Bitcoin price surpassed the $50,000 mark a few days ago and recently even surpassed the trillion-dollar mark in market capitalization. The big bull run could really start in 2024 and especially 2025.
Bitcoin price has made strong gains so far in 2024. Bitcoin rose from a value of $44,000 to over $52,000 in 6 weeks. In particular, the Bitcoin ETFs, approved in early January, had a very bullish influence. The price of Bitcoin has increased considerably, especially in the last 2 weeks.
Massive price gains for Bitcoin may be evident in the next 2 years. Below are five reasons why the price of Bitcoin may rise to $500,000 by 2025.
Bitcoin Halving at the End of April 2024
Throughout its history, the price of Bitcoin has always increased tremendously following a Bitcoin halving. With Bitcoin Halving, the number of new Bitcoins hitting the market each day is halved again. This supply shock has always caused the price of Bitcoin to skyrocket in the year and a half since. There is a good chance this will happen again.
One of the prominent figures in the crypto industry, who shows an optimistic view on the price of Bitcoin in the future, is Will Clemente, co-founder of the firm Reflexivity Research, who recently said that Bitcoin will become scarcer than gold, in regards to the stock-flow relationship, after the next halving.
Low Bitcoin Liquidity on Stock Exchanges
There has been an interesting trend in recent months. The supply of Bitcoins on the exchanges is decreasing and more and more people are holding their BTC for the long term. This means that the true supply of liquid Bitcoins is only between 2 and 3 million. This means that high demand can cause the price to rise much faster and steeper.
Great Interest in Bitcoin ETFs
Bitcoin ETFs have been the most popular asset class since the introduction of the ETF financial product. Billions of capital flowed into Blackrock, Fidelity and Co’s Bitcoin ETFs in the early days. Heavy capital outflows from the Grayscale ETF initially led to losses in the price of Bitcoin. But now we are seeing massive inflows in the triple-digit millions. The demand could cause the price of Bitcoin to skyrocket in the coming months as supply dwindles.
In November last year, during an exclusive interview on CNBC’s Squawk on the Street, MicroStrategy president Michael Saylor noted that Bitcoin could become a treasury asset for many companies, just as it is for his company MicroStrategy, which holds a total of 158,400 BTC, currently.
Probable Fall in Official Interest Rates
In 2023, central banks in the United States and Europe have raised interest rates extremely sharply to control inflation. This caused huge losses for many assets, but they were able to recover. Interest rate cuts are expected in the next two years. This makes money cheaper again and investments in tangible assets like Bitcoin should increase.
FOMO and Mass Speculation
If the price of Bitcoin were to rise again to new all-time highs and even surpass the $100,000 mark, new investors who would not want to miss out on the hype would return to the market. Bitcoin is emerging into the mainstream and FOMO is spreading among the average investor. This is the time when speculation can start the parabolic bull run like in 2017. That could take the price of Bitcoin to $500,000.
By Audy Castaneda
