Recently, the price of Bitcoin has started to rise again, recovering from sharp drops in August and September of this year. Experts are talking about an upward trend and the possible strengthening of the main digital currency in its current position. However, even the most optimistic comments contain notes of caution. In less than a year, many events have taken place in the cryptocurrency world. To help make sense of the current situation and understand what market trajectory awaits us in 2025, we, with the help of financial analyst and commentator Grigory Burenkov, will review the most significant ones.

Halving: A Growth Catalyst?

The fourth Bitcoin halving has become one of the most anticipated events of the year. The programmed reduction in block rewards has historically preceded major bullish surges in the cryptocurrency market. In 2016 and 2020, significant price increases were observed in the months following the halving.

On the day of the halving, April 19, 2024, Bitcoin was valued at approximately $64,262. After the block reward reduction from 6.25 BTC to 3.125 BTC, the price showed a slight positive trend. However, this time the halving did not lead to a significant increase in the value of the digital currency. On the other hand, many analysts consider it a key factor in Bitcoin’s price rise from around $40,000 at the start of the year to over $70,000 by mid-year.

While halvings have traditionally been catalysts for price increases, their impact diminishes with each cycle. This time, we saw a more mature market response, — notes financial analyst Grigory Burenkov. — Nonetheless, this event served as a powerful driver for attracting interest in Bitcoin from both retail and institutional investors.

Approval of Bitcoin ETFs: A New Era of Investments

The approval and launch of spot Bitcoin ETFs in the U.S. have been anticipated for the past few years, and for good reason. The emergence of ETFs, led by financial giants BlackRock and Fidelity, has opened the door to cryptocurrency for a much broader range of investors.

In the first few months of operation, Bitcoin ETFs saw a record inflow of funds. The total assets under management exceeded $60 billion. ETFs have improved Bitcoin’s liquidity and refined the mechanisms for determining its price in traditional financial markets.

Additionally, throughout the year, BlackRock CEO Larry Fink has actively supported Bitcoin, calling it a new asset class and an alternative to other commodities like gold. Support from one of the most influential figures on Wall Street has solidified the status of this digital asset among investors and helped its value reach historical highs. «The approval of Bitcoin ETFs marked a turning point for the industry, as the gates opened for institutional capital,» — notes Grigory Burenkov.

The Role of the U.S. Federal Reserve: Impact Through Interest Rate Cuts

Recent reductions in the U.S. Federal Reserve’s key interest rate have also been noted by experts. These moves are clear signals that the regulator is shifting to a more accommodative stance, which has significant implications for risky assets like cryptocurrencies.

As evidence of this, Bitcoin and other digital assets gained new momentum immediately following the Fed’s rate cut in September. This highlights the growing connection between traditional financial markets and the cryptocurrency ecosystem.

Experts point out that lowering interest rates generally makes speculative investments more attractive. Additionally, monetary easing can lead to a weakening of the dollar, which often correlates with rising cryptocurrency prices. «Indeed, the Fed has created favorable conditions for cryptocurrencies. However, investors should remain cautious about potential inflationary pressures,» —  warns Grigory Burenkov.

Technological Innovations: Layer Two Solutions and Artificial Intelligence

 “I believe that some of the true innovations in 2024 lie in the revolutionary developments around scaling solutions and the integration of artificial intelligence into the cryptocurrency ecosystem,” —  says Grigory Burenkov.

For example, Ethereum has made strides in improving scalability through layer two networks. Solutions like Optimism and Arbitrum have seen user growth, offering faster and cheaper transactions while maintaining security.

These developments have helped reduce congestion on the Ethereum network and revived interest in decentralized finance (DeFi) applications. As a result, Ethereum’s price performance has at times outpaced Bitcoin’s. In turn, the explosive growth of AI technologies has also made its mark in the cryptocurrency space.

 The potential to combine the power of decentralized blockchain networks with AI’s predictive and analytical capabilities is now being closely examined and implemented. For example, AI-based trading bots or smart contracts. Further advancements in these areas will open new horizons for innovation in the crypto industry.

U.S. Elections: The Crypto Industry Cannot Be Ignored

The 2024 U.S. presidential election has brought the issue of digital currencies to the forefront of politics. Both candidates, Donald Trump and Kamala Harris, have addressed the topic, though with different approaches. Trump, known for his past skepticism, is now advocating for cryptocurrencies. At the Bitcoin conference in Nashville, he stated that he would fire SEC Chairman Gary Gensler and make the U.S. the «crypto capital of the world.» Trump emphasizes his commitment to cryptocurrencies, which may be part of a strategy to attract younger voters and support financial innovations.

Vice President Harris takes a more cautious stance. She supports innovation, including cryptocurrencies and artificial intelligence, but emphasizes consumer and investor protection. Her campaign stresses the importance of a balanced approach that allows cryptocurrencies to develop without jeopardizing financial stability.

Grigory Burenkov notes that both candidates recognize the importance of cryptocurrencies. «Digital assets have become too significant to ignore,» —  he emphasizes. However, he also reminds that campaign promises are often far from reality. While the election may trigger short-term market volatility, the long-term role of cryptocurrencies is unlikely to change drastically due to the presidential race.

Grigory Burenkov: The Foundations for Cryptocurrency Market Growth Exist

Bitcoin’s all-time highs, the launch of the first ETFs, and growing recognition even from conservative institutions have become significant milestones in the development of the cryptocurrency sphere in 2024.

Analysts and investors have differing opinions on the near-term prospects for digital assets. For example, optimists predict Bitcoin’s price at the turn of 2024-2025 to be around $100,000. In their view, the total cryptocurrency market volume will exceed $3 trillion. They also expect a continued significant inflow of funds into spot Bitcoin ETFs, making the approval of an Ethereum ETF in 2025 a reality.

More skeptical experts suggest that Bitcoin in 2025 will be in the range of $40,000 to $50,000, and a potential recession will lead to an outflow of funds from crypto assets.

“The foundations for sustainable growth in the cryptocurrency market are already in place, but much depends on the development of the regulatory framework and macroeconomic factors next year, —  shares columnist Grigory Burenkov. —Digital assets will continue to be a driving force in shaping the future of finance. But investors must remain vigilant, as the only constant in this dynamic market is change itself.”

Grigory Burenkov is a columnist, founder and CEO of Wheelerson Management, owner and board member of Osome Group, and a Cypriot financial analyst.