After months of struggling to gain any sort of momentum, Bitcoin (BTC -0.34%) has seemingly turned it around. It recently hit a price of $95,000 — the first time it has done that since February 25. Bitcoin is now up nearly 15% over the past 30 days, and appears ready to retake the $100,000 price level.

So what’s behind this remarkable Bitcoin turnaround? And just how sustainable is it?

Spot Bitcoin ETFs

One major factor has been the return of investor inflows to the spot Bitcoin ETFs. It might sound simplistic, but if money is flowing into the spot Bitcoin ETFs, the price of Bitcoin is likely to go up. And, conversely, if money is flowing out of the spot Bitcoin ETFs, the price of Bitcoin is likely to go down.

That’s why many analysts keep a close eye on numbers reported by the spot Bitcoin ETFs. These numbers are available on a daily and weekly basis, and by studying them closely, it’s possible to glean important insights about where Bitcoin is headed next.

For example, during the peak of tariff uncertainty, the spot Bitcoin ETFs made headlines with their daily outflows. Quite simply, investors were getting out of risky assets, and they wanted out of Bitcoin. So they took money out of the Bitcoin ETFs.

But now, the opposite has been happening. On April 25, for example, nearly $1 billion flowed into a single spot Bitcoin ETF — the iShares Bitcoin Trust (IBIT 0.65%). And, over the week of April 21-25, nearly $3 billion flowed into the spot Bitcoin ETFs.

Change in investor mindset

If you buy into the notion that spot Bitcoin ETF activity is a reliable gauge of Bitcoin price activity, the inevitable question becomes: What has changed in the way investors think about Bitcoin to reverse the outflows?

The answer appears to be that many investors are now viewing Bitcoin as a potential long-term store of value. Instead of viewing Bitcoin as a risky, volatile asset, they are now viewing Bitcoin as a potential hedge against global economic uncertainty.

If money is flowing out of risky assets, it has to go somewhere, right? Until recently, that money appeared to be pouring into gold, which is why gold is currently sitting at all-time highs right now. But now, some of that money appears to be moving into Bitcoin, which has long been referred to as “digital gold.”

Image source: Getty Images.

While it’s open to debate whether Bitcoin really is “digital gold,” the fact remains that Bitcoin has certain properties that are similar to physical gold. It has inherent scarcity. It is global and non-sovereign, meaning that no country or central bank can alter its supply. And it is inherently disinflationary, due to an algorithm that carefully controls how much new Bitcoin can ever be created.

Bitcoin supply shock

There’s one additional factor that appears to be pushing Bitcoin higher: a global supply shock. This is something that the crypto industry has been warning about for months now. Simply put, there’s not enough Bitcoin to go around for everyone who wants to buy it.

There are a number of different ways to think about this global supply shock. The first is by looking at the amount of Bitcoin held by the major cryptocurrency exchanges. Back in February, some analysts began to warn that the amount of Bitcoin held by these exchanges was falling to three-year lows.

This makes sense. If Bitcoin ETFs are buying Bitcoin, they need to buy it from somewhere, and one likely place to do that is via a cryptocurrency exchange. So, conceptually, think of these Bitcoin ETFs as draining the Bitcoin reserves of these exchanges with their massive buying.

In late February, BlackRock (BLK 0.84%) — the company behind the iShares Bitcoin Trust — mentioned a potential Bitcoin supply shock. They framed it in very simple terms: “If every millionaire in the U.S. asked their financial advisor to get them 1 bitcoin, there wouldn’t be enough.”

That’s because the total lifetime of supply of Bitcoin is capped at 21 million coins, and according to proprietary data from BlackRock, approximately 3 to 4 million of these coins have already disappeared from circulation and are “permanently inaccessible.”

Is Bitcoin going higher in 2025?

Putting it all together, it’s easy to see why Bitcoin has regained the $95,000 price level. The spot Bitcoin ETFs are, once again, seeing positive inflows after weeks of outflows. Many investors are now shifting their perception of Bitcoin and embracing it as a potential long-term store of value. And, as more people decide to hoard their Bitcoin for the long haul, they are pulling it out of circulation. As a result, there’s simply less to go around for everyone else.

Based on the above, I’m bullish about Bitcoin for the remainder of 2025. Just keep your eye on the spot Bitcoin ETF numbers — that’s the key to determining just how sustainable this mini-rally is going to be. For now, it looks like Bitcoin has finally turned the corner and could be on its way to zooming past the $100,000 price level.