Bitcoin’s Future: Is a Surge Beyond $150,000 Possible by 2025?
Bitcoin (BTC) is showing signs of a bullish trend, with expectations for its price to exceed $150,000 by the end of 2025. After a remarkable increase of nearly 150% in 2024, Bitcoin is currently valued at almost $104,000. This rise in price has surpassed the performance of technology giant Nvidia (NASDAQ:NVDA), which yielded over 55% returns over the same period, while Nvidia’s stock remains relatively stagnant. Factors such as regulatory changes, increased institutional adoption, and the broader market climate contribute to the optimism surrounding Bitcoin in the coming year.
Regulatory Shifts and Broader Acceptance
Bitcoin achieved a significant milestone by crossing the $100,000 threshold, partly due to favorable conditions fostered by the Donald Trump-led administration. The proposed creation of a strategic Bitcoin reserve, alongside positive regulatory shifts, could strengthen Bitcoin’s standing in the investment world. A bill aimed at allowing the U.S. Treasury and the Federal Reserve to hold 5% of the global Bitcoin supply in reserve is currently under consideration in the Senate. If enacted, this could serve as a hedge against currency fluctuations, assist in reducing national debt, and bolster the country’s balance sheet.
Historically cautious about cryptocurrency, SEC chair Gary Gensler’s recent resignation may open doors for more crypto-friendly regulations. Trump’s administration is also exploring the establishment of a dedicated position within the White House to oversee blockchain initiatives, which could further enhance market confidence.
Institutional Interest on the Rise
There is a notable increase in institutional interest, with Bitcoin exchange-traded funds (ETFs) emerging as a popular investment choice in 2024. The Blackrock iShares Bitcoin Trust (IBIT) ETF alone has amassed over $45 billion in assets since its launch in January. By August 2024, it was reported that private companies and ETFs held over 1.2 million Bitcoins, accounting for about 6.29% of the total supply. Additionally, the value of Bitcoin held by publicly traded companies surged nearly 200% year-on-year to approximately $20 billion, evidencing a strong institutional push into the cryptocurrency space.
Bitcoin as a Defense Against Inflation
In today’s unstable geopolitical and economic climate, Bitcoin is being recognized as a potential hedge against failing fiat currencies, particularly in countries grappling with hyperinflation like Venezuela, Zimbabwe, and Lebanon. In Venezuela, for instance, Bitcoin comprised 9% of remittances in 2023, reflecting a growing reliance on cryptocurrency amid economic sanctions. The possibility of central banks diversifying their reserve assets to include Bitcoin and other cryptocurrencies is also gaining traction, with countries like the U.S. and China leading the charge.
Bitcoin’s fixed supply further bolsters its appeal. A maximum of 21 million Bitcoins can ever exist, which enhances scarcity compared to traditional currencies. Mining rewards are halved approximately every four years, limiting new supply and often correlating with rising prices. Following the most recent halving in April 2024, Bitcoin’s price has increased significantly—a trend observed historically after such events.
Understanding the Risks Involved
Despite the positive outlook, investing in Bitcoin carries inherent risks mainly due to its speculative nature. Bitcoin’s price remains highly sensitive to market sentiment, leading to periods of extreme volatility. For example, the price experienced two dramatic declines of nearly 50% in 2021. The potential for manipulation by large institutional investors is also a concern, given the limited supply of units. Additional risks include cybersecurity threats and growing environmental regulations that similarly affect the market.
Bitcoin has faced challenges like underperformance against the S&P 500 during downturns in past years (notably in 2018 and 2022). In contrast, the Trefis High Quality (HQ) Portfolio—a collection of 30 stocks—has consistently outperformed the S&P 500, achieving returns with less risk over the same timeframe. This portfolio approach minimizes the rollercoaster experience commonly associated with individual stocks and cryptocurrencies alike.
| Returns | Dec-24 | 2024 | 2017-24 |
| MTD [1] | YTD [1] | Total [2] | |
| BTC Return | 7.5% | 146% | 1093% |
| S&P 500 Return | 0% | 27% | 170% |
| Trefis Reinforced Value Portfolio | 6% | 32% | 883% |
| [1] Returns as of 12/16/2024 | |||
| [2] Cumulative total returns since the end of 2016 | |||
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
