After a record-breaking year in 2024, Bitcoin’s price has cooled off in recent weeks. However, experts predict a potential re-ignition in 2025, fueled by growing decentralized finance (DeFi) applications and anticipated regulatory clarity under the Trump administration.
Bitcoin’s surge past $100,000 in 2024 was largely attributed to President-elect Trump’s victory, alongside the introduction of Bitcoin ETFs and the Federal Reserve’s easing policies. Joe McCann, founder, CEO, and CIO of Asymmetric, a venture capital fund investing in Bitcoin-based startups, believes the market is anticipating another price run-up around Trump’s inauguration in January 2025, based on options market activity. He cautions, however, that Bitcoin remains a volatile asset, although its maturity is leading to reduced volatility.
McCann highlights three key catalysts that propelled Bitcoin’s growth in 2024: the Bitcoin ETF, the Fed’s easing policy, and Trump’s election. Looking ahead to 2025, he anticipates continued institutional adoption and potential “wildcards” like a strategic Bitcoin reserve, which could significantly impact the cryptocurrency’s price.
Beyond its role as an investment asset or a strategic reserve, the future of Bitcoin lies in its underlying technology, the blockchain. McCann points to a burgeoning ecosystem of companies building DeFi products on the Bitcoin blockchain, similar to existing applications on platforms like Ethereum and Solana. While other blockchains are currently more developed in the DeFi space, Bitcoin’s substantial market capitalization positions it for significant growth as these applications mature. McCann cites examples like Bitcoin lending protocols as evidence of this ongoing innovation.
A key factor in Bitcoin’s projected growth is the anticipated regulatory environment under the Trump administration. McCann expresses optimism about the administration’s approach, describing it as a “new world” for the crypto industry. He believes the focus will be on “common sense regulation” that fosters innovation rather than stifling it. Key policy changes expected include the passage of a stablecoin bill and potential advancements in market structure legislation. McCann emphasizes the importance of regulatory clarity, particularly regarding the classification of crypto assets as securities or commodities. A clear determination by regulatory bodies like the SEC and CFTC could significantly impact how crypto assets are issued and potentially pave the way for them to resemble dividend-paying stocks.
