Citigroup analyst Alex Saunders pointed out six key factors driving Bitcoin to $200,000 by 2025 in a report last Friday, including ETF activity, regulation, and the future of stablecoins;
1. Supportive macro backdrop Analysts expect the current macro backdrop to continue supporting high-risk trading in the first quarter of next year, but warn that the outlook thereafter is less certain. They stated that the outlook may shift depending on Trump's economic policies and stock market volatility.
2. Continued capital inflow into spot ETFs Analysts expect strong capital inflow into cryptocurrency spot ETFs in their first year of listing to continue into 2025, providing further momentum for price growth.
3. Cryptocurrency allocation in portfolios Portfolio allocation will also be key to future returns from cryptocurrencies. Analysts noted that during this year's rebound, Bitcoin added value to multi-asset portfolios. Nevertheless, it remains a highly volatile and risky asset, with risk to the total portfolio exceeding 10% or more when its allocation exceeds 3%.
4. Stablecoin issuance Analysts indicated that the continued issuance of stablecoins has been boosted following Trump's election, which will help create a healthier cryptocurrency market.
5. Higher adoption rates Analysts stated that the most important theme to track for cryptocurrencies is adoption rates.
6. Relaxed regulation Finally, analysts noted that regulation will be a major theme next year with Trump's administration. The incoming U.S. president has appointed several candidates who support cryptocurrencies to his cabinet. Their policies are unclear, but the industry generally expects regulations to be more relaxed, which could drive wider adoption.
