Following the announcement of new global tariffs on April 2, Bitcoin (BTC 7.58%) began to decline. It is now trading below $80,000, a price that would have seemed unimaginable just two months ago. On January 20, Bitcoin reached an all-time high of $109,000.
Here’s the encouraging news — a surprising number of investors still harbor a relatively optimistic outlook on Bitcoin’s potential for 2025. According to data from the Kalshi online prediction market, 35% of investors expect Bitcoin to reach $125,000 this year, while 16% believe it could still make its way to $150,000. What would it take for Bitcoin to achieve these ambitious price goals?
“Old” Catalysts for Bitcoin
To simplify this challenge, I’ve mentally categorized Bitcoin’s catalysts into two groups: “old” and “new.” The “old” catalysts were relevant from Election Day to Inauguration Day, whereas the “new” catalysts may arise due to the recent tariff changes.
The 35% of investors who are still optimistic about Bitcoin hitting $125,000 this year are likely depending on the old catalysts to facilitate that outcome. These catalysts were succinctly described by investment firm Bernstein, which forecasted in January that Bitcoin could reach $200,000 by the end of 2025.
This scenario operates under the assumption that we are in the “Infinity Age” of crypto, hinting at greater mainstream adoption of Bitcoin and its deeper integration into the global financial framework. It foresees accelerated investments into spot Bitcoin ETFs and suggests that more companies may adopt the MicroStrategy (now referred to as Strategy) (NASDAQ: MSTR) model of incorporating Bitcoin into their balance sheets. It even implies that AI could intersect beautifully with crypto, potentially leading to innovation in Bitcoin mining.
Everything seemed to align for a positive trajectory. There was a Crypto Summit at the White House in March, and the Trump administration announced the establishment of a Strategic Bitcoin Reserve. Concurrently, many of the regulatory constraints previously hindering Bitcoin appeared to be easing.
However, the market volatility stemming from the new tariff framework appears to jeopardize these old catalysts. If the Trump administration is simultaneously negotiating tariffs with 50 different nations while attempting to stabilize the global financial system, do you really think it will concentrate on new Bitcoin initiatives?
“New” Catalysts for Bitcoin
A fresh set of catalysts may be necessary for Bitcoin to climb higher this year, as the market has likely factored in all the old catalysts.
One scenario that could propel Bitcoin upwards is if investors begin to view Bitcoin as a “safe haven” asset amid the current turbulence. With asset prices plummeting globally and tariffs increasing, investors may opt to “bear-proof” their portfolios by accumulating Bitcoin as a form of “digital gold.” If that occurs, it could lead to record inflows into spot Bitcoin ETFs, consequently raising Bitcoin’s price.
Nonetheless, skepticism regarding Bitcoin as a long-term store of value will always persist. At least physical gold has a tangible presence. In a worst-case scenario, you could exchange your gold bars for goods of value. But what can you do with a completely virtual asset that only exists as digital data?
Image credit: Getty Images.
Another potential catalyst relates to China. This is quite speculative and hinges on whether China might lift its ban on Bitcoin. Since 2021, crypto mining and trading have been prohibited in China. But what if China reverses this ban? What if over a billion people suddenly had the opportunity to buy and hold Bitcoin?
Currently, online prediction markets assign only a 2% chance to this occurring by June 30. While that’s low, it is not entirely negligible. If the trade war between the U.S. and China escalates further, China might consider abandoning dollar-denominated assets in favor of Bitcoin. Keep in mind that spot Bitcoin ETFs are already operational in Hong Kong.
What Lies Ahead for Bitcoin?
If Bitcoin can identify the appropriate catalysts, it still holds the potential to reverse its fortunes and surpass $100,000 once again. It could even reach $125,000, as approximately one-third of investors currently anticipate.
However, if you’re relying on pro-crypto enthusiasm to drive Bitcoin higher this year, you may be adhering to an outdated mindset that no longer accurately reflects the current economic landscape. It’s essential to update that perspective in light of the evolving tariff situation.
