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April 24, 2024

Bitcoin Price Prediction: What Price Will Bitcoin Be in 2025?

April 24, 2024

With the long-awaited Bitcoin halving event now safely in the rearview mirror, investors everywhere are asking the same question, will history repeat itself yet again?

As the fourth Bitcoin halving occurred on April 17, 2024, the price of Bitcoin stood at $64,100.

The halving events, crucial to Bitcoin’s economic model, reduce the reward for mining new blocks by half, diminishing the rate at which new bitcoins are generated and enter circulation. 

This process is inherently deflationary and aims to mimic the extraction of a finite resource, akin to gold mining.

Bitcoin has Surged in the 12 Months Following Every Halving to Date

Bitcoin’s price performance has consistently shown impressive growth in the year following each of its halving events. 

The first halving in 2012 led to an extraordinary surge in Bitcoin’s value, with a 7,645% increase in the 365 days that followed. 

The second halving in 2016 also resulted in significant gains, with a 292% increase in the same period. 

The third halving in 2020 continued this trend, albeit at a slightly lower magnitude, with a 266% rise in Bitcoin’s price over the subsequent year. 

These patterns highlight the significant impact of halving events on reducing the supply of Bitcoin and increasing its price, driven by heightened demand amid reduced new supply entering the market.

Chart showing glassnode analysis that much of the gains following Bitcoin halvings have historically been in the 365 days following a halving
A key observation from a new Glassnode analysis is that much of the gains following Bitcoin halvings have historically been in the 365 days following a halving, the time window we have just entered.

What Was The Bitcoin Price at Each Halving?

To better understand the potential future trajectory of Bitcoin’s price, it’s insightful to look at the historical impact of previous halving events:

  • First Halving (2012): Occurred on November 28, 2012, with Bitcoin priced at $12.50. Following this event, Bitcoin saw a significant increase in value, peaking at over $1,000 in 2013.
  • Second Halving (2016): Happened on July 9, 2016, when Bitcoin was trading at $638.51. The year following the halving witnessed a remarkable bull run, culminating in a price of nearly $20,000 at the end of 2017.
  • Third Halving (2020): Took place on May 11, 2020, with the price at $8,475. Subsequent to this halving, Bitcoin again experienced substantial growth, eventually reaching an all-time high above $64,000 in April 2021 before seeins a significant pull back.
  • Fourth Halving (2024): Took place on April 20, 2024, with the price at $64,100. Analysts have high expectations for the coming cycle as it is the first cycle after the advent of Bitcoin ETFs and the first cycle after Bitcoin has reached a fresh all-time high in the run up to a halving event, two facts that are certainly no mere coincidence.
Bitcoin Halving Cycle Chart via Bitbo
Bitcoin Halving Cycle Chart via Bitbo

Post-Halving Analysis

The fourth halving has set the stage for another fascinating chapter in Bitcoin’s history. Given the historical precedence of price increases in the post-halving window, due to the reduced supply of new bitcoins against a backdrop of steady or increasing demand, a bullish outlook seems well justified. 

But this time is different. How so?

Get Ready for the ETF Effect

etf scrabble pieces amid crypto coins

The degree of adoption by both retail and institutional investors plays a critical role in the demand side of Bitcoin’s valuation. Positive sentiment and increased adoption can lead to higher prices, while regulatory crackdowns or macroeconomic downturns might have the opposite effect.

The introduction of new Bitcoin ETFs (Exchange-Traded Funds) could significantly magnify Bitcoin’s price growth this cycle by providing an accessible and regulated avenue for institutional and retail investors to gain exposure to Bitcoin for the first time ever without directly purchasing the cryptocurrency. 

These ETFs function by holding actual Bitcoin, thus increasing demand and reducing the available supply in the market. Increased accessibility through ETFs typically attracts more significant investments from sectors of the market previously hesitant about direct cryptocurrency engagements due to security concerns or regulatory compliance issues.

Additionally, ETFs can lead to higher liquidity and potentially more stable prices in the long-term, albeit with amplified price movements due to larger capital inflows and outflows. This broadened investor base, coupled with the ease of trading and heightened visibility, might further drive Bitcoin’s price upward in a vicious cycle as more investors catch a case of FOMO and seek to include digital assets in their portfolios.

The Lightning Network is Gaining Ground

bitcoin struck by lightning

Innovations within the Bitcoin network, such as improvements in scalability and security, primarily, the rapidly evolving adoption of the Lightning Network, could enhance its utility and appeal, potentially driving up price.

The Lightning Network, a layer-2 payment protocol built on top of the Bitcoin blockchain, represents a pivotal advancement in scaling Bitcoin transactions. By enabling faster and cheaper transactions, the Lightning Network can significantly broaden Bitcoin’s utility in everyday transactions, potentially opening up new markets. For example, it could revolutionize microtransactions, which are impractical on the main blockchain due to high fees and slower confirmation times. 

This makes it viable for a variety of small-scale transactions such as paying for coffee, digital content, or even tips on social media, thereby expanding Bitcoin’s use in everyday commerce. Additionally, the Lightning Network enhances Bitcoin’s suitability for remittance payments, providing a quicker, cheaper alternative to traditional money transfer services, especially in regions with underdeveloped financial infrastructure. This could increase Bitcoin’s adoption in countries with high remittance flows, integrating larger segments of the global population into the digital economy.

What Price Will Bitcoin be in 2025?

The million-dollar question, but is a million dollars far off? Considering the factors above and historical trends following halving events, we can expect Bitcoin’s price one year from now might well fall in a range between $100,000 and $500,000. This forecast accounts for growing adoption, and the historical price patterns post-halving.

As of April 2024, several leading analysts have projected a range of potential prices for Bitcoin, reflecting both optimism and market realism. Here’s a summary of some of the latest Bitcoin price predictions:

  1. Standard Chartered predicts a possible high of $250,000 for Bitcoin by 2025, influenced by strong inflows into spot BTC ETFs, which they expect to continue boosting the price​ (99 Bitcoins)​.
  2. Aurelien Ohayon from Xorstrategy is highly optimistic, suggesting Bitcoin could surge to $500,000 by late 2025, driven by factors including the approval of spot BTC ETFs in the US and the effects of the 2024 halving​ (BeInCrypto)​.
  3. A panel of 50 experts suggests a slightly more conservative average price of $249,578 by 2025, citing continued growth in institutional demand and the broadening use of Bitcoin as a store of value​ (CoinMarketCap)​.
  4. Finbold interviewed finance experts who project an average price of $87,000 by 2025 driven by wider institutional adoption(Finbold)​.

It is also crucial to acknowledge the inherent volatility and unpredictability of Bitcoin. External shocks, whether economic, technological, or regulatory, could drastically alter the trajectory predicted by historical trends and as with all investments, past performance does not guarantee future results.

The Outlook Has Rarely Looked So Bullish

While the future price of Bitcoin is uncertain, the historically repeated impact of halving events combined with the recent advent of ETFs provides a strong foundation for speculative optimism. 

Potential investors should perform their due diligence and consider a variety of scenarios and risks when contemplating their investment decisions in Bitcoin, and always remember the value of self-custody.

Whether Bitcoin reaches the heights of these predictions, remains stable, or even experiences a decrease, it appears well set to remain at the forefront of financial technology innovation.

As always, this article does not constitute financial advice. You should be sure to do your own research and consult a professional financial advisor before making a major investment decision.

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