Bitcoin’s recent retreat from $99,000 has led some to question whether the party is over for the cryptocurrency. However, despite the pullback, there are still several reasons to believe that Bitcoin has significant upside potential as we head into 2025.
The psychology of Bitcoin plays a crucial role in determining its price. Market sentiment, tracked by the crypto Fear and Greed Index, can shift rapidly, with investors oscillating between fear and greed on a daily basis. The $100,000 price level is particularly important, as it would make Bitcoin a $2 trillion asset, only a handful of publicly traded stocks have ever achieved this valuation.
Looking ahead to 2025, there are three key catalysts that could push Bitcoin higher. The inflow of new money into spot Bitcoin ETFs has been substantial, with the iShares Bitcoin Trust reaching $40 billion in assets under management. Additionally, the pro-crypto promises made by incoming president Donald Trump, such as removing SEC head Gary Gensler from his post, could provide a boost to Bitcoin.
The creation of a strategic Bitcoin reserve, which would result in the U.S. government committing to purchasing 1 million Bitcoins over a five-year period, would also be significant for Bitcoin’s price. According to billionaire investor Mike Novogratz, “straight Bitcoin” is the best way to get exposure to the cryptocurrency, and investors should avoid proxy stocks like MicroStrategy.
As we head into the end of the year, it’s likely that Bitcoin will continue to rise. However, with its history of high volatility, getting past the $100,000 price barrier is likely to encounter significant turbulence. Nevertheless, the potential upside for Bitcoin remains significant, and investors should be prepared for another heater as we enter 2025.
Source: https://www.fool.com/investing/2024/11/27/is-bitcoins-post-election-rally-over