The outlook for cryptocurrency investment in 2025 remains positive, with market analysts anticipating a potential Bitcoin (BTC) “super cycle” driven by Donald Trump’s return to the White House and his administration’s pro-Bitcoin policies.
While the Bitcoin price recently pulled back from its late-2024 peak as investors took profits amid concerns over a slower than expected pace of interest rate cuts, analysts from local crypto exchange Bitkub said the Trump administration’s clear commitment to supporting the cryptocurrency industry has significantly boosted market confidence.
These factors drove the price of Bitcoin up by 145% in 2024, reaching an all-time high of US$108,350 in December. This surge fuelled expectations for a potential super cycle this year.
Critical factors that could shape market dynamics include pro-crypto policies under the Trump administration, US monetary policies, and institutional investments through spot Bitcoin exchange-traded funds (ETFs).
“2025 is shaping up to be a pivotal period for Bitcoin and the broader cryptocurrency market. Trump’s presidency and proposed policies could provide substantial support for long-term growth,” said Bitkub’s research team.
Ahead of taking office, Trump’s team has outlined ambitious plans to position the US as a leader in cryptocurrency.
The proposed Bitcoin Act includes several notable measures, such as accumulating BTC as a reserve asset, purchasing 200,000 BTC annually over five years, or 1 million BTCs in total, enforcing a minimum holding period of 20 years for reserve assets, as well as adopting a proof-of-reserve system to enhance transparency.
However, this ambitious plan faces hurdles as Federal Reserve chairman Jerome Powell said the proposal would require congressional approval and may be infeasible under current frameworks.
The Fed signalled a more gradual approach to rate cuts. Its December projections show interest rates decreasing to 3.9% by the end of 2025, higher than the 3.4% predicted in its September outlook.
This slower pace of monetary easing has placed pressure on high-risk assets, including stocks and cryptocurrencies.
Analysts warn continued tight monetary policies could weigh on the crypto market in 2025 unless the Fed pivots more aggressively.
Bitkub said spot Bitcoin ETFs remain a focal point for institutional investors.
As of year-end 2024, ETF issuers collectively held 1.13 million BTC, valued at roughly $109 billion, up 73.6% for the year.
While institutional inflows were robust throughout 2024, the recent price surge prompted some profit-taking.
Institutional behaviour will play a critical role in shaping market stability and sentiment in 2025, according to Bitkub.
“However, the success of the market will largely depend on the Fed’s monetary policy and institutional investors,” noted the exchange.
“A faster monetary policy easing could provide a significant tailwind, while a more cautious approach might limit growth.”
Bitcoin’s performance remains a key barometer. As of Jan 14, Bitcoin was trading near $95,000, maintaining a 121% return over the past year.
While optimism remains high, global uncertainties and market volatility are risks that require close monitoring, according to Bitkub.
For crypto investors, 2025 could offer significant opportunities, provided they navigate the market with caution, noted the exchange.
