Bitcoin and cryptocurrencies have been firmly back in the spotlight in the past few months, thanks to surging prices.
After Donald Trump’s resounding US election win in November, bitcoin – along with countless other crypto tokens – has skyrocketed as crypto-fanatics and casual speculators bet on a pro-crypto future under the President-elect.
The bull-run continued into December with bitcoin smashing the $100,000 barrier for the first time after Trump promised to nominate Paul Atkins to become the new commissioner of the Securities sand Exchange Commission.
The currency has risen 117 per cent so far this year and is currently trading at nearly $97,000 per token.
It peaked at $107,000 per token earlier in the month after Trump said he might make a strategic bitcoin reserve, emulating the countries Strategic Petroleum Reserve.
The token has a maximum total supply of 21million, with 19.9million already in existence.
He said: ‘We’re gonna do something great with crypto because we don’t want China or anybody else – not just China but others are embracing it – and we want to be the head.’
With Trump no doubt looking forward to his inauguration on 20 January, the jury is still out on how many of his crypto promises he’ll keep, and what 2025 and the new President hold for the crypto space.
Bull-run: Since trump’s election win Bitcoin has surged, passing the $100,000 mark in early December
Where could bitcoin prices hit in 2025?
It is of course impossible to know what will happen to the value of bitcoin and other cryptocurrencies next year – prices are volatile.
However, the future is looking rosy, at least according to Standard Chartered, which has set a bitcoin price target of $200,000 by the end of 2025.
The bank said: ‘Given the potential for further institutional flows in 2025, we remain comfortable with our end-2025 price level of around $200,000.
‘Greater-than-expected uptake by US retirement accounts/pension funds, global SWFs or a potential US strategic reserve fund would make us even more bullish.’
While $200,000 seems a long way to go, financial institutions are now throwing their weight behind crypto and Trump pledging to reform crypto regulation, bitcoin could see considerable drive in 2025.
Simon Peters, market analyst at Etoro, told This is Money that bitcoin is also likely to follow its four-year cycle which could mean it is set to peak in 2025.
He said: ‘Bitcoin is following its usual four-year boom and bust cycle, and if history is anything to go by, we typically see the peak of the bull market 12 to 18 months post block-reward halving.
‘With the latest block reward halving occurring in April a peak for the crypto bull market could occur at the end of 2025 or early 2026 based on this four-year theory.’
This is not guaranteed, however, with David Morrison, senior market analyst at Trade Nation, noting the pullback bitcoin has seen from its previous highs.
He said: ‘Should bitcoin make further upside progress from here, then it could be that $100,000 becomes the next significant level of support, and a launchpad for further gains.’
Currently the support for the crypto is around $90,000, he said.
Regulation set for change
One of the main catalysts for the recent crypto-boom is Trump’s promise to replace the much-reviled SEC chair Gary Gensler with Paul Atkins.
Gensler, who has announced he’ll step down upon Trump’s inauguration, is widely disliked by those in the crypto sphere for his enforcement approach to the currencies, with SEC Commissioner Mark Uyeda even admitting that the SECs recent approach to crypto has been a ‘disaster’ for the whole industry.
This was, according to David Morrison, senior market analyst at Trade Nation, the: ‘the icing on the cake, and the solid evidence that crypto is about to enjoy a much friendlier regulatory environment.’
Nick Jones, chief executive of Zumo, agrees. He told This is Money: ‘Increased regulatory scrutiny is a positive sign that our industry is maturing.
‘And now companies must respond by adopting appropriately robust frameworks for governance, risk management, and compliance.’
Trump has pledged to ease regulation on crypto, and create a new regulatory framework that looks to further integrate crypto into the financial world. This is where Trump’s nbitcoin reserve could come in.
Other nations could also follow suits by adopting bitcoin as a reserve asset if Trump does take this approach.
Laith Khalaf, head of investment analysis at AJ Bell, said: ‘Fresh news of supportive US government policies in 2025 could continue to bump crypto higher.
‘Bitcoin could end the year at $20,000 or $200,000, and no one should be surprised based on previous price action.
‘If Trump delivers on his promises to boost the crypto industry in the US, that should make for positive news flow, which should in turn keep the plates spinning.’
On top of this, Arnoud Star Busmann, chief exectuive of Quantoz Payments, said: ‘This will all lead to crypto being safer and easier to access, via familiar channels like ETFs and traditional investment advisors, which will get an unprecedented number of investors to allocate a portion of their portfolio to it in the coming year.’
However, Khalaf warns that bitcoin is still a risky investment. He added: ‘With no fundamentals to speak of, the price of bitcoin is purely driven by what other buyers are willing to pay for it, and the sentiment of crowds is a fickle beast.’
Crypto will become mainstream
With a safer regulatory environment will also come a wave of new investors looking to buy crypto. The value of crypto tokens is fundamentally based on interest from investors, so this should prove positive for the space.
Laith Khalaf said: ‘Seven million people in the UK now own some crypto, according to the FCA, not far off the number who have some money in a stocks and shares Isa, a mainstream investment account that has been around for 25 years.
‘No doubt many of the seven million crypto holders are taking a punt with a small amount of money, but every single one of them should be willing to accept steep losses if the market turns against them, and in the worst-case scenario, wave goodbye to their money altogether.’
In fact, Star Busmann says 2025 will likely see the largest ever influx of crypto investors as a result of greater regulation and impending legislation making crypto a more acceptable asset class.
‘I expect that the price of bitcoin will continue its upwards momentum in 2025. But with a multitude of potential catalysts like growing corporate treasury adoption, discussions of national strategic stockpiles and the prospect of US regulatory clarity in 2025, to name a few, it promises to be an exciting year in this space.’
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