Bitcoin has reached unprecedented levels, surging to a new all-time high and approaching the $112,000 milestone, as the broader cryptocurrency market experiences a significant upswing. On Friday, Bitcoin topped $118,000, surpassing the previous day's record. Earlier in the day, it hit $118,755 before settling to around $117,800. This surge reflects increasing acceptance by companies as a reserve asset and the passage of pro-crypto legislation.

Market Performance and Key Drivers

Bitcoin has risen by more than a quarter this year, outperforming the S&P 500's 7% increase and surpassing the gains of AI leader Nvidia. The cryptocurrency's market capitalization has exceeded $2.3 trillion, surpassing tech giants like Alphabet (Google) and Meta, though still a fraction of gold's $22 trillion market cap.

Several factors contribute to this rally:

• Institutional Adoption: Increased demand from institutional investors seeking to add Bitcoin to their treasury portfolios and ETFs has fueled the surge. US spot Bitcoin ETFs saw $1.18 billion in net inflows as of Thursday, marking their sixth straight day of gains. BlackRock's IBIT led with $448.5 million in inflows.
• Legislative Optimism: Favorable regulatory policies, such as President Trump establishing a strategic Bitcoin reserve and the Senate passing the GENIUS Act to enable private companies to issue stablecoins, have boosted the crypto market.
• Macroeconomic Factors: Expectations of potential interest rate cuts by the Federal Reserve have increased investor risk appetite, benefiting alternative assets like Bitcoin. A weakening U.S. dollar has also made the cryptocurrency more attractive.
• Geopolitical Tensions: Renewed geopolitical tensions after President Trump reignited his aggressive trade policies, slapping tariffs on imports, also contributed to the surge.

Altcoin Performance

The broader crypto market has also seen significant gains. Ether (Ethereum) has risen and is trading near $3,000. Most altcoins also surged, tracking optimism around Bitcoin's record run.

Expert Perspectives

Gadi Chait, head of investment at Xapo Bank, noted that Bitcoin has shattered expectations, evolving from a subdued trading range into a full-blown surge. He emphasized the fever-pitch institutional accumulation and the stability of these inflows amidst macroeconomic uncertainty and geopolitical tensions. Anthony Pompliano, founder and CEO of Professional Capital Management, stated that Bitcoin becomes less risky as it grows in size, making it suitable for almost every capital allocator.

Future Outlook

A recent survey of 22 experts by Finder revealed an average forecast of $145,167 for Bitcoin by the end of 2025. Kadan Stadelmann, chief technology officer at blockchain firm Komodo Platform, anticipates Bitcoin going significantly higher before the end of 2025. From a technical analysis perspective, Bitcoin's breakthrough above $112,000 represents a significant milestone. If exceeded, the next technical upside target would be $122,056.92. Investors should watch major support levels around $107,000 and $100,000 during retracements.