- Institutional players are actively embracing Bitcoin through Bitcoin Spot ETFs. Currently, 3.3% of the total Bitcoin supply is held in these funds.
- There is a striking trend in monitoring the historical performance of Bitcoin’s price after Halving events.
- A recent catalyst for companies to include Bitcoin in their reserves is the Financial Accounting Standards Board (FASB) rule.
Is a price target of $100,000 realistic for Bitcoin in 2025? Here are 7 reasons that could contribute to achieving this target!
How Much Will Bitcoin Aim for in 2025?
Bitcoin (BTC) is said to be gearing up for a significant rally according to analysts’ price predictions. There are several factors that could contribute to Bitcoin surpassing $100,000 in the 2024-2025 bull run. Therefore, here is a comprehensive evaluation of 7 reasons indicating that Bitcoin’s price could reach $100,000 by 2025.
Institutional Participation Through Bitcoin Spot ETFs
Institutional players are actively embracing Bitcoin through Bitcoin Spot ETFs. Currently, 3.3% of the total Bitcoin supply is held in these funds. Moreover, large financial institutions like BlackRock are consistently expanding their holdings of BTC in their ETFs. Institutional capital inflow not only adds credibility to Bitcoin but can also push its price upwards by injecting significant liquidity into the market, increasing scarcity.
Historical Correlation of Bitcoin Price with Halving Events
There is a striking trend in monitoring the historical performance of Bitcoin’s price after Halving events. With only 48 days left until the next Halving in 2024, expectations are high. Historical data demonstrates the profound impact of previous Halving events on Bitcoin’s price. In 2012, following the Halving, Bitcoin’s price surged from $12 to $1,200.
The Halving in 2016 saw a rise in Bitcoin’s price from $650 to a record-breaking $19,000 before marking the beginning of the famous ‘Crypto Winter.’ Similarly, the 2020 Bitcoin Halving triggered a notable increase, propelling the price from $9,000 to a record level of $68,000. The upcoming Halving, which will reduce mining rewards from 6.25 BTC to 3.125 BTC, is expected to create scarcity in the market.
Companies Embracing Bitcoin Triggered by the FASB Rule
A recent catalyst for companies to include Bitcoin in their reserves is the Financial Accounting Standards Board (FASB) rule. This rule has encouraged companies to recognize Bitcoin as a store of value and long-term growth potential. As companies diversify their portfolios, Bitcoin is becoming an increasingly strategic asset.
Central Banks Embracing Bitcoin as a Hedge Against Fiat Inflation
Countries and central banks worldwide are turning to Bitcoin as a hedge against inflation and economic uncertainties. The courage of El Salvador to adopt Bitcoin as legal tender exemplifies this trend. Additionally, as traditional fiat currencies face challenges, Bitcoin emerges as a strategic asset to protect against potential devaluation. Increased adoption can positively impact its value.
Expected Interest Rate Cuts by the Fed Could Boost Bitcoin Price
The Federal Reserve is expected to make interest rate cuts in June of this year. As the Fed’s interest rate policy changes, investors are expected to seek alternative store of value. Bitcoin, with its decentralized nature and limited supply, stands out as an attractive alternative asset.
This is because borrowing capital for investment will be cheaper from an investment perspective. Therefore, investors may consider investing in high-risk assets like cryptocurrencies. Additionally, Bitcoin’s status as the largest digital currency, having gained significant credibility over time, could increase its potential for adoption in the event of a Fed interest rate cut.
Bitcoin as a Hedge Against Inflation
The attractiveness of Bitcoin as a hedge against inflation continues. Individual investors, not just countries or institutional investors, are seeking ways to protect against inflation. Bitcoin’s decentralized nature and limited supply make it an attractive option for preserving assets against inflation challenges. An increase in entries could positively impact the price of BTC.
Bitcoin Price Expected to Reflect Gold Movement After 2003 ETF Launch
It is expected that the introduction of the Bitcoin Spot ETF will inject billions of dollars into the market and create a similar impact as Gold. The increased liquidity caused by the ETF will likely boost Bitcoin demand. If Bitcoin’s price reflects the effect of the first Gold ETF in 2003, it could surpass $100,000 in the coming years.
In 2003, the first Gold ETF, Gold Bullion Securities, was launched on the Australian Securities Exchange. At that time, Gold was $330.30 per ounce. Within a year, its value increased to $421.25 per ounce, indicating a significant 27% annual increase, according to Bullion by Post data. This is significantly higher than the 13% increase in Gold price in 2023.
Furthermore, after the launch of the first Gold ETF in the United States, SPDR Gold Shares, on November 18, 2004, the price of the metal soared to $485 per ounce within a year, indicating a 10% increase. Although not as significant as in 2004, Gold’s value has increased by over 400% in the last 20 years. Moreover, if Bitcoin’s price reflects the impact of the first Gold ETF, it could rise to $100,000 or more, especially as predicted by leading institutions like Standard Chartered. Additionally, other factors such as Bitcoin Halving and Fed interest rate cuts could be valuable triggers for the rally.
