Bitcoin reaches its highest price in just 60 days. Three reasons behind the rally.

After several months of hard work, Bitcoin (Encryption: BTC) It seems to have turned it around. It recently hit $95,000, the first time it has been completed since February 25. Bitcoin has now risen nearly 15% over the past 30 days and seems ready to regain the $100,000 price level.

So what is behind this extraordinary Bitcoin turnover? And how sustainable is it?

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One major factor is the inflow of investors into spot Bitcoin ETFs. This may sound simple, but if money flows into the spot Bitcoin ETF, the price of Bitcoin may rise. And, on the contrary, if money flows out of the Bitcoin ETF, the price of Bitcoin may fall.

That's why many analysts are closely following the numbers reported by spot Bitcoin ETFs. These numbers are available daily and weekly, and by studying them carefully, you can gather important insights on where Bitcoin is next.

For example, during the peak of tariff uncertainty, the daily outflow of Bitcoin ETFs made headlines. In short, investors get rid of risky assets and they want to get rid of Bitcoin. So they took out money from the Bitcoin ETF.

But now, the opposite has happened. For example, on April 25, nearly $1 billion flowed into a Bitcoin ETF- ishares Bitcoin Trust (Nasdaq: Will Go). Moreover, in the week from April 21 to 25, nearly $3 billion flowed into the spot Bitcoin ETF.

If you think spot Bitcoin ETF activity is a reliable Bitcoin price activity, the inevitable question becomes: what changes have happened to investors consider in the way Bitcoin reverses outflows?

The answer seems to be that many investors now see Bitcoin as a potential store of value. Instead of seeing Bitcoin as a risky, turbulent asset, they see Bitcoin as a potential hedge to global economic uncertainty.

If money goes out of risky assets, it has to go somewhere, right? Until recently, the money seemed to have poured into gold, which is why gold is currently at its all-time high. But now, some of that money seems to be entering Bitcoin, long known as "digital gold."

Gold Bitcoin pile.
Image source: Getty Images.

While debating whether Bitcoin is really “digital gold,” the fact remains that Bitcoin has certain characteristics similar to physical gold. It has inherent scarcity. It is global and non-supervised, meaning no country or central bank can change its supply. Since the algorithm carefully controls how many new bitcoins can be created, it is essentially disbanded.

There seems to be another factor that seems to make Bitcoin higher: the global supply shock. This is something the crypto industry has been warning of for months. In short, for everyone who wants to buy, there is not enough Bitcoin to walk around.

There are many different ways to think about this global supply shock. The first is to look at the amount of Bitcoin held by the major cryptocurrency exchange. Back in February, some analysts began warning that the number of bitcoins held by these exchanges fell to three-year lows.

This makes sense. If a Bitcoin ETF buys Bitcoin, they need to buy it from somewhere, and one possible place is through cryptocurrency exchange. Conceptually, these Bitcoin ETFs are considered as Bitcoin reserves that consume these exchanges through large purchases.

Late February Black Stone (NYSE: BLK) - The company behind Ishares Bitcoin Trust mentioned the potential Bitcoin supply shock. They framed it in a very simple way: “If every millionaire in the United States asked their financial advisers to get them 1 bitcoin, that wouldn’t be enough.”

This is because the total lifetime limit of the Bitcoin supply is 21 million coins, and according to BlackRock's proprietary data, about 3 to 4 million of these coins have disappeared from the loop and are "permanently inaccessible."

Putting it all together, it's easy to see why Bitcoin regains its $95,000 price level. After several weeks of outflow, the spot Bitcoin ETF saw a positive inflow again. Now, many investors are shifting their views on Bitcoin and using it as a potential long-term store of value. And, as more and more people decide to hoard Bitcoin for a long time, they pull it out of circulation. As a result, everyone else has something less.

Based on the above, my opinion on Bitcoin for the rest of 2025. As long as you focus on Bitcoin ETF numbers - that's the key to determining the sustainability of this mini-group. For now, it looks like Bitcoin has finally turned around and is likely scaling over the $100,000 price level.

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Dominic Basulto has a position in Bitcoin. Motley fool has a place and recommends Bitcoin. Motley Fool has a disclosure policy.

Bitcoin reaches its highest price in just 60 days. Three reasons behind the rally. Originally published by Motley Fool