Bitcoin Price Predictions for 2025: The Trump Effect

2024 has been a year like no other for Bitcoin, with major milestones for the cryptocurrency's long-term viability and adoption being crossed consistently

2024 has been a year like no other for Bitcoin, with major milestones for the cryptocurrency’s long-term viability and adoption being crossed consistently throughout the year.

January saw SEC approval for Spot Bitcoin ETFs finally bringing the world’s most famous digital currency to Wall Street, driving BTC to a fresh all-time high of almost $73,100 in the first quarter.

One month later, Bitcoin’s fourth halving event occurred, a pre-programmed process that occurs every four years to actively halve the distribution of BTC to the coin’s miners as part of its proof-of-work (PoW) protocol.

Halving events are bullish because they double Bitcoin’s scarcity overnight, slowing down their distribution in the process. Each year following a halving event, BTC has broken new ground in steep price rallies towards all-time highs.

The approval of Spot Bitcoin ETFs and the coin’s pre-programmed halving event meant that analysts and enthusiasts alike anticipated a major bull market arriving in late 2024 and early 2025, but the resounding US election victory for Donald Trump, a candidate who spoke of Bitcoin at length on the campaign trail, be the catalyst to push the cryptocurrency higher than previously imagined.

Is Bitcoin’s Trump bump set to be sustained over the coming months? Let’s take a deeper look at what to expect in 2025 for the answers:

Learning From Stock-to-Flow

In a famously volatile and sentiment-driven cryptocurrency landscape that rarely follows patterns, stock-to-flow has remained one of the only consistent metrics for charting future price movements for Bitcoin.

In a nutshell, stock-to-flow helps to measure how scarce a commodity is, and is calculated by taking the existing amount of the commodity (the stock) and dividing it by the additional volume of the commodity produced over the year (the flow).

This model indicates that the higher margins of existing stock compared to the new flow being produced creates a higher stock-to-flow, and helps to underline one of Bitcoin’s core mechanisms.

First created by pseudonymous Twitter user PlanB, S2F has loosely followed Bitcoin’s past price rallies with considerable accuracy, and with halving events cutting the flow of new BTC produced by 50% every four years, its stock-to-flow model always factors in a significant bull market which will conclude in 2025.

But how high does this mean Bitcoin will go next year? Different models have drawn wildly different but consistently sky-high conclusions. PlanB suggests that Bitcoin can peak at $500,000 in 2025, while models from the likes of Glassnode, Newhedge, and Bitbo have all charted rallies in excess of $1,000,000 between spring and summer next year.

More ‘conservative’ estimates from Bitcoin Magazine and Coinglass have BTC peaking at around $410,000 by April as part of their respective S2F models.

Inconsistencies With S2F

One key problem with the accuracy of stock-to-flow models is that Bitcoin’s peak prices at the conclusion of a bull run are typically followed by deep pullbacks that result in ‘crypto winter’, a period of consistent slow or negative growth that can see the asset fall dramatically from its all-time high values.

It’s also important to note that the impact of Bitcoin’s post-halving market rallies has been progressively weaker over time, which is likely down to growing institutional adoption keeping prices better anchored against wild price fluctuations.

With US Spot ETFs managing $58 billion worth of Bitcoin, representing around 4.6% of the coin’s circulating supply as of October 2024, the result will be calmer crypto winters but at the cost of market rallies with a weaker impact than in BTC’s more erratic formative years.

Finally, Bitcoin’s 2021 market rally coincided with masses of government stimulus packages distributed in response to the pandemic, helping to provide far more investor spending power throughout the cryptocurrency landscape, especially when you consider that crypto is slowly becoming a real currency, being integrated into various payment processors, AP automation tools and payment gateways.

With stubborn inflation and higher interest rates hampering retail investors in 2024, could investors be entering Bitcoin’s latest bull run less confident than in 2020 and 2021? Not if Donald Trump decides to make good on his pro-crypto pledges.

The Trump Effect

One of Donald Trump’s most resounding pledges on the election campaign trail was that the President-elect would ensure that the Treasury and Federal Reserve purchase 200,000 BTC each year for five years to accrue one million tokens at 5% of the total global supply of the cryptocurrency.

Whether such an ambitious project makes it off the ground will have major ramifications on