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The crypto market has experienced a significant rise recently, and some even believe that in the current bull market cycle, Bitcoin could reach $200,000.
Can this happen? No one knows for sure because Bitcoin is currently entering the “Discovery Price” stage. Price discovery occurs when the price of an asset increases and breaks through its All-Time High (ATH). No resistance can be a benchmark for the limit of increase.
Here are 7 sentiments that could push Bitcoin up throughout 2025.
Potential BTC Purchases by the US Government
One factor driving the price of BTC is the proposal for the US to start a strategic reserve of Bitcoin. Cynthia Lumis, a US senator, has proposed buying up to one million Bitcoins in the next five years. This move could create enormous demand, given the increasingly limited availability of Bitcoin.
With Trump’s victory, Bitcoin owned by the US government has less chance of being sold. Previously, there was a discourse to make the selling action the same as the German government.
Global Game Theory
In recent years, the concept of “global game theory” has become an important factor influencing the price of Bitcoin. Countries such as El Salvador and Bhutan have taken significant steps by making Bitcoin legal tender, even investing in large-scale Bitcoin mining.
Read Also: Bhutan Revealed to Have Bitcoin Worth USD 780 Million, Surpassing El Salvador
More recently, Russia passed new regulations that allow Bitcoin mining activities in its territory, aiming to accumulate digital assets as a strategic reserve. In the view of analysts, the competition between countries for control of the remaining Bitcoin-about 1.5 million units-is becoming intense, creating immense pressure that could push the Bitcoin price to higher levels.
Bitcoin Buying by Big Companies
In addition to countries, large corporations are also becoming interested in owning Bitcoin. Some tech giants like Microsoft are considering buying Bitcoin as part of their investment strategy. Microsoft even reportedly conducted a shareholder vote on purchasing Bitcoin, which shows how serious the corporation’s interest in this crypto asset is.
Large companies like Microsoft, Facebook, and Apple have billions of US cash reserves. The impact could be significant if a portion of these assets were allocated to Bitcoin. These moves would not only add to demand in the market but also give Bitcoin greater legitimacy in the eyes of institutional investors. Analysts like Davis believe that the interest of these large companies could trigger a large price rally.
MicroStrategy, led by Michael Saylor, has consistently bought Bitcoin as part of its corporate strategy. In the next few years, MicroStrategy announced plans to buy US$42 billion of Bitcoin. This move shows that corporations do not only see Bitcoin as a short-term investment instrument but also as a strategic asset that can protect company value amid inflation and global economic uncertainty.
Bitcoin ETF’s Influence on Wall Street
Bitcoin ETFs have given institutional investors easier access to participate in the crypto market. With Bitcoin ETFs now trading on Wall Street, large institutional funds are entering the crypto market, reinforcing positive sentiment. In one day, Wall Street bought around US$1.4 billion worth of Bitcoin, equivalent to over a month’s worth of mining.
The strong demand from institutions made the Bitcoin ETF one of the most successful ETF launches in history. As Davis says, this positive inflow is monumental and expected to continue. This large inflow of funds stabilizes Bitcoin’s price and gives retail investors confidence that reputable institutions back the asset.
“Rising Numbers” Attract New Investors
In addition to institutional investors, interest from retail investors continues to increase along with the consistent increase in Bitcoin price. This increase has attracted the interest of existing investors and caught the attention of new investors who want to benefit from the price increase.
Crypto apps such as Coinbase have seen a download surge, signaling great interest from new users. Davis refers to this phenomenon as “the ‘rising numbers’ technology,” which attracts investors like moths to a flame. In the investment world, consistent upward price movements attract the attention of many, as they see it as an opportunity for quick profits.
This growing retail interest is also driven by social media trends and influencers actively promoting Bitcoin. Information about the huge profits that can be made from Bitcoin quickly spreads on platforms such as Twitter, Instagram, and TikTok, making more people interested in trying their luck in the crypto market. More retail investors entering the market will continue to increase demand, which will further boost the price of Bitcoin.
The Era of Interest Rate Trimming
Lower interest rates in some countries have also positively impacted the crypto market. With lower interest rates, investors shift from money markets or bonds to riskier assets that offer higher potential returns, such as stocks and Bitcoin. This happens because low interest rates make returns from traditional assets less attractive, so investors look for alternatives to earn greater returns.
Davis notes that this policy easing will increase global liquidity, which will, in turn, support Bitcoin’s price rise. This increased global liquidity index reflects more money in circulation, which can flow into riskier markets. Under these conditions, cryptocurrencies like Bitcoin become more attractive to investors.
Moreover, with uncertain global economic conditions, many investors see Bitcoin as a potential hedge against inflation. Loose monetary policies implemented by central banks in various countries can lead to inflation in the long run. Bitcoin is seen as an asset that can hedge against such inflation risks.
Bitcoin’s Four-Year Cycle
The last reason raised by Davis is the four-year cycle that often occurs in Bitcoin price movements. Historically, the price of Bitcoin often reaches a new peak within 12 to 18 months of a halving event. Halving is an event where rewards for Bitcoin miners are halved, resulting in a reduced supply of new Bitcoin entering the market.
This halving creates a significant scarcity effect, as only 21 million Bitcoins will be available for mining time. This scarcity naturally pushes the price upwards, especially as demand increases. Based on this four-year cycle, many analysts predict that the Bitcoin price will reach a new peak in the next few years.
By understanding this cycle, investors can prepare to capitalize on the momentum that often follows a halving. This pattern has been evident in previous halvings, after which the Bitcoin price experienced significant gains. If history repeats itself, the next halving event will trigger even higher price increases.