Bitcoin could hit $160K in 2025, fueled by improving macro conditions

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Bitcoin could hit $160K in 2025, fueled by improving macro conditions

crypto :: 2024-12-13 :: source - cointelegraph

By Zoltan Vardai

Bitcoin’s price could surge to $160,000 in 2025, bolstered by improving macroeconomic conditions and easing global monetary policies, according to a report from crypto services provider Matrixport.

Bitcoin BTC $100,367 surpassed the $100,000 high for the first time on Dec. 6, in a long-awaited milestone for crypto history.

In a bullish signal for the Bitcoin price, the European Central Bank (ECB) lowered its key interest rates by 25 basis points to 3% on Dec. 12 in an effort to increase investment and economic activity in the region.

Jag Kooner, head of derivatives at Bitfinex, noted the global trend of easing interest rates could drive investors toward risk-on assets like 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.”

Improving macroeconomic conditions could be a significant catalyst for Bitcoin price, considering this is the People’s Bank of China’s (PBOC) first interest rate cut in 14 years.

*BTC/USD, 1-month chart. Source: Cointelegraph*

However, the Federal Reserve’s incoming monetary decision on Dec. 18 could significantly impact Bitcoin’s price trajectory until the end of 2024.

*Bitcoin to $160,000 by 2025. Source: Matrixport*

This dynamic could bolster Bitcoin price to over $160,000 in 2025, according to a report shared by Matrixport in a Dec. 13 X post. Matrixport stated:

“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 eagerly await the United States Federal Reserve’s final monetary policy decision for 2024 on Dec. 18.

The odds of a 25 basis-point rate cut currently stand at 96.7%, up from 82.5% a month ago, according to the latest data from the CME FedWatch tool.

*Interest rate cut predictions. Source: CME FedWatch tool*

An interest rate cut by the Fed would help Bitcoin finish the year at “record-breaking levels,” Kooner said. “Lower interest rates typically reduce borrowing costs, encouraging greater risk-taking among investors. Cryptocurrencies, as high-risk assets, often see inflows during such periods of increased liquidity. Additionally, the psychological boost from a dovish monetary stance can improve investor sentiment,” he added.

Bitcoin’s price is poised for further gains following a $1.7 billion reduction in leveraged trading positions on Dec. 9. Kooner believes this deleveraging sets the stage for the next market rally, stating, “Excessive leveraged long positioning has been removed, creating a foundation for the next leg up in Bitcoin’s price.”

In crypto trading, leverage refers to the amount of borrowed funds used for trading positions.

On Nov. 12, Kris Marszalek, the co-founder and CEO of Crypto.com, warned that the crypto market will need deleveraging before Bitcoin can breach $100,000 — nearly a month before BTC crossed the six-figure price tag for the first time.