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In a report released on December 17th, analysts at cryptocurrency exchange Bitfinex say that a combination of increasing institutional adoption of Bitcoin (BTC) and bullish technical indicators will push the major cryptocurrencies into 2025. He said it could rise to $200,000 by the middle of the year. The report also predicts that price adjustments in 2025 are likely to “remain moderate.”
Bitcoin price decline is expected to moderate by 2025
Earlier this month, Bitcoin passed the psychologically important price level of $100,000, and at the time of writing, its market capitalization has reached just over $2 trillion. However, BTC still has significant growth potential heading into 2025, according to the latest edition of the Bitfinex Alpha report.
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The report highlights several technical indicators such as Market Value to Realized Value (MVRV), Net Unrealized Gain and Loss (NUPL), and Bull Market Cycle Indicators, which taken together reflect the market's still bullish momentum. , suggesting that it is far from a blockbuster hit. Peak of euphoria.
Analysts at Bitfinex say the decline in revenue could slow Bitcoin's phenomenal growth seen in previous cycles, but under “favorable conditions” Bitcoin could still reach 200,000 yen. It is said that it could reach US$. The report states:
We expect the correction in 2025 to be modest, thanks to inflows from institutional investors. Historically, the years following a halving have seen the strongest rebounds. The estimated minimum price is $145,000 by mid-2025 and could reach $200,000 under favorable conditions.
Indeed, institutional inflows into Bitcoin through exchange-traded funds (ETFs) have shown a steady upward trajectory, especially after Donald Trump won the presidential election in November. A recent analysis revealed that a US spot ETF currently holds more BTC than the wallet of Bitcoin pseudonym Satoshi Nakamoto.
While the report predicts a strong bullish case in the long term, it warns that some price volatility may emerge during the first quarter of 2025. However, this decline is expected to be moderate and short-lived. The report also notes that the size of the price correction following Bitcoin's halving has been decreasing with each cycle.
In previous cycles, when Bitcoin entered price discovery after the halving, the correction before mean reversion to the new ATH was relatively muted. The largest adjustment in the 2017 cycle was 33.2 percent, while the 2020 cycle had a slightly smaller adjustment of 27.1 percent.
Strategic Reserves Could Expand BTC Profits
One of the unique factors in this Bitcoin cycle is speculation surrounding the possible creation of a US Strategic Bitcoin Reserve. According to Blockstream CEO Adam Back, these reserves could drive Bitcoin prices into the seven-digit range.
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Matt Hogan, chief investment officer at asset management firm Bitwise, recently pointed out that the creation of a strategic BTC reserve could boost the asset's price to $500,000. Experts believe that if the United States establishes a Bitcoin reserve, other countries will likely follow suit, creating a domino effect that could lead to a significant price spike.
In related news, Japanese lawmaker Satoshi Hamada floated the idea of Japan creating its own strategic BTC reserve fund. At the time of writing, BTC is trading at $103,953, down 3.7% in the past 24 hours.
BTC is trading at $103,953 on the daily chart. Source: BTCUSDT on TradingView.com
Featured image from Unsplash, chart from TradingView.com
