A crypto-friendly US president supports the bullish crypto story, but a correction could still be coming.
Trump’s re-election has sparked a rally in bitcoin and advocates are upbeat about 2025. We look at the likely price drivers for the main cryptocurrency coin next year, the role that asset managers will play in bringing it into the mainstream and likely changes in the regulatory landscape.
Bitcoin’s Rapid Revival
The “crypto winter” of 2021 and 2022 now seems a distant memory. That was a major crisis for cryptocurrencies, and one in which the bitcoin price slumped below $20,000, losing 75% over 12 months.
Such a turnaround is impressive, but the history of bitcoin is one of extreme highs and lows, says John Plassard, senior investment specialist at Mirabaud Group: “Bitcoin’s unprecedented rise reflects a blend of increased legitimacy and growing demand, but history suggests caution as bitcoin’s price trajectory has been marked by sharp corrections following periods of exponential growth.”
Cryptocurrencies are known for their high volatility. Prices can fluctuate significantly in short periods, induced by factors such as market sentiment and risk appetite, regulatory news, technological developments, and macroeconomic trends.
Indeed, Adrian Fritz, head of research at 21Shares, says that corrections are part of bitcoin’s history and vital for the price dynamic.
“These downward adjustments, typically ranging from 20% to 40%, serve as a vital mechanism for reestablishing market equilibrium and are an integral part of bitcoin’s historical price patterns”.
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