Bitcoin’s $118K Surge Triggers Record ETF Inflows and Crypto Stock Rally

Bitcoin’s explosive surge toward $118,000 on Friday has triggered massive institutional interest, with Wednesday’s $1.17 billion flood into Bitcoin ETFs marking the second-largest daily inflow on record and demonstrating how cryptocurrency momentum now directly drives traditional market performance.

ETF Inflows Hit Historic Levels

Wednesday’s $1.17 billion inflow into Bitcoin exchange-traded funds marked a watershed moment for institutional crypto adoption. The massive single-day inflow, sparked by Bitcoin’s breakthrough above $111,000 on Wednesday, brings 2025’s cumulative ETF inflows to an estimated $51 billion—underscoring Wall Street’s growing appetite for regulated crypto exposure.

BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Bitcoin ETF (FBTC) led the charge, both gaining over 1.4% as investors rushed to capitalize on the breakout. These aren’t speculative trades—they represent permanent capital allocation decisions by institutional investors, pension funds, and financial advisors who now view Bitcoin as a legitimate portfolio component.

Crypto Stocks Surge Alongside Bitcoin

Strategy (formerly MicroStrategy), the largest corporate Bitcoin holder with nearly 600,000 coins, gained 1.52% as its Bitcoin treasury strategy continued paying dividends. The company’s average Bitcoin cost basis of approximately $66,000 means its holdings generated substantial unrealized gains from the $118,000 peak.

Mining stocks also benefited from Bitcoin’s momentum, though specific performance data for the July surge wasn’t immediately available. The sector has demonstrated consistent correlation with Bitcoin price movements throughout 2025, with companies like MARA Holdings and Riot Platforms typically amplifying cryptocurrency gains.

Wall Street Recognition Accelerates

The surge comes as major investment banks formally embrace Bitcoin in portfolio strategies. Citi’s macro outlook published Friday specifically highlighted Bitcoin’s role in diversified portfolios, noting it “trades more like a physical commodity” with unique interest rate sensitivities compared to gold.

This institutional recognition represents a fundamental shift from Bitcoin’s speculative origins to mainstream asset class status. Unlike previous crypto rallies driven by retail enthusiasm, the current surge reflects institutional participation through established ETF structures and corporate treasury strategies.

Short Squeeze Amplifies Gains

The rally’s velocity was amplified by a massive short squeeze that liquidated $1.01 billion in positions within 24 hours, affecting approximately 237,000 traders. One single position on the HTX platform absorbed an $88 million loss, illustrating the leverage and risk concentration in crypto markets.

These forced liquidations created additional buying pressure as short sellers scrambled to cover positions, accelerating Bitcoin’s upward momentum beyond fundamental drivers.

Policy Tailwinds Support Growth

The Trump administration’s pro-crypto stance continues providing regulatory clarity that institutional investors demanded. The Senate’s passage of the GENIUS Act in June, combined with Trump’s proposed strategic cryptocurrency reserve, has fundamentally altered how institutions evaluate crypto’s portfolio role.

With approximately 130 publicly listed companies now owning 3.2% of all Bitcoin in circulation, corporate adoption has reached critical mass, providing price support and reducing available supply.

As Bitcoin traded near record highs Friday afternoon with 26% year-to-date gains matching gold’s performance, the July 10-11 surge may mark the moment cryptocurrency definitively crossed from alternative asset to mainstream financial component. The record ETF inflows and institutional embrace signal Bitcoin’s permanent integration into traditional investment frameworks.

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