In the long run, the cryptocurrency industry has steadily accumulated value, but it has been a wild ride. At the price of Bitcoin (Cryptography: BTC) Already a 22% drop from an all-time high of $109,358 (which reached Trump’s inauguration day on January 20th), buying these assets at the wrong time could expose your portfolio to incredible volatility.
Let’s explore what the rest of the year has.
Bitcoin’s latest rally is clearly linked to the Trump administration. Despite a sharp drop from an all-time high, digital currency prices have more than doubled since winning the election of President Trump on November 5th. This price transfer reflects market optimism that it will take a more positive attitude towards the industry, as opposed to the stricter regulatory approach the new administration favored the previous year.
Bitcoin price data by YCHARTS.
So far, optimism appears to be justified. Under proxy superintendent Mark Ueda, Securities and Trade Commission It creates a cryptographic task force that prioritizes regulatory clarity over enforcement and allows investors and developers to better understand the rules of the game.
Regulators have also removed a series of lawsuits against crypto exchanges such as CoinbaseConsensys, and Kraken are primarily related to whether cryptocurrencies should be classified as securities.
Clarity of regulations is key to the acceptance of Bitcoin by mainstream financial institutions such as mutual funds, pension funds and even insurance companies. These organizations are usually considered smart money that can increase the legitimacy of their assets. They also tend to invest huge amounts of money over the long term. This will reduce volatility and make Bitcoin prices more stable.
Bitcoin is enjoying the long-term tailwind with the new administration, but 2025 could face challenges.
JP Morgan (part of JP Morgan Chase) Economists predict 40% Opportunities for a recession Part of Trump’s tariff policies that could spark a trade war between the United States and its biggest trading partners. I like many consumer goods retailers General Dollar and Walmart It also flagged the worsening consumer sentiment. This is a bad sign for the economy. That said, it is unclear how the recession will affect Bitcoin.
Unlike corporate stocks, Bitcoin is not valued based on revenue or revenue growth, so the recession is not actually affected. Intrinsic value. In that sense, it’s like currency. However, recessions generally tend to lower asset prices, which suck wealth from the economy.
The story continues