What goes up must come down, and this is true for Bitcoin as well.
Consider the price fluctuations of cryptocurrencies this year alone. In January, Bitcoin is around $42,000. Come March, its price zoomed to $73,000, only to reach $60,000 later.
As of mid-day on December 14, the price of Bitcoin was $101,739.82
This begs the question: How long will the current rally last?
According to many industry experts your story the price of Bitcoin is expected to rise in the coming year, but some corrections are also expected during this climb.
While there will be an improvement from an economic perspective, it may not be very sharp, said Vugar Usi Zade, chief operating officer at Bitget, a Seychelles-based crypto exchange.
“I don’t think we’ll see a 60,000 or 50,000 correction at this point because everyone is so excited. The main determining factor will be (Donald) Trump and how the US government tries to maneuver around Bitcoin,” Zade says.
Bitget is currently awaiting approval from the Financial Intelligence Unit-India (FIU-IND) to enter the Indian market.
“I’m sure there will always be a little improvement here and there. Hopefully, even with the improvement net, next year, we’re still high,” comments Balaji Srihari, vice president of crypto trading platform, CoinSwitch.
In the Making of History
The price of the cryptocurrency, known as digital gold due to its store of value, has continued to rise following Trump’s re-election, due to greater institutional interest in the digital asset class. The former president has taken a pro-crypto stance, indicating hopes for a more favorable regulatory approach to the crypto market.
If Trump changes his stance on wealth, the ecosystem could see a major shift. The former president was initially opposed to embracing the wealth class. In fact, he also founded his own decentralized finance project, World Liberty Financial, in September this year.
If the factors driving the price of bitcoin change, there will definitely be an adverse impact, says Avinash Shekhar, co-founder of Pi42, a crypto-INR perpetual futures trading exchange.
“We’re in the realm of ‘what ifs,’ and I think we don’t have to wait much longer. We’re another four or five weeks away from him (Trump) actually taking office and announcing his first 100-day plan. That in itself will be a sign.” ,” he says.
Trump’s promises to the crypto community include preventing the federal government from selling bitcoin holdings and maintaining its current levels, removing SEC Chairman Gary Gensler, who led the crackdown on cryptocurrencies, and taking steps to promote bitcoin mining in the US. and lowering interest rates.
On November 22, a week after Trump’s re-election, Gensler announced that he would resign from his post on January 20. On December 4, Trump nominated Paul Atkins for the post; Atkins is known for his pro-crypto stance.
Global push
Cryptocurrency is a volatile asset class and has seen bull runs in the past — once in 2017 and another between 2020 and 2021. While the rallies in 2017 and 2020 can be attributed to investors being introduced to crypto and the massive token frenzy, the recent surge is due to a “mature logic,” as described by industry experts.
The 2020-2021 rally attracted institutional interest in the asset class; And three years later, in January 2024, the US Securities and Exchange Commission (SEC) approved the first Bitcoin Exchange Traded Funds (ETFs). These are investment funds traded on stock exchanges that hold Bitcoin directly as their underlying asset, allowing investors to gain exposure to the asset class without having to purchase, store or manage it themselves.
According to Vikram Subburaj, co-founder and CEO of cryptocurrency exchange Geotus, the ETF approval diverted attention from regulatory issues for crypto exchanges such as Coinbase, Kraken and others.
But, as time passed, and the market began to refocus on landscape issues, the prices of the digital asset class began to stabilize. However, sentiment changed after Trump was re-elected.
“This is the first time that the ecosystem has had someone like the president of an important nation supporting the bitcoin or crypto ecosystem,” says Subburaj.
While the US election has given the global crypto community a green signal, China, which has banned cryptocurrencies in 2021, presents a whole new story.
Amid a swirl of media reports and market rumors about the country’s possible lifting of sanctions, the country is expected to roll out 2 trillion yuan ($284.43 billion) as part of a new fiscal stimulus package.
“China basically announced a $2 trillion stimulus package to prop up its economy, which effectively means it’s going to print $2 trillion in money. And that will feed into the wider economy,” explains Edul Patel, CEO and co-founder of crypto-exchange Mudrex.
According to Patel, this money could boost crypto investment in Southeast Asia. “When stimulus comes in, that means more money is coming in to people. Normally, once more money is coming in to people, people start putting more risky products,” he notes.
One of the main drivers of the increased interest in cryptocurrency is the fact that unlike in the US, equity markets in Southeast Asia are not very large and developed.
ZebPay Chief Operating Officer Raj Karkara sees 2024 as a remarkable year overall for crypto and he expects 2025 to be even better on this front.
“While estimating prices is speculative, we are optimistic about the potential for further growth due to the increasing adoption and growing global awareness of Bitcoin,” he says.
Investors should be careful
Amid investors rushing to the exchange to grab a piece of Bitcoin, experts caution that any investment should be made after much thought and research.
“Don’t try to time the market. Stay in the market, be a patient long-term investor and let capital work for you for a little while. Don’t do anything you don’t fully understand. If you are a trader and you have leverage, take leverage. But if you are not a trader, take advantage of trading because someone else is doing it. Don’t get FOMO from other people’s returns,” says Mridul Gupta, founding partner of CoinDCX.
Srihari of CoinSwitch says users should be careful about the platform they choose to facilitate trading and be wary of get-rich-quick schemes advertised on social media platforms.
Investors should also look for FIU-IND registered entities to facilitate trading in Bitcoin, experts advise.