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The Key Takeaways
- According to Bitwise, Standard Chartered & VanEck, bitcoin is expected to rise to between $180,000 and $200,000 by 2025.
- Analysts believe that flows into Bitcoin ETFs on the spot could match those of 2024.
- The price of bitcoin could rise if the U.S. adopts a Bitcoin strategic reserve.
Bitcoin (BTCUSD) has had a strong 2024, climbing past many price milestones—including $100,000—as a confluence of factors drove up investor confidence in the leading cryptocurrency.
All of it began with demand related to the bitcoin spot exchange-traded fund (ETFs), which started trading in early January. This was then followed by an excitement about a halving of that limited new supply of bitcoin. Finally, the expectation of a crypto-friendly policy after Donald Trump’s reelection seemed reinforced by dozens of Trump’s post-election appointments.
While the Federal Reserve's latest projections for cutting interest rates next year shook the crypto markets, some of the aforementioned reasons for optimism remain on the table—though if the Fed slows its rate-cutting campaign, experts say, Treasury yields could remain elevated, shifting investors away from bitcoin and other risk assets.
That's why some analysts remain bullish on bitcoin—but warn of volatility ahead.
Bitcoin has more potential, say analysts
Prior to the Fed meeting shock, digital asset manager Bitwise's predictions for 2025 pegged bitcoin rising above $200,000 for the first time. That number rises to $500,000 if the federal government adopts Senator Cynthia Lummis' plan of buying 1 million bitcoin for a "strategic bitcoin reserve."
The President-elect Trump also supports the idea of creating a Bitcoin strategic reserve. However, it is unclear how much bitcoins the government would hold or if they would simply add more to their existing bitcoin holdings.
Standard Chartered’s analysts also have a similar expectation of bitcoin prices and agree with Bitwise that the inflows into spot bitcoin ETFs will be similar in 2025 to this year. The funds need to buy bitcoins as they receive money from investors. According to Farside Investors, the bitcoin ETFs saw net inflows totaling more than $36 billion so far this year.
VanEck analysts are bullish too, though less confident. Analysts expect Bitcoin prices to rise as high as $180,000 with great volatility in 2025.The price of bitcoin is expected to fall by about a third (about 30%), after reaching new highs in early this year. This will be followed by an extended period of consolidation over the summer and a final peak at the end.
Bitcoin is currently trading at $95,000. The total cryptocurrency market capitalization is estimated to be around $3.26 billion.
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