Bitcoin is in a crucial phase of its market cycle, and based on various analysis models, such as Stock-to-Flow (S2F), as well as global adoption fundamentals and changes in U.S. financial regulation, we can foresee that the price of BTC will exceed $280,000 before the end of 2025.
The Stock-to-Flow model and the 2024 halving
The Stock-to-Flow (S2F) model, developed by PlanB, measures the scarcity of an asset by dividing its total supply by the amount issued annually. Historically, this model has been one of the most accurate tools for predicting Bitcoin cycles.
Each halving, which occurs approximately every four years, halves the issuance of new bitcoins. In April 2024, the block reward dropped from 6.25 BTC to 3.125 BTC, reducing the selling pressure from miners and increasing the asset's scarcity.
If we take previous halvings as a reference:
• 2012: BTC went from $12 to $1,100 in one year.
• 2016: BTC went from $650 to $20,000 in 18 months.
• 2020: BTC went from $9,000 to $69,000 in 18 months.
The current cycle, post-halving of 2024, places us in the parabolic expansion phase, with an S2F model projection placing Bitcoin in a range between $250,000 and $300,000 before the end of 2025.
Institutional adoption and the entry of States into Bitcoin
A key factor in this prediction is the increasing adoption of Bitcoin by States and governments. Some recent examples include:
• El Salvador continues to accumulate Bitcoin in its treasury and has made BTC a pillar of its economy.
• Argentina, under the presidency of Javier Milei, has adopted a much more open stance towards Bitcoin, facilitating its use in the country.
• Hong Kong and other jurisdictions are establishing legal frameworks for the custody and trading of Bitcoin by banks and large investors.
• The Middle East and Asia are making progress in integrating Bitcoin into sovereign funds and payment systems.
The progress in sovereign adoption of Bitcoin reinforces its narrative as digital gold, creating greater demand from institutions and governments seeking to protect their purchasing power.
The impact of regulatory change in the U.S.
Another key aspect is the change in banking regulation in the U.S. that is allowing for greater integration of Bitcoin into traditional financial products. Some recent events that support this trend are:
1. The approval of spot Bitcoin ETFs in January 2024 allowed institutional investors to access Bitcoin without needing to directly custody it. This has generated a massive influx of capital into the asset.
2. Traditional banks are beginning to offer custody and loan products in Bitcoin, integrating it into their financial offerings.
3. The SEC and CFTC are clarifying the legal status of Bitcoin, separating it from other cryptocurrencies that could be classified as securities.
4. The increase in demand for Bitcoin as collateral for institutional loans and in pension fund investment strategies.
This new regulatory framework not only reduces uncertainty for large investors but also facilitates the integration of Bitcoin into the global financial system, drastically increasing demand.
Price projection and conclusions
Adding these factors – the scarcity induced by the halving, the increasing adoption by States, and favorable regulation in the U.S. – we can expect Bitcoin to reach a new all-time high above $280,000 before the end of 2025.
The most likely scenario is the following:
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• By the end of 2025: Bitcoin exceeds $280,000, driven by a combination of scarcity, adoption, and new financial products.
While markets are volatile and no model is infallible, the data suggests that this could be the largest cycle in Bitcoin's history. The question is not whether it will exceed $280,000, but when.