Bitcoin’s staggering gains this year have been attributed to optimism over changing US regulations. Analysts predict that the cryptocurrency could have much more room for growth in 2025.
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Bitcoin saw an increase of 150% in 2024, positioning itself as one of the best performing investments of the year. This development can be attributed to three factors: regulatory optimism, an improving macroeconomic environment and growing investor enthusiasm.
Looking ahead, the world’s largest cryptocurrency is expected to continue its trend in 2025, with analysts predicting that it could reach a price range between $200,000 (€193,000) and $250,000 (€241,000). ).
Bitcoin’s rise could continue
Historically, bitcoin has reached new highs every 4 years during its last two bull runs since 2017. Each cycle has seen gains of 2300% and 1700% before pullbacks of 70% to 80%.
Since its low of $16,000 (€15,500) two years ago, bitcoin has surged approximately 600%, indicating substantial potential for further growth over the next two years.
Tom Lee of Fundstart Global Advisors predicts that bitcoin could reach $250,000 in 2025. Standard Chartered predicts the price will reach $200,000 next year.
Cryptocurrencies generally tend to move higher during central bank monetary easing cycles. Investor appetite for risky assets generally increases in environments of increased liquidation and money supply expansion.
As the world’s major central banks are expected to continue cutting interest rates in 2025, the prevailing risk sentiment is likely to support further gains for bitcoin.
The leverage effect of American regulations
Regulatory developments were the main drivers of the bitcoin price surge in 2024. Its price saw a substantial rise, surpassing the critical resistance level of $52,000 (50,200 euros) in February.
This followed the US Securities and Exchange Commission’s (SEC) approval of a spot bitcoin ETF in January, ahead of the highly anticipated bitcoin halving event in April.
Bitcoin traded between $52,000 and $72,000 (69,600 euros) until November, as Donald Trump’s victory in the US presidential election catalyzed further gains.
Trump’s promise to implement pro-cryptocurrency policies, including declaring that he would make America the “cryptocurrency capital of the planet”boosted investor sentiment.
Bitcoin surpassed the psychological threshold of $100,000 (96,600 euros) in early December, after Trump announced his intention to nominate Paul Atkins, a former SEC commissioner supportive of cryptocurrencies, as SEC chairman.
Analysts are optimistic about bitcoin’s outlook for 2025
“This performance is expected to continue in 2025, we will have a clearer regulatory environment and we see institutional capital coming to the table in a more meaningful way than ever before,” said Josh Gilbert, markets analyst at eToro Australia.
The Trump administration’s policies could continue to provide regulatory headwinds for cryptocurrencies in 2025. The US president reiterated his plan to adopt bitcoin as part of the US strategic reserves in December. Investment firm Charles Schwab expects bitcoin to hit $1 million if that happens.
At a conference in July, the president-elect said that holding bitcoin would create “a permanent national asset that would benefit all Americans.” Senator Cynthia Lummis has discussed purchasing up to 200,000 bitcoin tokens per year for five years, or about 1% of the total supply.
ADVERTISEMENTAccording to its mining mechanism, Bitcoin’s maximum supply is 21 million tokens. Although the proposal does not specify how it would get through the legal process, the US government could sell some of its gold reserves to raise the funds needed to purchase bitcoins, according to a Reuters report.
Short-term downside risks
However, the long-term view does not alter the risk of a short-term correction. The price of bitcoin has fallen sharply, going from a historic high of more than 108,000 dollars (104,300 euros) in mid-December to the current level of 94,000 dollars (90,800 euros).
This development is probably due to profit taking and a feeling of abandoning risk. This decline coincides with a decline in global stock markets over the past two weeks.
Until the new Trump administration implements clearly pro-crypto policies, some investors may choose to lock in their 2024 gains.
ADVERTISEMENTFrom a technical perspective, bitcoin’s immediate support level appears to be around $90,000 (87,000 euros). A break below this level could allow the cryptocurrency to test the next target of around $73,000 (€70,500).
