Bitcoin closed 2024 at a high, reaching a record $107,000 in mid-December before dropping to around $96,000 at the start of 2025. Despite this decline, the significant increase of BTC over the past year has left many investors wondering what will happen next.

BlackRock's iShares Bitcoin Trust (IBIT) ETF has seen the largest outflow since its launch on Thursday, with $333 million. Some believe the outflow is due to tax-related adjustments or profit-taking, while others see it as part of a broader pause in market momentum.

"Cryptocurrency tends to move in momentum cycles, with periods of rapid growth followed by quieter phases," Andy Baehr, Managing Director of Indices at CoinDesk, shared with Morning Brief. Noting Bitcoin's performance in 2024, Baehr highlighted two key phases: an ETF-driven rally in the first quarter and another surge from September to December, driven by Federal Reserve meetings and the U.S. presidential election.

Baehr stated that it is important for cryptocurrency investors to think long-term, "We should be patient during calm periods and excited during pivotal moments."

As Bitcoin celebrates the 16th anniversary of the Genesis Block, Baehr noted that this asset class is still in its infancy compared to traditional financial instruments. Baehr highlighted four key areas driving its adoption momentum:

  • Government reserves – The government incorporates Bitcoin into its strategic reserves.

  • Use cases in business – Growing interest from large corporations.

  • Institutional investment – Gradual participation from pension funds and insurance companies.

  • Personal consulting and commitment – Broader education and the adoption of financial consulting services.

Baehr stated that this adoption momentum is expected to support Bitcoin's medium and long-term price stability and gradually reduce the notorious volatility of this currency.

Regulation remains a key factor for the cryptocurrency market. While Bitcoin itself operates under a relatively solid framework with futures, ETFs, and options, stablecoins are expected to gain significant traction this year. "If stablecoin legislation is passed, these tokens will require blockchain to trade, further expanding the utility of platforms like Ethereum and other layer 1 solutions," Baehr said.

While Bitcoin's upward momentum has slowed since December, the next rally may be on the horizon. "When the momentum returns, we believe this will be a broad rally across the cryptocurrency market," Baehr said.

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