Bitcoin hits record above 126,000 as ETF flows drive demand

Bitcoin climbed to a fresh record above 126,000 on Monday, extending a rally that has roughly doubled the cryptocurrency's price over the past year and sending trading volumes and flows into Bitcoin products sharply higher. The move reflected a convergence of large institutional demand, constrained on‑exchange supply and broader macroeconomic concerns that analysts say have boosted interest in hard assets.

Spot Bitcoin exchange‑traded funds and other institutional vehicles have been major drivers of flows. Firms managing ETFs and other exchange‑traded products recorded billions of dollars of net inflows in recent days, with some estimates putting weekly ETP inflows in the low single‑digit billions and ETF issuers reported to have acquired more than 4 billion of BTC over a recent five‑day stretch. At the same time, on‑chain trackers recorded substantial withdrawals of stablecoins and thousands of coins by large holders, while exchange Bitcoin reserves fell to multiyear lows, a combination that market participants say tightens available supply and amplifies buying pressure.

Analysts offered differing readings of the move. Several highlighted the so called debasement trade, where...