Bitcoin (BTCUSD) experienced a stellar performance in 2024, surpassing the $100,000 milestone as multiple factors fueled investor confidence. The surge was driven by the launch of spot bitcoin exchange-traded funds (ETFs), anticipation of a bitcoin halving, and optimism surrounding President-elect Donald Trump’s perceived crypto-friendly policies.

Key Drivers of Bitcoin’s Rise

  1. Spot Bitcoin ETFs: The introduction of spot bitcoin ETFs in January significantly boosted demand. According to Farside Investors, these funds, which require direct purchases of Bitcoin as their underlying asset, saw inflows exceeding $36 billion in 2024.
  2. Halving Event: The bitcoin halving, which reduces the reward for mining new bitcoin, heightened expectations of limited supply, contributing to price appreciation.
  3. Trump Administration’s Crypto Stance: President-elect Trump’s post-election appointments and his openness to a “strategic bitcoin reserve” reinforced market optimism. Although the specifics of such a reserve remain unclear, figures like Senator Cynthia Lummis have supported the idea.
  4. Macroeconomic Conditions: Despite Federal Reserve projections for slower rate cuts in 2025, elevated Treasury yields have yet to significantly dampen enthusiasm for bitcoin as a risk asset.

Analyst Predictions for 2025

  • Bitwise Asset Management: Predicts bitcoin could exceed $200,000 in 2025, with a potential rise to $500,000 if the U.S. adopts a strategic bitcoin reserve plan.
  • Standard Chartered: Foresees continued ETF inflows similar to 2024 levels, supporting bitcoin’s price trajectory.
  • VanEck: Projects a peak of $180,000 for Bitcoin in 2025, with significant volatility, including potential price corrections of up to 30% before stabilization.

Current Market Position: Bitcoin is currently trading at around $95,000, contributing to a total cryptocurrency market capitalization of approximately $3.26 trillion, according to CoinMarketCap.

While the cryptocurrency market remains bullish, analysts caution about inherent volatility. Factors such as ETF inflows, federal policies, and macroeconomic shifts will play pivotal roles in determining bitcoin’s trajectory in the coming year.

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