In Q1 2025, Bitcoin stands to gain approximately $612 billion in fresh liquidity, which could help alleviate worries among investors about potential delays in crypto regulation within the U.S., implying a more stable and prosperous future for this digital currency.
At 8:00 am UTC on January 8, Bitcoin (BTC) saw a drop of almost 6% over the preceding 24 hours, dipping below the $100,000 threshold. This level has acted as a significant psychological barrier since December 19, according to data from CryptoMoon Markets Pro.
As Donald Trump’s inauguration as president on January 20th brings optimism to the cryptocurrency sector, any postponements in establishing cryptocurrency regulations may lessen investor confidence and potentially lower market values.
However, the influx of approximately $612 billion in new funds to the US Treasury by March 2025, as suggested, could potentially offset any dissatisfaction resulting from regulatory changes, according to Arthur Hayes, one of the co-founders of BitMEX. In a blog post published on January 7th, he expressed this viewpoint.
“A letdown by team Trump on his proposed pro-crypto and pro-business legislation can be covered by an extremely positive dollar liquidity environment, an increase of up to $612 billion in the first quarter.”
As suggested by Hayes, the pace of money printing is expected to increase following Trump’s inauguration. This could potentially result in a peak for Bitcoin in March, possibly preceding a period of correction.
Hayes indicated that the motivation for the correction is expected to stem from dissatisfaction about the slow pace of cryptocurrency policy development during the Trump administration.
In simpler terms, Hayes wrote that investors might quickly understand by January 20th that Trump has only about a year left to make any policy changes. This understanding could trigger a severe drop in the value of cryptocurrencies and stocks related to Trump’s second term (Trump 2.0 equity trades).
Regardless of a possible regulatory setback, analysts continue to express positivity regarding Bitcoin’s price trend, predicting that it may reach a peak of over $150,000 by late 2025. This optimism is based on forecasts suggesting a significant increase in the global money supply up to $20 trillion, which could potentially draw in around $2 trillion worth of investment into Bitcoin.
Can Bitcoin recapture $100,000 ahead of Trump’s inauguration?
It seems that the latest drop in Bitcoin’s value might be due to a decrease in investment from institutions during the holiday period.
Institutional investors often reinvest their funds at the start of a new year. This influx of capital, also known as an institutional “liquidity boost,” could potentially push Bitcoin’s price above $100,000 before Inauguration Day on January 20th, predicts Binance Research.
“While it is possible for BTC to recapture $100K ahead of the Trump inauguration on expectations of positive crypto regulation, the market will need to see continued supportive conditions to maintain such levels.”
Maintaining these high levels for an extended period is contingent on several aspects, primarily how cryptocurrency regulations are enacted and the monetary policy direction of the Federal Reserve in 2025, as per Binance Research’s assessment.
Institutional investors expressing confidence about Bitcoin as Trump’s inauguration approaches. On January 7, a company listed on the New York Stock Exchange, KULR Technology Group, forecasted that Bitcoin could reach $200,000 by 2025 following their purchase at a price of $97,000.
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2025-01-08 13:07