The year 2025 could be historic for Bitcoin. The fourth Bitcoin halving, which took place last year, has reduced the daily amount of newly created Bitcoins to 450. Historical patterns show that the biggest price increases often occur about a year after the halving, when the effects of the shortage on supply and demand come into full effect. Combined with a host of other factors – from monetary policy developments and institutional investment to geopolitical changes – the signs are pointing to a massive Bitcoin bull run this year. But what makes 2025 so special?
The 2024 Halving and Long-term Scarcity
In April 2024, the fourth Bitcoin halving took place. Since then, the daily amount of newly generated Bitcoins has been halved from 900 to 450. This corresponds to an annual reduction of 164,250 Bitcoins that are newly added to the market. This scarcity is a central component of the Bitcoin protocol to increase its value in the long term. The three halvings to date have each led to massive price increases, which usually peaked a year after the event.
The underlying logic is simple: while the supply is limited, demand remains the same or even increases due to the continuous interest of investors and users. However, this effect only unfolds over months, making 2025 the likely turning point for the next major price increase. Analysts speculate that the Bitcoin price, currently around $42,000, has the potential to reach $100,000 or more by the end of 2025.
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Expansive Monetary Policy and Interest Rate Cuts – Fuel for the Market
Another significant factor for 2025 is the monetary policy situation, particularly in the US. The Federal Reserve has signaled that interest rate cuts are possible this year as the rate of inflation returns towards the 2% target. Lower interest rates mean a higher money supply, as cheap credit increases the availability of capital. Historically, this has led to an increase in the prices of assets such as equities, real estate and, of course, Bitcoin.
It is particularly noteworthy that Bitcoin benefits disproportionately from this mechanism because, unlike fiat currencies, it has a limited supply. While the money supply grows, Bitcoin remains constant at a maximum of 21 million units. This contradiction between expansive monetary policy and Bitcoin as a scarce commodity is one of the reasons why Bitcoin is often seen as “digital gold” in inflationary or uncertain monetary policy times.
Institutional Adoption – The Quiet Revolution
One of the most exciting aspects of the bitcoin market in 2025 is its growing acceptance among institutional investors. The introduction of Bitcoin spot ETFs in 2024 was a key milestone. These products, which allow investors to invest directly in Bitcoin without having to hold it themselves, were bought in record amounts in the first few months after their introduction. Data shows that these ETFs have significantly outperformed even gold ETFs in their early days.
Even more impressive is who is behind these investments: hedge funds, universities, state pension funds and family offices have begun adding Bitcoin to their portfolios. According to reports from the US, BlackRock is now suggesting that conservative investors reallocate 1-2% of their portfolios to Bitcoin. If this trend catches on, even a minimal capital allocation from institutional investors could mean a tenfold increase in the price of Bitcoin. With a global wealth market of several hundred trillion US dollars, even small shifts in favor of Bitcoin would be enormous.
Geopolitics and Bitcoin’s Role as a Global Reserve
Geopolitical changes and a growing desire for independence from traditional currencies such as the US dollar also create a favorable environment for Bitcoin. Countries such as Russia and China have publicly considered alternatives to the dollar, while Bitcoin, as a neutral, uncensorable asset, represents a viable solution.
In the US, political support for Bitcoin has also increased. High-level politicians have signaled that Bitcoin could play an important role in national strategy, whether as a reserve asset or as a symbol of technological leadership. These developments could further push Bitcoin into the mainstream and increase its adoption worldwide.
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Risks and Challenges – Centralized Custody
Despite the positive outlook, there are also risks that could affect the market. A large proportion of institutionally held Bitcoins are stored with a few custodians such as Coinbase. Should security issues arise here, investors could lose confidence, which could lead to short-term price drops. However, the US is working on a legal framework to enable custody diversification. These measures could further strengthen confidence in the market.
2025 – A Turning Point for Bitcoin
The year 2025 brings together a unique combination of factors: the long-term effects of halving, expansionary monetary policy, growing institutional acceptance and geopolitical dynamics. Together, they lay the foundation for a potential bull run that could push Bitcoin to new record highs. While there are risks, the opportunities clearly outweigh them. Bitcoin could finally take its place as a globally recognized and indispensable asset this year.
Relevant article: The most important crypto trends of 2025 – My personal predictions
Author
Ed Prinz is the chairman of https://dltaustria.com, the most renowned non-profit organization in Austria specializing in blockchain technology. DLT Austria is actively involved in educating and promoting the added value and possible applications of distributed ledger technology. This is done through educational events, meetups, workshops and open discussion groups, all in collaboration with leading industry players on a voluntary basis.
https://blockzeit.com/is-2025-the-year-of-the-bitcoin-bull-run