What to expect from the Bitcoin and cryptocurrency markets in 2025
Key takeaways
- Bitcoin has soared this year, boosted by the approval of spot Bitcoin ETFs and the Bitcoin halving event, as well as optimism surrounding the election of Donald Trump as President of the United States.
- In 2025, attention will turn to the Trump administration’s attempts to provide regulatory clarity to the cryptocurrency industry.
- Some analysts say Bitcoin could rise to $200,000 by the end of next year, amid growing demand from institutional investors, although history suggests the market may be on its way to a correction.
- There is no clear indication as to whether Bitcoin’s recent rally will spill over into altcoins.
The cryptocurrency market has had an exceptional year, and market participants are optimistic about the prospects for 2025 as a new administration takes office in Washington, D.C., although much uncertainty remains.
Bitcoin (Bitcoin against the dollar) early in the year amid overwhelming demand from newly launched exchange-traded funds (ETFs). Shortly after, A Bitcoin halvingwhich slowed the pace of creation of new bitcoins, creating an imbalance between supply and demand that led to prices rising even further.
The election of Donald Trump, as well as several pro-crypto lawmakers, has given another boost to Bitcoin in recent weeks, helping the digital currency surpass the $100,000 price mark for the first time.
Here’s what market participants will be watching in the coming year.
What does Trump mean for cryptocurrency regulation?
One of the biggest concerns in the cryptocurrency market in recent years has been the lack of clarity around regulations and the US Securities and Exchange Commission (SEC). Enforcement Approaching.
During the election campaign, Trump did a number of… Promises for the Bitcoin and Cryptocurrency Industriesincluding that he will fire SEC Chairman Gary Gensler on the first day of his administration and create a “Strategic National Bitcoin Stock.’ Gensler decided so Step down And Trump has Suggested Cryptocurrency advocate Paul Atkins to head the agency.
Even as markets wait for regulatory clarity, there is no guarantee they will get what they want or when.
Trump’s position on… [decentralized finance (DeFi)] Cryptocurrencies have been somewhat inconsistent, Sarah Brennan, general counsel at Delphi Ventures, told Investopedia. “While he has expressed interest in this area, much of his focus appears to be limited to supporting the dominance of the dollar and real estate applications.” The Bitcoin Dominance Index measures the share of Bitcoin. From the overall evaluation of the crypto market, and It recently reached new highs.
According to Castle Island Ventures partner Nick Carter, the legislative focus will be on access Stable coin The legislation was passed first. Next, the focus will shift to the draft Cryptocurrency Market Structure Bill, which will clarify which crypto assets are commodities and which are securities.
Bitcoin price forecast and driving factors
Analysts at Bitwise expect the price of Bitcoin to reach $200,000 by the end of 2025, while analysts at VanEck peg its price at $180,000.
Such expectations for Bitcoin prices It’s been done a few times in the past but it seemed too ambitious. With Bitcoin rising above $100,000, it may not seem so far-fetched now.
There is only 21 million bitcoins that could ever be created, and 19.79 million of them are already in circulation. While the supply of Bitcoin is limited, demand for it has increased.
There is a growing demand for Bitcoin from institutional investors that include ETF promoters, corporations and nation states. Spot Bitcoin ETFs saw investors pump in $36 billion. The precise strategyMSTR), the leading company in the field of public holding companies Bitcoin in her booksowned 444,262 worth approximately $42 billion as of December 23.
Historically, Bitcoin – and thus the entire cryptocurrency market – rises and falls in line with the price of Bitcoin over a four-year period Half cycle. If this cycle continues, cryptocurrency markets are due for a correction in 2025. But the presence of large institutional investors could limit any downturn.
Bitcoin is going through a “super cycle,” according to economist and founder of Asgard Markets, Alex Krueger, which means “frequent 20%-40% corrections” rather than “85% drawdowns.”
The Fed could also crash the Bitcoin party. Central Bank It has recently been downsized Its forecast for interest rate cuts in 2025, which has affected Bitcoin prices. If the Fed slows its interest rate cuts, Treasury yields could remain high, making them more attractive to investors compared to riskier assets like Bitcoin.
Will Bitcoin’s rally extend to altcoins?
Financial institutions are already taking steps to adopt a friendlier regulatory environment by submitting applications for ETFs related to additional crypto assets, such as XRP (Ripple Dollar), exceeding those previously approved for Bitcoin and Ether.
But it is still unclear whether Alternative currenciesor cryptocurrencies other than Bitcoin, will join the Bitcoin party.
Bitcoin Dominance Index, which measures Bitcoin’s share of the overall cryptocurrency market, It recently reached new highs For this coding course.
“Bitcoin’s dominance has historically been cyclical,” Seth Gaines, managing partner at CoinFund and head of liquid investments, told Investopedia. “We would expect a shift to altcoins once Bitcoin surpasses its all-time highs, as happened in the last cycle.”
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