Bitcoin Halving Effect
Bitcoin will complete its halving in mid-2024. Historical data shows that the 12-18 months following a halving often lead to a major bull market. 2025 falls within this cycle, where reduced supply coupled with increased demand (such as ETF inflows and institutional allocations) drives up prices.
Institutional Capital Enters in Large Scale
Bitcoin ETF Continues to Accumulate: After the U.S. SEC approved the Bitcoin spot ETF, institutional capital has accelerated its inflow, with giants like BlackRock and Fidelity continuously increasing their positions.
Corporate Reserves of BTC: Several listed companies (such as MicroStrategy) are incorporating Bitcoin into their balance sheets, long-term locked positions reduce circulating supply.
ETH Staking ETF Approved: The approval of the Ethereum staking ETF allows institutions to invest in yield-generating crypto assets in compliance, further facilitating capital inflow.
Favorable Macroeconomic Environment
Federal Reserve Rate Cut Expectations: The market widely anticipates that the Federal Reserve will enter a rate-cutting cycle in 2025, with liquidity easing encouraging funds to flow into high-risk assets, including cryptocurrencies.
Weak Dollar: The weakening of the dollar prompts funds to flow into inflation-resistant assets like Bitcoin and Ethereum.
Regulatory Policies Turn Friendly
U.S. 'GENIUS Act': The stablecoin regulatory framework has been established, enhancing market confidence.
SEC Eases Crypto ETF Rules: The SEC allows Bitcoin and Ethereum ETFs to adopt a “physical creation and redemption” mechanism, reducing operational costs and attracting more capital.
Market Sentiment and Capital Rotation
“Selective Bull Market”: Unlike the broad rally of 2021, in 2025, funds are more concentrated in Bitcoin, Ethereum, Solana, and other assets with institutional backing and real returns.
Retail Investors Have Yet to Enter on a Large Scale: The market is still dominated by institutions, consistent with the characteristics of the “early bull” phase, and retail FOMO sentiment has not fully erupted yet.
Price Predictions Support Bull Market Expectations
Bitcoin Target Price: $150,000-$500,000 (predictions from analysts like Tom Lee, Tuur Demeester)
Ethereum Target Price: $10,000-$30,000 (predictions from Joseph Lubin, Fundstrat)
Summary
The core logic of the 2025 bull market is: halving cycle + institutional capital + policy relaxation + macroeconomic support. However, one must be cautious of market volatility; a bull market does not mean only upward movement, and proper position management and risk control remain key.
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