- Robust institutional capital inflows—addresses tied to custodians and spot ETFs added $127B in BTC holdings in 2024, reflecting mounting confidence among institutional players.
- A supportive regulatory environment, with the new U.S. administration appointing crypto-friendly regulators and considering executive actions to promote industry adoption.
- Potential Fed rate cuts that could shift capital flows toward risk assets like Bitcoin, creating a fertile environment for price appreciation.
- The historical “four-year cycle” effect—2025 is expected to be the final and most bullish phase, traditionally associated with major rallies in Bitcoin price.
Based on a historical analysis of capital inflows during previous cycles, CryptoQuant estimates as much as $520 billion in fresh capital could enter Bitcoin markets this year if the cyclical pattern holds.
From a valuation standpoint, Bitcoin enters 2025 with its MVRV ratio at 2.3—well below the “overheated” zone (3.8–4.0). This suggests the market is not overextended, leaving room for further upside.
However, CryptoQuant notes potential risks: delayed Fed rate cuts due to persistent inflation, weak retail participation, and possible “sell-the-news” volatility after Trump’s January 20 inauguration, as short-term traders might take profits on policy headlines.
Still, the strong foundation of institutional conviction and favorable policy tailwinds provide a compelling backdrop for Bitcoin to pursue new highs, with the $250,000 level emerging as a realistic target if current trends persist.