As soon as new global tariffs are announced on April 2nd, Bitcoin (Cryptography: BTC) I began to bow my head. It is currently trading for less than $80,000. That price level would have been unthinkable just two months ago. On January 20th, Bitcoin was traded at a record high of $109,000.
The good news is: An astounding number of investors are still relatively confident about the 2025 Bitcoin outlook. Based on data from the Kalshi Online Forecast Market, 35% of investors are likely to reach $125,000 this year, with 16% still thinking they are on the path to $150,000. What does Bitcoin need to achieve these lofty price targets?
To make this problem as easy as possible, I mentally split the Bitcoin catalyst into two categories: “old” and “new.” “Old” catalysts are catalysts that existed from election day to inauguration day. “New” catalysts are catalysts that can emerge in the wake of new tariff regimes.
35% of investors who think Bitcoin could still reach $125,000 this year may rely on old catalysts to make it happen. These old catalysts are fully summarized by investment company Bernstein, predicting in January that Bitcoin would reach $200,000 by the end of 2025.
This scenario assumes that we are at the so-called “infinite age” of code. This means more mainstream acceptance of Bitcoin and greater integration into the global financial system. We need to accelerate the inflow into spot Bitcoin ETFs. It suggests that more companies can follow micro-tactics (now known as strategy) (NASDAQ:MSTR) A model that adds Bitcoin to the balance sheet. It has also been suggested that AI and Crypto may come together in great new ways, leading to advances in Bitcoin mining.
Certainly, everything seemed to be heading in the right direction. There was a crypto summit at the White House in March, and the Trump administration announced the creation of a strategic Bitcoin Reserve. At the same time, all the old regulations that could have reclaimed Bitcoin appeared to be out of line.
However, the volatility in the market that arose from the new tariff regime appears to put all these old catalysts at risk. If the Trump White House is negotiating tariffs with 50 different countries at the same time and is trying to keep the global financial system from falling into flames, do you really think it’s focusing on a new Bitcoin initiative?
This year, there may be a need for a new set of catalysts to help Bitcoin surge higher and higher. Simply put, the market is already priced with all the old catalysts.
The story continues
One scenario where you can send Bitcoin a higher price is when investors accept Bitcoin as a “safe shelter” asset during these unstable times. When asset prices are crashing around the world and tariffs are valued more highly, investors may decide to “extremely” their portfolio by loading Bitcoin as the form of “digital gold.” In that case, there could be a record inflow of Bitcoin ETFS, which would boost the price of Bitcoin.
Of course, we are always skeptical of Bitcoin as a long-term storage of value. At least physical gold is specific. In the worst case scenario, you can exchange your gold bar for a valuable item. But what about a completely virtual asset that exists only in the form of 1S and 0?
Image source: Getty Images.
Other potential catalysts include China. This is a clear long shot, and involves China lifting the Bitcoin ban. Since 2021, China has banned trading with crypto mining. But what if China reverses its ban? What happens if over a billion people are suddenly allowed to buy and hold Bitcoin?
Currently, the online forecast market will have this happening 2% by June 30th. It’s small and not insignificant. If the trade war between the US and China continues to escalate, China may abandon its dollar-controlled assets and go with Bitcoin instead. Remember: Spot Bitcoin ETFs are already traded in Hong Kong.
If Bitcoin can find the right catalyst, it could still turn things around and rise above $100,000. With nearly a third of investors currently forecasting, they could probably even trade $125,000.
However, if you rely on pro-crypto happiness to send Bitcoin higher this year, you may no longer be relying on an outdated mental model that does not accurately reflect current economic realities. It’s time to update that model with customs.
Consider this before purchasing inventory with Bitcoin.
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Dominic Basulto has a position in Bitcoin. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
If the online forecasting market is the guide, then Bitcoin had a 35% chance of hitting $125,000 in 2025.
