Though much of uncertainty still exists, the bitcoin market has had an amazing year and market players are hopeful about the possibilities for 2025 as a new government takes over Washington D.C.
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Early in the year, Bitcoin (BTCUSD) surged under explosive demand from recently launched spot bitcoin exchange-traded funds (ETFs). Shortly after, a bitcoin halving—which slowed the rate of new bitcoin generation—generated a demand-supply mismatch that drove prices skyrocketing.
The election of Donald Trump and some crypto-friendly legislators gave bitcoin another boost in recent weeks, enabling the digital currency to cross the $100,000 price point for the first time.
The following is what market players should be alert for in next year.
Trump's intentions for crypto regulation?
The lack of clarity around rules and the U.S. Securities and Exchange Commission's (SEC) enforcement strategy has been one of the main issues of worry in the crypto market recently.
Trump promised the bitcoin and crypto sectors a lot on the campaign trail, including that he would create a "Strategic National Bitcoin Stockpile" and fire SEC Chair Gary Gensler on day one of his administration. Gensler chose to resign; Trump has suggested crypto advocate Paul Atkins to lead the agency.
There is no guarantee they will get what they need or when even as markets await regulatory clarity.
Delphi Ventures General Counsel Sarah Brennan told Investopedia "Trump's posture on [decentralized finance (DeFi)] and crypto has been somewhat inconsistent." "While he expresses interest in the space, much of his focus seems limited to supporting dollar dominance and real estate applications." Recently reaching new highs, the Bitcoin Dominance Index gauges the proportion of bitcoin in the whole crypto market valuation.
Nic Carter, a partner of Castle Island Ventures, claims that first legislative attention will be on passing stablecoin laws. The emphasis will then shift to the bill on the structure of the crypto market, which would define which crypto assets qualify as securities and which as commodities.
Driving elements and predictions for Bitcoin prices
While analysts at VanEck estimate bitcoin to be $180,000 at the end of 2025, Bitwise analysts see it reaching $200,000.
Though they have been made many times in the past, such forecasts for bitcoin prices seemed overly ambitious. They might not seem so far-fetched now as bitcoin is skyrocketing above $100,000.
Only 21 million bitcoins can ever be produced; already in use are 19.79 million of them.
Although there is only limited bitcoin supply, demand for it has surged.
From companies, governments, and ETF promoters to institutional investors, bitcoin is becoming increasingly sought for. Investors have loaded $36 billion into spot bitcoin ETFs.
Farside Contributors. " Bitcoins ETF Flow – All Data (US$m)."
As of December 23, MicroStrategy (MSTR), the leader for public companies owning bitcoin on their books, had 444,262 worth roughly $42 billion.
Historically, bitcoin and by extension the whole crypto market rise and fall in line with the four-year bitcoin halving cycle. Should that cycle hold, crypto markets would be expected to correct in 2025. Large institutional investors, however, could restrict any downturn.
Economist and Asgard Markets founder Alex Kruger says Bitcoin is in a "supercycle," meaning "recurrent 20%-40% corrections" instead of "85% drawdowns."
The Federal Reserve might also bring down the bitcoin party. Bitcoin prices suffered as the central bank recently lowered its 2025 interest rate cutting projections. Treasury yields could remain high if the Fed slows down its rate cuts, thus they would be more appealing to investors than more risky assets like bitcoin.
Will the Bitcoin Rally contaminate other cryptocurrencies?
Beyond the previously approved ones for bitcoin and ether, financial institutions are already sending applications for ETFs linked to additional crypto assets, such XRP (XRPUSD), so embracing a perhaps friendlier regulatory environment.
Still unclear, though, whether altcoins—also known as non-bitcoin cryptocurrencies—will join bitcoin's party.
For this crypto cycle, the Bitcoin Dominance Index—which gauges bitcoin's proportion of the whole crypto market—recently peaked.
"Historically bitcoin dominance has been cyclical," CoinFund Managing Partner and Head of Liquid Investments Seth Ginns told Investopedia. "We would expect a handoff to alts once bitcoin gains meaningfully above its all-time high, as happened in the last cycle."
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