–30x earnings, compared to 3–5x for Bitcoin mining companies (read: Crypto ETFs in Focus as Bitcoin Mining Boosts AI Infrastructure).

As NVIDIA's dominance in AI grows, so does the need for scalable infrastructure. Bitcoin miners, known for building massive facilities, are well-positioned to meet AI’s rising energy and space demands. Morphy emphasized that companies like Bitfarms offer the scale and energy understanding necessary for the next generation of AI computing.

Safe Bitcoin ETFs for Risk Averse Investors

Issuers have introduced various tools to make a high-risk asset like Bitcoin more accessible and appealing to risk-averse investors. Calamos, has launched a suite of Bitcoin buffer ETFs: Bitcoin Structured Alt Protection ETF – January CBOJ, Bitcoin 90 Series Structured Alt Protection ETF – January CBXJ and Bitcoin 80 Series Structured Alt Protection ETF – January CBTJ.

Innovator also launchedthe Uncapped Bitcoin 20 Floor ETF - Quarterly QBF, the first ETF offering uncapped exposure to Bitcoin’s upside potential while simultaneously capping downside losses. These products some downside protection amid extreme volatility.

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This article originally published on Zacks Investment Research (zacks.com).

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