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Prediction: Bitcoin to Rise in 2025
Despite recent volatility, Bitcoin’s immediate and long-term future looks attractive.
It may not seem like it, but Bitcoin (Bitcoin 4.34%) is on track to reach a new all-time high in 2025. Even with the recent decline and its failure to gain substantial momentum, the cryptocurrency is following a similar pattern to past years, when it reached new levels. tall.
As for the path it will take between now and then, only time will tell, but with a little math it will be clear that 2025 is shaping up to be a great year for the world’s first cryptocurrency.
Image source: Getty Images.
The patterns are becoming clear
Bitcoin has demonstrated clear and notable price patterns throughout its history, occurring over the course of four years. Typically, what we see is a bear market like the one in 2022, a notable recovery in the following year, continued progress in the third year when the halving occurs, and then reaches a cyclical peak in the year following the halving.
We are currently in year three, the year of the halving. And this time around, Bitcoin appears to be following the traditional four-year pattern, just like in recent cycles. This means we can use some of its historical performance to get a sense of what 2025 might hold.
Looking to 2025
Past performance, of course, is no guarantee of future results. But a little speculation can be healthy and help us assess overall long-term potential. With that said, let’s get back to the four-year model.
In years where a halving occurs, Bitcoin increases on average by about 125%. If this happens this year, then it means that we could expect to see Bitcoin reach almost $100,000 by the end of 2024. This price was derived by calculating a 125% increase from the price of Bitcoin at the beginning of the year, which was $44,000.
So let’s fast-forward to late 2024 and early 2025. On average, in the year following a halving, Bitcoin returns a stunning 400%. The most obvious reason for such a colossal performance in these years is that the market begins to adapt to the halving, which means that in these years the supply shock finally materializes. If this happened again and Bitcoin finished 2024 in line with the historical average, its price would reach around $500,000 in 2025.
Final thoughts to keep in mind
Before we conclude, it’s worth pointing out that, as fanciful as this number may seem, Bitcoin often outperforms expectations in bull markets. He made a name for himself this way. So while $500,000 might seem outlandish, stranger things have happened. For example, the cryptocurrency jumped 850% in 2011.
But to be completely honest, whether or not Bitcoin reaches this price in 2025 shouldn’t matter much to investors. What is key is to understand the long-term dynamics that make it a unique investment. The price is driven by its supply and demand dynamics, which change favorably as the years pass.
For example, its supply is limited to 21 million coins (19.7 million are currently in circulation), and this scarcity is one of its defining characteristics. And demand is increasing. Institutional interest has increased in recent years, and the introduction of find bitcoin exchange traded funds it will further democratize access. Retail interest also remains strong, with an ever-increasing number of individuals viewing it as a store of value.
Then there’s the decentralized nature of Bitcoin and its growing role in a world where trust in traditional financial systems is faltering. Digital currency offers an alternative not subject to government control or monetary policy, a growing luxury. legal tender continue to swell.
Investors would be wise to focus on these dynamics rather than fixating on specific price targets. Bitcoin’s potential to redefine finance and serve as a robust store of value remains strong, making it an attractive investment especially as it experiences a pronounced sell-off.
Mr. Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has one disclosure policy.