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Bitcoin rose to an all-time high of $77,000 following the Fed’s latest rate cut on Thursday, while analysts predict that BTC could reach $90,000 to $125,000 by the end of 2024.
“We are entering the Golden Age of Crypto,” Bitwise Chief Investment Officer Matt Hougan said on Wednesday, predicting a continued bull market for Bitcoin. Here are what experts have identified as the key drivers behind this rally.
Pro-Crypto Management
Donald Trump’s recent election victory has sparked optimism among investors with his pro-crypto stance. Bitcoin’s price has surged above $77,000 as Trump’s administration becomes more positive towards digital assets and traders anticipate a friendlier regulatory environment.
UK-based Standard Chartered predicts Trump’s policies could send Bitcoin to $125,000 by the end of the year. Galaxy Digital CEO Mike Novogratz is optimistic about a swift lifting of banking restrictions and stablecoins for crypto firms, potentially unlocking significant institutional interest. Trump’s firing of Securities and Exchange Commission Chairman Gary Gensler, known for his regulatory crackdown on the crypto industry, could further boost institutional adoption.
Increasing Corporate Demand
Bitcoin’s appeal to institutions has been evident this week, with U.S. spot ETFs seeing record inflows of $1.4 billion on Wednesday. That influx creates a feedback loop that draws even more capital into BTC, says BTC Markets CEO Caroline Bowler. The influx of large institutions could bring “trillions of dollars” of capital with minimal or no exposure to crypto, according to Hougan, and fuel demand-driven price increases.
FED and China's Liquidity Support
Bitcoin’s rise also reflects the Fed’s quantitative easing and China’s economic stimulus measures, which have lowered borrowing costs following the Fed’s quarter-point rate cut this week and a 50 basis point cut in September, increasing liquidity in the financial system.
Simultaneously, China is preparing a significant fiscal package, potentially reaching $1.4 trillion, to stimulate growth. BitMEX co-founder Arthur Hayes called these combined actions a “bazooka” of liquidity that he believes will fuel a sustainable Bitcoin bull market by 2025.
Ideal Conditions for Risk Assets
Bitcoin and other riskier assets have become increasingly attractive to investors thanks to abundant liquidity and low borrowing costs. Analysts argue that current market conditions present a “Goldilocks scenario” for crypto, as these new financial flows encourage a shift toward higher-risk, higher-return assets like Bitcoin.
*This is not investment advice.