It’s been a landmark year for cryptocurrency, and in particular the industry’s flagship: Bitcoin(CRYPTO: BTC).
With just a few weeks left in 2024, the price of Bitcoin has increased by 140% and has surpassed the price of $100,000 per coin. Although Bitcoin has fluctuated above and below the $100,000 mark since then, I think there are plenty of reasons to remain optimistic about the future of the cryptocurrency.
Let’s look at some favorable implications for Bitcoin in 2025, and assess where it could be trading this time next year.
Gary Gensler is one of the most intriguing personalities in the financial world today. As a former investment banker at Goldman SachsGensler initially focused on mergers and acquisitions (M&A) before transitioning to other roles in trading, fixed income and treasury.
But in the late 1990s, Gensler left Wall Street to pursue a career in the public sector. Gensler has served in various roles under Presidents Clinton, Obama and now Biden. Since 2021, he has served as chairman of the Securities and Exchange Commission (SEC).
On November 20, the SEC issued a statement that Chairman Gensler will step down from his role at the SEC on January 20. While this appears to indicate Chairman Gensler is retiring, consider the timing of his resignation: January 20. 2025 is President-elect Trump’s inauguration day.
Image source: Getty Images.
In my opinion, one of the main reasons why Gensler is leaving the SEC has to do with his philosophy around the crypto landscape versus that of newly elected President Trump. Trump appears to be taking a more open-minded approach to crypto legislation, listening to some of the ideas touted by prominent executives at crypto companies such as Coin base. While the crypto industry has made some progress under Gensler – for example the introduction of spot Bitcoin ETFs – I think the new administration is more pro-crypto from a regulatory perspective than what is currently in place.
The first step in moving the ball forward on crypto regulation starts with the Financial Innovation and Technology for the 21st Century Act (FIT21). This bill was adopted by the House of Representatives in May. At its core, the FIT21 aims to provide more thorough guidelines around crypto regulations. One of the prominent parts of the bill is to determine how the SEC and the Commodity Futures Trading Commission (CFTC) will oversee digital assets.
President-elect Trump has nominated pro-crypto businessman Paul Atkins to succeed Gensler as chairman of the SEC. In addition, the Republican Party will have majority control in both the House of Representatives and the Senate. Such dynamics should aid Atkins’ Cabinet approval process while giving Trump a fast track to signing FIT21 into law.
In addition to the above points, another major change expected under the new Trump administration is the imposition of tariffs. While it is too early to tell now what impact the tariffs will have on the economy, there is a very real possibility that the cost of goods and services will rise in the short term. As a result, consumer purchasing power could weaken, which could ultimately slow economic growth for a period of time.
This dynamic would have a direct impact on companies and the stock market. If companies start showing signs of slowing sales or weaker profit margins, the stock market could sell off. During situations of widespread economic uncertainty, investors tend to flock to alternative assets. Given the increasing adoption of crypto, I wouldn’t be surprised if prominent cryptocurrencies like Bitcoin start to rise as investors add it as an additional layer of diversification to their portfolios.
The chart below shows Bitcoin’s price throughout 2024. After a short-lived shock earlier this year, Bitcoin’s price movements were actually quite mundane throughout the spring and summer. It wasn’t until around the time of the election that Bitcoin started to rise significantly.
Bitcoin price data by YCharts
I think the recent momentum that Bitcoin is fueling could indicate optimism about how the new administration will positively impact and change the crypto landscape.
While I can’t say with certainty which direction Bitcoin’s price will move, history suggests it should continue to rise under the new Trump administration. With new legislation looking likely and a more pro-crypto administration on the way, I am cautiously optimistic that Bitcoin’s price will continue to rise in the coming year.
Consider the following before buying shares of Bitcoin:
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Adam Spatacco has positions in Coinbase Global. The Motley Fool holds positions in and recommends Bitcoin, Coinbase Global, and Goldman Sachs Group. The Motley Fool has a disclosure policy.
Where will Bitcoin be in 1 year? was originally published by The Motley Fool
