Cryptocurrency tailwinds could push Bitcoin to $200,000 in 2025. What to see | Wilnesh News
Cryptocurrency investors are gearing up for the new year and bullish post-election market themes — especially the promise of pro-crypto governments and looser regulations — to drive capital into the industry. Bitcoin and other cryptocurrencies surged after the November election, driven by President-elect Donald Trump’s pledge to embrace the industry in his new term, but last week the Federal Reserve signaled a smaller rate cut in 2025 than previously expected. Cryptocurrencies are taking a hit. However, the new government’s support is seen as overcoming any obstacles from the central bank and could spur a doubling of Bitcoin prices. Zach Pandl, head of research at Grayscale Investments, said: “The macroeconomic picture looks good for cryptocurrencies and the broader market and should not hinder further appreciation.” “The biggest question now will be the governance, politics and governance surrounding cryptocurrencies in the United States. The actual topic of legislation. This election is a huge breakthrough and it is difficult to overstate how different the regulatory environment may be in the next few years. Money market structures and stablecoins seen as the low-hanging fruit), new capital entering the industry and the prospect of national strategic Bitcoin reserves (another campaign topic) will outweigh the macroeconomic risks next year, Citizens JMP Senior Research Analyst Devin Ryan told CNBC. “Don’t fight the inflows; it’s going to be far more than some ebbs and flows and the nuances of whether you get one or two rate cuts over the course of the year.” Matt Hougan, chief investment officer at Bitwise Asset Management, said that in addition to political support, the adoption of Bitcoin (and to a lesser extent Ethereum) by financial institutions will help push Bitcoin to $200,000 by 2025. . Ethereum is arguably the bigger beneficiary of the Trump 2.0 trade, with both gains exceeding 40% this year, Hougan said in an investor note: “Bitcoin ETF creation. Record inflows push Bitcoin to new all-time highs in 2024. “We don’t see this slowing down anytime soon. Combine demand with the reduction in new supply due to the April 2024 halving and new buying by businesses and governments,” the fund manager said. Grayscale’s Pandl said Bitcoin is in the “middle stage” of the current cycle and “there is no reason to think the cycle is close to an end based on past cycle experience, valuations or the macroeconomic environment.” Historically, the four-year Bitcoin cycle has looked like three positive years followed by one declining year. JPMorgan analyst Kenneth Worthington said in a mid-December report that the problem is that the legislative process is slow and any real policy effects may not be felt until the end of the year. “Although the new Trump administration will begin on Inauguration Day… we may not see immediate policy impact until (at least) nine to 12 months into his term,” Worthington said. “Like the SEC/CFTC chairman Key crypto-related positions will follow priority Cabinet minister positions, which are recommended for approval in late spring/early summer. “Here are three other crypto-related assets to watch in 2025: Ethereum. ), the digital silver to Bitcoin Gold, has suffered losses for much of the year as investors began to lose understanding of its investment case. But according to Bitwise’s Juan Leon, it’s expected to make a comeback in 2025. “One of the largest and most overlooked opportunities centers around tokenization: the process of bringing the vast market for real-world assets (RWA) to blockchain,” he said in a recent note to investors. “And today’s market is dominated by Ethereum Dominates. Grayscale’s Pandl said Ethereum is a natural starting point for Wall Street banks interested in getting involved in cryptocurrencies because it has “some regulatory clarity” and a nearly 10-year track record. “What you’re going to see next year is the integration of more traditional finance with cryptocurrencies, and I think that process will start with Ethereum,” he said. Additionally, new pro-cryptocurrency governments are likely to spur a stablecoin boom in the new year, and “the number one way to express your opinion on the continued adoption of stablecoins is through Ethereum,” Pandl added. JPMorgan’s Worthington said Coinbase expects a smooth regulatory environment to increase the number of tokens listed on exchanges like Coinbase and Robinhood and facilitate greater product innovation, such as staking. Citizens JMP’s Ryan said regulatory clarity in 2025 would benefit those “ancillary businesses that have been hampered”. “We think the industry will see huge growth in revenue as staking increases. We expect stablecoins to gain more traction in 2025 and this will be a big theme for Coinbase… It’s really on the block There’s been a reversal in some areas of blockchain technology. “On the other hand, there’s going to be more talk about companies like Coinbase facing more competition… We’re not worried about competition from Coinbase; they’re really going to take a piece of the growing pie. benefit from it,” he added. Oppenheimer analyst Owen Lau said Coinbase’s biggest development could come from its possible inclusion in the S&P 500 next year. “They are currently the largest financial company outside the S&P 500; the best case scenario is that they will be included in the first quarter of 2025,” Liu said. “To me, that’s a big driver for the stock” in addition to the continued adoption and trading of cryptocurrencies. Lau also emphasized that stablecoins may explode next year, and Coinbase has signed a 50/50 revenue sharing agreement with Circle, the issuer of USD Coin (USDC), to support the reserve interest income of stablecoins. MicroStrategy On Monday, Bitcoin agency MiroStrategy joined the Nasdaq 100 Index and filed a cap request to its shareholders on the same day, which will pave the way for the company to continue its aggressive Bitcoin buying strategy for two years. “The original idea was that MicroStrategy would issue $10 billion, $14 billion, and then $18 billion in securities over the next three years… In the past few months, the company has surpassed $18 billion in issuances… so The question now is: What comes next?” Benchmark analyst Mark Palmer told CNBC. MicroStrategy has been on a strong run since the election, up 57% since then and more than 400% for the year, but has also attracted the attention of some skeptics worried it could go the way of meme stocks. “At the end of the day, MicroStrategy is a leveraged play on Bitcoin, and if the price of Bitcoin drops significantly, then that’s a significant negative for MicroStrategy stock and the stock will likely trade accordingly,” Palmer said. “That being said, if If the price of MicroStrategy stock falls below its net asset value, the company could buy back its shares, creating a new way to add shareholder value.” —CNBC’s Michael Bloom contributed reporting.
