Bitcoin (BTC 1.63%) had a phenomenal year in 2024. The cryptocurrency returned 119%, easily outperforming the 23% gain in the S&P 500 (SNPINDEX: ^GSPC), which itself is commonly seen as a barometer for the overall U.S. stock market. In fact, only five stocks in the S&P 500 created more wealth than Bitcoin last year.
A single Bitcoin is currently worth $104,000, but certain Wall Street analysts think its value will rocket higher in 2025, as detailed below:
- Matthew Sigel, head of digital asset research at VanEck, thinks Bitcoin could hit $180,000 in 2025. That forecast implies 73% upside from its current price.
- Gautam Chhugani, managing director at Bernstein, thinks Bitcoin could hit $200,000 in 2025. That forecast implies 92% upside from its current price.
- Tom Lee, head of research at Fundstrat Global Advisors, thinks Bitcoin could top $250,000 in 2025. That forecast implies 140% upside from its current price.
Importantly, the targets above imply identical gains in the iShares Bitcoin Trust (IBIT 4.43%) by BlackRock, a spot Bitcoin exchange-traded fund (ETF) that tracks the cryptocurrency.
In general, the analysts above cite the same catalysts as reasons Bitcoin will move higher in 2025: Spot Bitcoin ETFs and a more pro-cryptocurrency presidential administration should boost demand. Read on to learn more.
Spot Bitcoin ETFs have seen strong demand from institutional investors
After delaying for years, the U.S. Securities and Exchange Commission (SEC) gave approval for spot Bitcoin ETFs in early 2024. Those funds let investors buy Bitcoin through traditional brokerage accounts without the hassle and high fees typical of cryptocurrency exchanges. Many pundits view that event as a turning point for the industry that will encourage more investors to participate in the market.
The iShares Bitcoin Trust by BlackRock has been particularly successful since its launch in January 2024. During its first year, the fund set several records, including reaching $10 billion and $50 billion in assets faster than any ETF in history. That is clear evidence that spot Bitcoin ETFs are indeed unlocking pent-up demand. And that demand has not been limited to retail investors but has also come from institutional investors.
Bitwise CIO Matt Hougan recently said 70 publicly traded companies now have Bitcoin on their balance sheets, and that number is projected to increase in 2025. He also wrote in August, “Bitcoin ETFs are being adopted by institutions at the fastest rate of any ETF in history.” That matters because institutional investors collectively control about $120 trillion in assets. Even a small fraction of that total allocated to Bitcoin could push its price much higher.
Changes in the regulatory landscape are further legitimizing Bitcoin
Many pundits think Gary Gensler, chairman of the SEC, has been unreasonably harsh on cryptocurrency. That list includes BitGo CEO Mike Belshe, who recently told Yahoo! Finance that Gensler, without good reason, waged a “war on crypto.” The list also includes Matthew Sigel at VanEck, who says the SEC under Gensler regularly sued cryptocurrency companies for breaking rules the agency never bothered to formalize.
Indeed, a federal appeals court last week ordered the SEC to explain its decision to decline Coinbase‘s request to develop clear rules for the cryptocurrency industry. Moreover, Judge Stephanos Bibas warned the SEC not to give “yet another poor explanation in an already-long line of them.”
Donald Trump, while campaigning for president, said he would end the anti-crypto crusade by (1) replacing Gary Gensler and (2) making Bitcoin a strategic reserve asset. On those fronts, Gensler plans to leave the SEC on Jan. 20. And Senator Cynthia Lummis, R-Wyo., last year introduced the Bitcoin Act, legislation that would establish the cryptocurrency as a reserve asset.
Importantly, while the Bitcoin Act is a long way from becoming law, the mere fact that some politicians have become outspoken advocates should further legitimize Bitcoin among institutional investors. If the Bitcoin Act does become law, it would position the U.S. government as a buyer of Bitcoin, and that demand could drive its price much higher.
Indeed, during a recent interview, Tom Lee at Fundstrat said, “If the U.S. government, as they intend, ultimately gets to one million Bitcoin, they will be the largest holder of Bitcoin in the world. And that will exert enormous positive influence on legitimizing Bitcoin.”
Image source: Getty Images.
A word of caution for prospective Bitcoin investors
While numerous experts believe Bitcoin will become more valuable in the coming years, investors should bear in mind two warnings. First, Bitcoin is a relatively young asset, which makes predicting future price action even more difficult than normal. Second, Bitcoin has historically been a very volatile asset, falling at least 50% from a record high three times in the last five years.
Put differently, there is no guarantee that Bitcoin will be worth more in the years ahead, and even if its value does increase, history says the cryptocurrency will suffer severe setbacks along the way. Investors comfortable with those circumstances should consider buying a small position in the iShares Bitcoin Trust.