Mix cake mix and 1 1/4 cup Champagne in a large mixing bowl; stir in vegetable oil and eggs. Beat batter with an electric mixer on medium speed for 2 minutes.
Pour batter into the prepared muffin cups, filling them 3/4 full.
Bake cupcakes in the preheated oven until a toothpick inserted into the middle of a cupcake comes out clean, about 20 minutes.
Cool cupcakes in pans for 10 minutes before removing to finish cooling, about 30 more minutes.
Mix butter, 1 cup confectioners' sugar, 1/4 cup Champagne, and vanilla extract in a bowl. Stir in remaining confectioners' sugar, 1 cup at a time, until frosting is smooth and creamy. Spread on cooled cupcakes.
