The election of Trump has spurred a bitcoin movement, and supporters of him are positive about 2025. We examine the anticipated price drivers for the main cryptocurrency coin next year, the part asset managers will play in pushing it into the mainstream, and possible changes in the legal environment.
The Quick Comeback of Bitcoin
It now seems like a far-off memory, the “crypto winter” of 2021 and 2022. For cryptocurrencies, there was a serious crisis; one in which the BTC price dropped below $20,000, losing 75% over 12 months.
Although the history of bitcoin is one of tremendous highs and lows, John Plassard, senior investment specialist at Mirabaud Group, notes that this is an amazing comeback. “While history suggests caution as BTC’s price trajectory has been marked by sharp corrections following periods of exponential growth, its unparalleled rise reflects a mix of increasing legitimacy and growing demand.”
One knows from cryptocurrencies their great volatility. Induced by elements like market mood and risk appetite, regulatory announcements, technology breakthroughs, and macroeconomic trends, prices can vary greatly in short times.
Indeed, research head at 21Shares Adrian Fritz notes that corrections are natural for bitcoin and essential for the price dynamic.
“These downward adjustments, usually ranging from 20% to 40%, are a vital mechanism for reestablishing market equilibrium and are an integral part of bitcoin’s historical price patterns.”.
By December, the price of Bitcoin hit $100,000.
Agreeing is WisdomTree’s director of digital assets research, Dovile Silenskyte.
“Investors should approach BTC with knowledge that volatility is a natural feature. This implies that regardless of the present pricing or market conditions, being ready for price adjustments and maybe significant value reduction is important.
“Investors should also understand that volatility can work in both directions: while it presents the possibility of substantial upward gains, it equally entails the risk of major losses.”
Bitcoin: Prospects and Challenges in 2025
Forecasting the value of cryptocurrency is a somewhat dangerous hobby. “In 2025, bitcoin’s future looks promising yet uncertain,” notes John Plassard.
He remarks, “The growing integration of bitcoin into mainstream finance through spot ETFs and institutional adoption suggests it could consolidate its position as a legitimate asset class.”
Still, its performance will rely on macroeconomic variables, market liquidity, and Trump administration regulatory plans.
“If the current trajectory continues, Bitcoin could see further growth; yet, volatility and market corrections are probably going to remain part of the story,” he notes.
WisdomTree’s Silenskyte also names further inflationary pressures and monetary policy uncertainty as among the likely positive drivers for bitcoin in 2025, hence igniting interest in bitcoin as a “store of value.”
Less expensive money might go to cryptocurrency.
According to Adrian Fritz, “increased liquidity in the financial system could also flow into digital assets, maybe driving demand for bitcoin,” as monetary policy relaxes in 2025.
Fritz responds by underlining how growing geopolitical crises, especially in the Middle East, can greatly reduce investors’ demand for high-risk investments.
“The resulting economic uncertainty and market instability often push investors toward safer, more traditional assets, possibly triggering a sell-off,” the head of research for 21Shares said.
He also issues a warning over the White House’s maybe slower-than-anticipated execution of pro-cryptocurrency measures.
This could potentially cause market disappointment and a price correction, as many investors are placing their bets on the Trump administration’s potential to revolutionize cryptocurrency processing in the United States.
Trump Advocates Pro-Crypto Legislation
Indeed, the Trump government is likely to be quite important as bitcoiners hope for much more favorable treatment of their medium of choice. Currently head of the Securities and Exchange Commission (SEC), Gary Gensler—traditionally hostile to the cryptocurrency industry and an advocate of far tougher control—will resign on January 20, 2025. Donald Trump chose Paul Atkins, a years-long champion of cryptocurrency, in his stead.
Trump has vowed to make the US the new “bitcoin hub,” and the US press speculates about candidates for top positions in the Department of Commerce, Treasury, and the SEC very favorable of the crypto sector.
There are specific proposals for the creation of digital asset-specific advisory committees as well as for the nomination of a “crypto tsar” charged with industry advisory and regulation. This position is under discussion for Ripple CEO Brad Garlinghouse.
Fritz says, “These actions imply a possible streamlining of regulatory procedures and more integration of digital assets into conventional financial systems, so fostering innovation and growth.”
Not buying Bitcoin is an allocation of assets.
Over the past few years, bitcoin has developed into a fully fledged financial asset class. With a market capitalization of USD 2.03 trillion (£1.57 trillion), bitcoin stands as one of the largest assets globally. The introduction of spot ETFs in the US* in January 2024 has significantly reduced the gap between crypto and conventional finance.
Based on SEC 13F filings over the last three quarters, Adrian Fritz says, “These instruments will continue to contribute to increased demand in the US as more private banks, hedge funds, and government pension funds add BTC to their portfolios.”
Major asset managers like BlackRock and Fidelity’s entrance, Mirabaud’s Plassard notes, “further legitimized bitcoin as a portfolio asset.”
Dovile Silenskyte of WisdomTree also notes that institutional investors are seeing the advantages of devoting a tiny portion of their multi-asset portfolios to bitcoin. Her interactions with institutional investors are changing, she notes.
“More and more are starting to realize that rather than a neutral position, no allocation in bitcoin represents an active underweighting.”
