As a seasoned researcher who has navigated the volatile world of cryptocurrencies for over a decade, I have seen my fair share of bull markets and bear markets. However, I must say that the current momentum behind Bitcoin is truly remarkable. The recent surge past $100,000 and the optimistic projections for it to reach $160,000 in 2025 by Matrixport are indeed intriguing.
According to a report from Matrixport, a cryptocurrency service provider, it’s predicted that Bitcoin’s value may reach $160,000 by the year 2025, driven by enhanced overall economic conditions and more lenient monetary policies worldwide.
On December 6th, Bitcoin (BTC) reached an all-time high of $100,000, marking a significant and eagerly anticipated achievement in the annals of cryptocurrency history.
On December 12th, the European Central Bank (ECB) reduced its main interest rate by 0.25%, bringing it down to 3%. This move was aimed at boosting investment and stimulating economic growth within the region, which could potentially lead to a positive impact on Bitcoin’s price.
As reported, Jag Kooner – head of derivatives at Bitfinex – pointed out that the worldwide tendency to lower interest rates might prompt investors to seek high-risk investments such as Bitcoin.
“This dual easing could spur capital flows into risk-on markets, including crypto. Combined with the traditional optimism seen in December markets, this may fuel a potential “Santa rally,” driving Bitcoin and other cryptocurrencies higher as investors allocate more capital into the space.”
Enhancing economic conditions on a larger scale might serve as a notable trigger for Bitcoin’s price, given that the People’s Bank of China (PBOC) has reduced its interest rates for the first time in 14 years.
The upcoming monetary move by the Federal Reserve on December 18 may have a substantial influence on Bitcoin’s price trend through the end of 2024.
According to a report shared by Matrixport in a recent post, this situation could potentially drive the value of Bitcoin up to around $160,000 by the year 2025. In simpler terms, Matrixport predicts that these conditions might lead to such a significant increase in Bitcoin’s price.
“Our projections indicate that Bitcoin could reach $160,000 in 2025, representing a +60% upside. This target aligns with the sustained demand for Bitcoin ETFs, the evolution of the macroeconomic environment and the expanding global liquidity pool.”
Crypto market deleveraging complete for the next leg up — Bitfinex
Bitcoin investors anxiously look forward to the U.S. Federal Reserve’s last monetary policy verdict of 2024, which is due on December 18th.
The probability that the Federal Reserve will lower interest rates by 0.25% is now estimated to be 96.7%, an increase from 82.5% as per the most recent figures provided by the CME FedWatch tool.
According to Kooner, if the Fed decreases interest rates, Bitcoin could reach unprecedented heights by year-end. He explains that reduced interest rates make borrowing less expensive, which encourages investors to take on more risk. Since cryptocurrencies are considered high-risk assets, they often attract investment during periods of increased liquidity. Furthermore, a lenient monetary policy can create a positive psychological effect among investors, enhancing their overall sentiment towards investing in Bitcoin.
After a decrease of approximately $1.7 billion in Bitcoin’s leveraged trading positions on December 9th, there are signs that the price could rise even more. Financial analyst Kooner suggests that this reduction in leveraged positions lays the groundwork for the next market surge, as he explains, “The excessive long positioning has been reduced, paving the way for a potential increase in Bitcoin’s value.
In crypto trading, leverage refers to the amount of borrowed funds used for trading positions.
On November 12th, Kris Marszalek, who is both the co-founder and CEO of Crypto.com, cautioned that the cryptocurrency market must undergo deleveraging prior to Bitcoin reaching a value of $100,000 – about a month before Bitcoin exceeded the six-figure price mark for the first time.
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2024-12-13 15:11