Why Is Bitcoin Going Up? ETF Frenzy Sends Bitcoin to Record $122,000 High - Should You Invest?

Bitcoin has surged to a new all-time high, climbing past $122,000 on Monday, driven largely by renewed interest in exchange-traded funds (ETFs) and increasing institutional investment. According to Coin Metrics, the cryptocurrency peaked at $122,600 at 1:27 p.m. Singapore time.

The rally has been fuelled by significant inflows into Bitcoin ETFs, with last Thursday marking the biggest day of 2025 for ETF investments in the sector, bringing in $1.18 billion. Institutional buyers, rather than retail investors, have been leading the charge, according to market analysts.

'We believe that Bitcoin's surge is driven by longer-term institutional buyers and this will propel it to $125k in the next month or two,' Jeff Mei, Chief Operating Officer at crypto exchange BTSE, told the media.

What's Behind the Latest Price Rally?

According to experts, several factors are contributing to Bitcoin's rise. The most immediate is the popularity of Bitcoin ETFs, which have provided traditional investors with a regulated way to gain exposure to the digital currency. Markus Thielen, CEO of 10x Research, while speaking to CNBC, said that institutional and corporate investors have collectively purchased $15 billion worth of Bitcoin ETFs over the past six to eight weeks.

At the same time, the US is moving forward on regulatory clarity. This week, the House of Representatives is set to review multiple cryptocurrency-related bills, including the Genius Act, which is a proposal that could create legal guardrails for stablecoins and set the stage for private issuance of digital dollars.

This is being welcomed by many in the industry. 'Long-term holders are locking up supply, while global policy clarity, especially around stablecoins and crypto legislation, has boosted investor confidence and capital inflows,' Xu Han, Director at HashKey Capital, told CNBC.

Adding to this momentum is political support from US President Donald Trump. The President has positioned himself as pro-crypto, with his administration backing efforts to regulate the sector in a way that encourages growth. His media group has also filed to launch a crypto-focused ETF.

Supply, Sentiment, and Institutional Adoption

Unlike stocks, Bitcoin is not driven by company earnings or dividends. Instead, price movements are largely dictated by supply and demand. Bitcoin has a fixed maximum supply of 21 million coins. According to reports, public and private funds, ETFs and corporations now hold around 3.5 million bitcoins, which is roughly 17% of the total supply, up from 2.6 million just a year ago.

This tightening supply, coupled with increased demand from institutions, is applying upward pressure on price. BlackRock's iShares Bitcoin Trust alone now holds more than 700,000 BTC, making it one of the largest institutional holders of the asset.

Lukas Enzersdorfer-Konrad, Deputy CEO of Bitpanda, described the rally as being supported by a 'perfect mix' of conditions. 'Liquidity is returning to markets, and investors are looking for assets with real potential, Bitcoin is increasingly seen as one of them,' he said.

Should You Invest in Bitcoin?

The impressive numbers may grab attention, but according to experts, investing in Bitcoin carries considerable risk.

Cryptocurrencies are known for their extreme price volatility, and Bitcoin's sharp gains can just as easily reverse. The Financial Conduct Authority (FCA) has repeatedly warned that crypto investors should be 'prepared to lose all their money.'

Simon Peters, a crypto analyst at eToro, while speaking to Moneyweek, urged caution. 'It's hard not to be optimistic about Bitcoin at this moment in time, but the risk of a fall in price or short-term pullback still exists,' he told the outlet. He also advised potential investors to 'evaluate their time horizon and how long they are prepared to be invested for.'

One approach Peters suggests is dollar-cost averaging, which means investing a fixed amount regularly rather than committing a lump sum to reduce the risk of buying at a peak.

He added, 'Only invest with money that you can afford to lose.'