Pour 2 cups of pink champagne into a medium saucepan and simmer over medium heat for 6-8 minutes until reduced to about ¾ cup plus 3 tablespoons. Let cool to room temperature and reserve 3 tablespoons for frosting.
Preheat oven to 350°F (175°C) and line two 12-cup muffin pans with cupcake liners. Ensure all ingredients are at room temperature.
In a medium bowl, whisk together cake flour, baking powder, and salt for 30 seconds. Set aside.
Beat softened butter for 1 minute, then add sugar and beat on medium-high for 3-4 minutes until light and fluffy. Scrape down bowl at least once.
Add eggs one at a time, beating well after each addition. Mix in vanilla extract until combined.
Combine ¾ cup champagne reduction with milk. On low speed, add flour mixture in three additions alternating with champagne-milk mixture in two additions, beginning and ending with flour. Mix just until combined after each addition.
Add 3-5 drops of pink gel food coloring and mix on low speed until evenly distributed.
Fill each cupcake liner about two-thirds full (about 3 tablespoons of batter per cupcake) using an ice cream scoop or large spoon.
Bake for 18-20 minutes until a toothpick inserted in the center comes out clean or with just a few moist crumbs.
Let cupcakes sit in pans for 5 minutes, then transfer to a cooling rack to cool completely (45 minutes to 1 hour) before frosting.
Beat softened butter for 2-3 minutes until creamy. Gradually add powdered sugar 1 cup at a time on low speed, then add reserved champagne reduction, vanilla, and pink food coloring. Beat on medium-high for 3-4 minutes until light and fluffy, adding milk as needed for consistency.
Fit a piping bag with 1M or 2D tip and fill with buttercream. Pipe swirls onto each cooled cupcake starting from outside and working up in a circular motion. Immediately sprinkle with pink pearl sprinkles or sanding sugar.