Bitcoin may experience a significant surge in 2025 due to a large liquidity boost from the Federal Reserve. This injection could total $612 billion, according to predictions made by Arthur Hayes, the founder of BitMex.
He believes that this influx of capital could counterbalance any negative effects stemming from the cryptocurrency policies of the Trump administration.
According to Hayes, the economic environment surrounding Donald Trump’s inauguration on January 20 could lead to an increase in money printing, which would benefit Bitcoin.
He asserts that the anticipated liquidity increase could push Bitcoin (BTC) to reach new all-time highs (ATH) by March 2025. Hayes does caution, however, that there may be a subsequent correction in prices if regulatory measures disappoint investors.
He further explains that even if the Trump administration does not quickly adopt policies that favor crypto, the broader financial environment created by the liquidity surge could cushion the negative outcomes.
Although there is potential for market selloff if regulatory expectations are unmet, Hayes remains hopeful about Bitcoin's long-term price growth.
Many analysts echo Hayes' positive outlook. Some predict that Bitcoin could peak above $150,000 by the end of 2025. This potential growth may be driven by a projected increase of $20 trillion in the global money supply, which could direct an estimated $2 trillion into Bitcoin investments.
Recent trends show that Bitcoin's price fell nearly 6% within 24 hours, now at $94,748. This decline is linked to lower institutional trading during the holiday period. However, there is optimism that institutional investors will reinvest their funds in early 2025. This renewed activity might help Bitcoin reclaim the $100,000 mark before Trump's inauguration.
Despite the looming regulatory concerns, the financial strategies employed by the Federal Reserve could act as a vital support system for Bitcoin in the first quarter of 2025. This sets the stage for what could be a lucrative year for the leading cryptocurrency.