In a detailed analysis released on December 17, experts from the cryptocurrency exchange Bitfinex have shed light on the future trajectory of Bitcoin (BTC). The report underscores a blend of increasing institutional interest in Bitcoin and optimistic technical indicators, suggesting that this leading cryptocurrency could potentially soar to $200,000 by mid-2025. Additionally, it posits that price corrections in that year might remain relatively moderate.
Bitcoin Pullbacks Anticipated to Be Mild in 2025
Recently, Bitcoin achieved a remarkable milestone by surpassing the $100,000 mark, thereby boosting its market capitalization to over $2 trillion. Despite this achievement, the latest Bitfinex Alpha report indicates substantial growth potential for BTC as we approach 2025.
Analyzing Key Technical Indicators
The report delves into several pivotal technical indicators, such as market value to realized value (MVRV), net unrealized profit/loss (NUPL), and the bull-bear market cycle indicator. These metrics collectively suggest that Bitcoin’s market continues to exhibit bullish tendencies and is far from reaching its euphoric zenith.
Even though Bitcoin’s extraordinary growth seen in previous cycles may experience diminishing returns, analysts at Bitfinex remain optimistic. They project that under favorable conditions, Bitcoin could still achieve a value of $200,000. They elaborate:
“Our view is that any corrections in 2025 will remain mild, thanks to institutional inflows. Historically, post-halving years have seen the strongest rallies. Minimum price estimates stand at $145,000 by mid-2025, potentially stretching to $200,000 under favorable conditions.”
Institutional Inflows and Their Impact
Institutional investments in Bitcoin, particularly through exchange-traded funds (ETFs), have been on a consistent upward trend, especially following significant political events like Donald Trump’s November presidential election victory. A recent study revealed that US spot ETFs now hold more Bitcoin than the wallet of its enigmatic creator, Satoshi Nakamoto.
While the report maintains a robust long-term bullish outlook, it does caution that some volatility might surface in the first quarter of 2025. However, these fluctuations are expected to be short-lived and relatively mild. The analysis also points out that price corrections following Bitcoin halvings have been decreasing in magnitude with each cycle:
“In previous cycles, once Bitcoin entered price discovery following a halving, corrections before mean reversion to new ATHs were relatively contained. In the 2017 cycle, the maximum correction was 33.2 percent, while the 2020 cycle saw a slightly smaller correction of 27.1 percent.”
Strategic Reserve: A Catalyst for Bitcoin Growth?
One intriguing aspect of this Bitcoin cycle is the speculation regarding the potential creation of a US strategic Bitcoin reserve. According to Adam Back, CEO of Blockstream, such a reserve could propel Bitcoin prices into the seven-figure range.
Global Implications of a Strategic BTC Reserve
Matt Hougan, Chief Investment Officer at Bitwise, an asset management firm, recently highlighted that the establishment of a strategic BTC reserve could drive the cryptocurrency’s value up to $500,000. Many experts believe that if the US takes this step, other countries may follow suit, triggering a domino effect that could significantly boost Bitcoin’s price.
In related developments, Satoshi Hamada, a Japanese Member of Parliament, proposed the idea of Japan creating its own strategic BTC reserve. As of the latest reports, BTC is trading at $103,953, reflecting a 3.7% decrease over the past 24 hours.
