Bitcoin (BTC) has had a remarkable year, recently reaching an all-time high of $108,268. This surge was driven by optimism surrounding a more crypto-friendly stance under President-elect Donald Trump and speculation about the potential Bitcoin strategic reserve.
However, the cryptocurrency market remains divided, with investors navigating a mix of bullish institutional interest and bearish macroeconomic signals.
These mixed signals have sparked speculation across the market, leaving investors questioning where Bitcoin, the world’s leading cryptocurrency, could head in 2025.
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As of press time, Bitcoin is trading at $98,015, reflecting a 5% decline over the past week. On a monthly chart, Bitcoin has posted a modest gain of 0.05%, highlighting the market’s persistent volatility.
Mixed market signals
Institutional players like MARA Holdings (NASDAQ: MARA) and Riot Platforms have continued to expand their Bitcoin reserves, signaling long-term confidence in the asset.
Meanwhile, MicroStrategy (NASDAQ: MSTR) marked its seventh consecutive week of Bitcoin acquisitions, purchasing 5,262 BTC at an average price of $106,662, an investment of $561 million.
Adding to the optimism, billionaire investor Ray Dalio recently described Bitcoin as a hedge against a looming “debt money problem,” further endorsing its potential as a global financial asset alongside gold.
Despite these bullish developments, bearish pressures emerged following hawkish statements from the U.S. Federal Reserve after its December 17 decision to cut interest rates by 25 basis points.
Fed Chair Jerome Powell’s comments about Bitcoin reserves further dampened market enthusiasm, briefly pushing Bitcoin below the $100,000 mark. The Fed’s forecast of only two rate cuts in 2025, falling short of market expectations for three or four cuts, also raised concerns among investors.
Institutional demand vs. miner production
The imbalance between institutional demand and Bitcoin’s limited supply is becoming increasingly evident. Over the past week, Bitcoin exchange-traded funds (ETFs) recorded inflows of $423.6 million, equivalent to 4,349 BTC.
In contrast, miners produced just 2,250 BTC during the same period. This discrepancy highlights tightening liquidity, with miners struggling to meet growing institutional demand. December alone has seen $5.5 billion in Bitcoin ETF inflows, reinforcing institutional confidence in the cryptocurrency.
On the supply side, the squeeze is even more pronounced. Data from CryptoQuant reveals that the total amount of Bitcoin readily available for sale—across exchanges, miners, and over-the-counter desks—has plummeted to 3.397 million BTC, a decline of 678,000 BTC so far this year.
This marks the lowest level since October 2020. Compounding the issue, the liquidity inventory ratio, which measures how many months of demand the current sell-side stock can sustain, has dropped dramatically to just 6.6 months, compared to 41 months at the beginning of October, with demand showing no signs of waning.
ChatGPT’s Bitcoin price prediction
ChatGPT predicts that Bitcoin could climb to $200,000 in 2025, supported by historical trends and current market dynamics.
Key drivers of this forecast include increasing institutional adoption, tightening supply following the recent halving, and sustained inflows into Bitcoin ETFs. These factors are expected to fuel long-term demand despite potential market turbulence.
This projection aligns closely with Bitwise, which anticipates Bitcoin surpassing $200,000, and potentially reaching $500,000, tied to the possibility of a federal Bitcoin reserve.
Standard Chartered similarly maintains a $200,000 target, highlighting robust institutional interest, while VanEck offers a slightly more conservative estimate of $180,000, warning of heightened volatility throughout the year.
Despite differing specifics, the consensus points to a bullish outlook for Bitcoin in 2025, tempered by the likelihood of market swings.
Featured image via Shutterstock
