From November 1, 2023, to December 16, Bitcoin generated an average return of approximately 210% in crypto exchange prices and reached a new all-time high price above $108,000 as per the data gathered by CoinMarketCap.
During the identical timeframe, US stocks’ returns were significantly lower compared to the original and most secure cryptocurrency, which greatly outperformed in terms of investor earnings.
During that timeframe, the S&P 500 Index, which represents a wide range of U.S. stocks, increased by 45%. On the other hand, the tech-oriented Nasdaq Composite saw an even greater rise of 55%, as reported by Yahoo Finance data.
2023 marked an exceptional achievement for Bitcoin, as its performance set new records that surpassed the impressive growth seen in the stock market.
As a researcher delving into the world of crypto X, I find myself aligning with the predictions of some prominent analysts within our community and beyond. They foresee a resemblance to the cryptocurrency market landscape of 2025, a scenario that is intriguing and worth exploring further.
Below are six key factors pouring rocket fuel on the Bitcoin economy.
1. Crashing CX Balance to Bitcoin Price Ratio
In simpler terms, as more and more Bitcoins are being taken off cryptocurrency exchanges in 2025, this could be a very positive sign for the value of Bitcoin because there will be less Bitcoin available for people to buy, which can increase demand and potentially drive up its price.
As the available amount decreases significantly, Bitcoin is becoming increasingly valuable and demanding a higher cost. Additionally, the movement of Bitcoin off exchanges suggests that owners plan to keep their investments for an extended period, which could maintain Bitcoin’s price stability at its current value.
During the New Year’s break, the amount of Bitcoin held on cryptocurrency exchanges plummeted to a level not seen since February 2018, as indicated by data from Coinglass. Simultaneously, the value of BTC is rapidly approaching all-time highs.
2. Corporations, Governments Join Roaring ’20s
The upcoming involvement of the U.S. government in the Bitcoin market strongly indicates that a significant and enduring increase in Bitcoin’s value is imminent.
Beyond the incoming Trump Administration’s intentions to create a strategic Bitcoin reserve, an array of publicly listed companies are joining this competitive landscape as well.
Rather than continually auctioning off the 198,000 Bitcoin held by the Donald Trump Administration, which were primarily confiscated from illegal activities, they intend to keep their current holdings instead.
Senator Cynthia Lummis (R-WY) advocates for a more aggressive approach, aiming to amass approximately one million Bitcoins. She is keenly aware of and responsive to the transformative impacts that Bitcoin is having on the global financial system during this digital age.
The CEO of Japanese venture capital firm MetaPlanet predicted, during New Year’s Eve, that other governments in the Asia-Pacific area might imitate the U.S. by setting up their own national reserves.
In recent times, various corporations, including MetaPlanet, MicroStrategy from Virginia, and Semler Scientific based in California, are amassing Bitcoins as a financial strategy and capitalizing on its substantial market growth.
Plus, there’s the voracious demand on Wall Street for Bitcoin ETFs.
3. Bitcoin MVRV Z-Score: Screaming Bull Signal
In simpler terms, MVR (Market Value to Realized Value) is a financial ratio, while Z-score in statistics is a measure that describes how many standard deviations a data point is away from the mean (average).
This indicates the relationship between Bitcoin’s overall market value and the total amount of Bitcoins in circulation, considering their average market price when transactions occurred.
The latest piece published in Forbes elucidates the significance of realizing value by removing temporary price changes. In essence, it provides a more transparent perspective on Bitcoin’s genuine long-term market worth.
Previously, the Bitcoin MVRV (Market Value to Realized Value) ratio has indicated a potential market peak about two weeks away when it reached 7. However, as of January 1st, the MVRV for Bitcoin was below 3, suggesting that there is still significant potential for price increase ahead.
It appears quite likely that the value of Bitcoin might even more than double before the current phase concludes.
4. Bitcoin Hash Rate Tops New All-Time Highs
The rate at which Bitcoin transactions are processed (hash rate) reached unprecedented levels throughout December, following a sharp incline that suggests future growth up to 2025 based on historical trends.
The Bitcoin hash rate signifies how many computational operations per second the devices used for mining Bitcoin are performing to maintain the network’s security and ensure a current, accurate replica of the blockchain remains in place.
When Bitcoin’s value increases, it indicates a bullish trend because miners are compelled to consume electricity and allocate computer resources, otherwise used elsewhere, to run the fundamental software of the cryptocurrency. They undertake this task to earn the blockchain reward for their contribution towards maintaining Bitcoin, which is remunerated in freshly minted Bitcoins.
A growing hashing rate suggests that knowledgeable participants within the Bitcoin network are hopeful about an increase in Bitcoin’s future market value.
5. Macro Rate Cuts and US Federal Deficit
Here’s your real Trump bump for crypto assets.
Over his next term, Trump intends to implement a government administration favorable to the blockchain industry, while also aiming to reduce the federal budget deficit significantly, which could potentially lead to an increase in the budget.
2024 marked the third-largest annual budget deficit on record, amounting to $1.833 trillion. Notably, the Committee for a Responsible Federal Budget predicts that if Trump remains in office, his policies could lead to similar or larger deficits an additional four times per year.
It’s almost a given that the surge in macro tides will significantly inflate prices throughout the economy, with the most noticeable impact being felt in financial sectors such as the New York Stock Exchange, NASDAQ, and Bitcoin trading platforms.
6. Urgent Bitcoin Chart Technical Indicator
On December 31st, the value of Bitcoin seemed to be escaping from a typical 15-day bullish falling wedge pattern with diminishing trading volume, based on statistics gathered by CoinGecko.
Investors might need to move swiftly to hop aboard this upward trend. The year commenced with an uptrend from approximately $93,000 to over $97,000. Following a brief pullback, the asset appears ready for further growth, potentially even before Joe Biden’s inauguration on January 20th.
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2025-01-05 10:11