Bitcoin’s price experienced a dip below $93,000 on Jan. 10, following a strong U.S. jobs report that bolstered the U.S. dollar. Grayscale’s research director Zach Pandl explained that Bitcoin’s recent price movements are mainly influenced by the strengthening dollar, which has been supported by the Federal Reserve’s hawkish stance and ongoing tariff concerns. The jobs report increased expectations that interest rate cuts by the Fed would be delayed, thus supporting the dollar and adding temporary downward pressure on Bitcoin’s price. The U.S. Dollar Index (DXY) rose by 0.5% in morning trading, while market data from CME FedWatch shows a less than 3% chance of a rate cut in January.
Despite the macroeconomic challenges, Grayscale maintains a "structurally bullish" outlook for Bitcoin. Pandl believes that while the current setback might temporarily hold Bitcoin back, the upcoming U.S. presidential inauguration could catalyze positive movement in the market. He emphasized that with Donald Trump’s inauguration on Jan. 20, the crypto industry could soon benefit from more favorable regulatory policies. Trump’s victory in the 2024 presidential election is expected to usher in a regulatory environment more supportive of the cryptocurrency sector. Trump has promised to appoint crypto-friendly regulators and turn the U.S. into the "world’s crypto capital."
Market analysts share similar optimism for 2025. Steno Research forecasts that Bitcoin will reach new all-time highs, citing an "unprecedentedly favorable regulatory environment" that will fuel institutional adoption. Grayscale has also updated its list of top tokens to watch in 2025, taking into account potential regulatory changes. One of the top-performing crypto assets in recent months, XRP has been highlighted as a token to watch in the coming year.
U.S. Bitcoin ETFs saw a major milestone in November 2024, surpassing $100 billion in net assets for the first time. Analysts predict Bitcoin ETFs will attract an additional $48 billion in 2025, which could create a demand shock that drives Bitcoin’s price higher. This would add to the positive momentum for Bitcoin, fueled by surging institutional inflows. Sygnum Bank, a Swiss digital asset manager, also believes that the growing institutional demand will continue to push Bitcoin’s value higher throughout the year.
While Bitcoin faces some temporary macroeconomic headwinds, the long-term outlook remains positive. Analysts point to the combination of favorable regulatory changes, increased institutional adoption, and potential demand shocks as key factors that could drive Bitcoin’s price to new heights in 2025.
