Why Does Bitcoin Keep Breaking Records? Unraveling the Drivers of the Bull Rally

Question

Bitcoin just surpassed $120,000 and shows no signs of slowing down. But behind these astronomical numbers is a convergence of forces that go far beyond simple FOMO. Here we break down what’s really happening.

The Perfect Equation: Scarcity + Institutional Money

First, the basics. Bitcoin has a hard cap of 21 million coins. Period. 19.6 million have already been mined, which means only about 1.5 million are left to be created. When supply is fixed and demand explodes, the math is simple: prices go up.

But the April 2024 halving was the accelerator. It cut new BTC issuance in half (from 6.25 to 3.125 BTC per block), creating an artificial bottleneck. Miners produce less bitcoin just as big investors want to buy more. That’s textbook bullish.

The Institutional Factor That Changed Everything

Here’s the big one: the approval of Bitcoin ETFs in 2024 opened the door to investors who never before could touch crypto without complications. BlackRock’s iShares Bitcoin Trust already manages over $86 billion. Just this year, Bitcoin ETFs have received more than $13 billion in inflows.

Translation? “Serious” money is entering Bitcoin, not just retail traders on Discord.

And look at this: MicroStrategy (Strategy) already holds 582,000 BTC (~$62 billion). More than 244 companies hold Bitcoin on their balance sheets. That used to be unthinkable. Now it’s the norm.

The Numbers Don’t Lie

19.6 million BTC mined vs. only 1.5 million left to be created
Bitcoin ETFs under management: >$158 billion
Corporations with BTC in treasury: 244 and counting
Net ETF inflows in 2024-2025: $13+ billion

Stronger Network, Clearer Future

There’s also the technical side. The Lightning Network makes Bitcoin practical for instant, cheap payments. The network hashrate is at all-time highs, meaning more security, less risk of attack. That builds trust.

Plus, the regulatory environment has improved a lot. The “Crypto Week” in the US Congress pushed favorable laws forward. Regulators have changed their tone: from “we ban crypto” to “how do we regulate this properly.” That removes a lot of uncertainty.

Market Psychology: FOMO vs. Fundamentals

Sure, there’s FOMO. When you see BTC up 50% in months, the temptation to get in is strong. But this rally is different from previous cycles:

2013-2017: Pure speculation, ended in an 80% crash
2020-2021: First institutions entered, then a correction
2024-2025: Massive institutional adoption + clear regulation + programmed scarcity

This time, there are fundamentals beneath the hype.

Macroeconomic Context: Your Dollar Is Worth Less

Central banks keep printing money. Inflation hasn’t gone away. In that context, Bitcoin works as a hedge: its supply can’t be devalued by political decisions. That makes it attractive when confidence in fiat currencies wavers.

Low interest rates also help. If your money in the bank earns 0.1% annual interest, Bitcoin with 50%+ potential return moves up the priority list.

What Does All This Mean?

Bitcoin keeps rising because:

Its scarcity is mathematically guaranteed
The big players (funds, corporations) are accumulating
Legal/regulatory barriers have disappeared
The network is more secure than ever
The macroeconomic outlook favors assets without devaluation risk

But remember: Bitcoin is still volatile. Corrections of 20-50% during bull markets are normal. Trends are not guarantees.

The Smart Strategy

If you get in now:

Don’t go all in at once (average your entry)
Have a plan to take profits
Don’t forget this is speculative, even if it’s “respectable” now
Keep your portfolio diversified

The Bitcoin rally is real. The fundamentals are solid. But volatility is also real. Enter with your eyes open.