"Bold forecast shouldn't be dismissed"
In a lively forecast, experts predict the Bitcoin market is on the rise, potentially surpassing the $125,000 mark by May 2025. Recent developments have sparked optimism, with positive sentiment permeating the crypto space.
Since early April, Bitcoin has been on a five-week upward trend, recovering from an annual low of below $75,000. As of May 12, the digital currency was hovering around $104,000, just a few percent from its historical high. This bullish streak has bolstered the overall crypto market capitalization, which has swelled by approximately 40% to approximately $3.4 trillion.
Victor Pershikov, managing partner at SWR Capital, attributes this recovery to a combination of factors, including increased demand for cryptocurrency from large investors, stable inflows into crypto-ETFs, and improved trade war news and political sentiment.
Pershikov, however, cautions that the Federal Reserve's readiness to lower interest rates would be crucial for further growth. Delays in lowering interest rates can hinder additional price growth, according to him, as it creates a lack of new liquidity inflows into financial markets.
Meanwhile, Alexander Persichan, head of Tehnobit, highlights the improving geopolitical climate as another significant factor accounting for Bitcoin's growth. Persichan notes that Trump's recent agreement with China to reduce tariffs gave the financial market a much-needed respite from potential shocks, thereby boosting Bitcoin's value.
Despite the overall optimism, analysts warn of potential risks associated with certain events. For instance, Roman Nekrasov of ENCRY Foundation notes that Bitcoin shows growth ahead of significant events, driven predominantly by speculative investor sentiment.
In light of the Federal Reserve's credit rate meeting in June, Nekrasov predicts that Bitcoin may attempt to consolidate above $110,000 at the beginning of the month before experiencing a period of increased volatility. During this period, Bitcoin may lose some of its gains, potentially dipping to $100,000 by mid-June and even dropping to $95,000. However, if the US takes steps towards improving trade relations with China and tariffs continue to decrease, Bitcoin's price may receive additional support and impetus for continued growth, remaining in the six-figure zone.
Overall, while expert predictions indicate a robust bullish outlook for Bitcoin by May 2025, the market remains sensitive to macroeconomic factors, particularly U.S. monetary policy decisions. Tightening monetary policy, inflationary pressures, and regulatory measures can all impact investment flows and prices, introducing potential volatility into the crypto market. In this dynamic environment, it's crucial to stay informed about market developments to make confident investment decisions. Join the "RBC-Crypto" Telegram channel or the RBC-Crypto forum in Telegram to stay abreast of the latest crypto news and trends.
Technology plays a significant role in fueling the current surge in Bitcoin's value, as improved trade war news and political sentiment provide a conducive environment for investing in cryptocurrencies. Meanwhile, Victor Pershikov suggests that the Fed's readiness to lower interest rates will be crucial for maintaining and potentially increasing Bitcoin's growth, as it creates new liquidity inflows into financial markets.
