Why is BTC still rising? On-chain data provides the answer

Question

Anyone who’s been checking the markets lately has definitely noticed—BTC has been on a relentless rally since the start of the year, recently breaking through $84K, and now the $100,000 milestone is within reach. But a lot of people are still confused: What’s really driving this bull run? Is it just another round of retail FOMO? Or are there deeper reasons behind it?

Let’s break down the hard logic behind BTC’s surge.

Four Key Drivers Powering BTC’s Rise

1. Supply Side: A Rule That Never Changes

BTC’s core advantage is simple: There will only ever be 21 million coins—forever unchanged. This isn’t some market-driven decision; it’s hard-coded and can’t be altered by anyone.

The real kicker: The 2024 halving in April. Mining rewards for miners were slashed from 6.25 BTC to 3.125 BTC overnight. In other words, new supply was cut in half.

Over 19.6 million BTC have already been mined, with only 1.5 million left. That means the circulating supply is shrinking fast, creating natural supply pressure—so when demand rises, price has every reason to go up.

2. Institutional Buying: From Zero to One

The biggest difference in this cycle is that institutions are genuinely here.

After the US SEC approved spot BTC ETFs in January 2024, BlackRock’s iShares Bitcoin Trust sucked in $8.6 billion, becoming one of the fastest-growing ETFs. Combined BTC+ETH ETF inflows have topped $13 billion.

MicroStrategy (via its subsidiary Strategy) is even crazier—they’re holding 582,000 BTC worth $62 billion, and they’re still buying, raising another $584 million earlier this year to keep accumulating.

244 publicly traded companies now list BTC on their balance sheets. Two years ago, this was unimaginable.

3. Regulatory Environment: From Frozen to Thawing

The US “Crypto Week” recently saw Congress pushing several crypto-friendly bills—the CLARITY Act, anti-CBDC surveillance laws, and more. The signal is clear: The government’s attitude is softening.

Institutional investors used to fear regulatory uncertainty most. Now, with clear rules for ETFs and supportive policies, pension funds and insurance companies that previously avoided BTC can enter the market openly.

4. Macro Economy: Inflation Fears Fueling Safe-Haven Demand

Global central banks are printing money like crazy, and traditional currencies are devaluing. Investors looking at the US dollar are starting to think—they need a store of value.

BTC’s supply is fixed and can’t be diluted by central banks. This feature is especially attractive in an inflationary environment. With the dollar looking shaky lately, hot money is flowing into digital assets.

Historical Patterns: This Bull Run Is Different from the Last

Looking back at previous BTC bull markets:

2013-2017: Pure retail FOMO speculation, eventually crashing from over 9,000 to 3,500
2020-2021: Institutions started to enter, but still mixed with lots of retail leverage
2024-2025 (now): Institutional-led, clear regulations

This time, institutions have more influence, which means:

Volatility may be less intense (institutions prefer steady rises)
The foundation is more solid (not just pure FOMO) )
During pullbacks, there’s support (big players won’t let it crash)

But That Doesn’t Mean It’ll Go Up Forever

Here’s the key: BTC is a volatile asset. Even with so many positive factors, a 20-50% correction is entirely possible. This is called a “normal pullback in a strong market.”

Specific risks:

If institutions suddenly turn bearish, ETFs could see major redemptions
Geopolitical shifts could send safe-haven money elsewhere
Aggressive Fed policy changes could pressure risk assets

Smart Ways to Invest

1. Dollar-Cost Averaging, Not All-In

Buy a little every week or month, instead of chasing every pump. This averages out your cost and keeps you calmer.

2. Take Profits in Stages

If BTC doubles, sell 10%. This way, you lock in profits without missing out on future gains.

3. Portfolio Diversification

No matter how strong BTC rallies, don’t let it take up more than 30-40% of your portfolio. Leave room for other assets.

4. Hedge Risk with Derivatives

You can buy downside protection (put options), or use futures to hedge excess exposure. But this is for those with experience.

Bottom Line: Clarity Brings Peace of Mind

BTC’s current rally is justified—it’s not just hype. But having good reasons doesn’t mean it’ll keep going up forever.

The rational way to invest:

✓ Understand the logic (supply scarcity + institutional demand + regulatory tailwinds)

✓ Recognize the risks (regulatory shifts, macro changes, market sentiment reversals)

✓ Set rules (take profits and stop-loss, use leverage prudently)

✓ Hold for the long-term (this is a decade-long game, not a one-month gamble)

When you buy BTC on Gate now, ask yourself: Is this an investment or a gamble? Only those who can answer that question will truly profit from this bull run.