Four upcoming catalysts:

1. Rate cuts

Investors are focusing on the prospect of a rate cut from the Federal Reserve, anticipating that stocks could rise as a result. The same is true for Bitcoin, which acts like a speculative asset that appreciates when borrowing costs are low.

In fact, ultra-low interest rates in 2021 were largely responsible for driving Bitcoin prices to new all-time highs. The rally subsequently reversed when the Federal Reserve began to implement monetary tightening policies.

“In the first quarter, we had a reduction, but it was primarily a big adoption of ETFs. So as prices go up, now you’re looking at what the Fed can do,” Galaxy CEO Mike Novogratz told Bloomberg earlier this month.

He said Bitcoin’s price will likely remain in the $55,000 to $73,000 range until short-term rates fall.

2. Regulatory shift

The cryptocurrency community is also currently seeking consistency in regulation, which has often proved to be a hurdle for Bitcoin. For example, the U.S. Securities and Exchange Commission (SEC) lost a court case before finally approving a spot ETF.

But legal sentiment around cryptocurrencies appears to be adjusting. Oppenheimer Executive Director Owen Lau told CNBC in early May that one of the catalysts for Bitcoin’s future could be the upcoming stablecoin bill, which could be introduced as early as this year.

Meanwhile, the U.S. House of Representatives just passed a broad regulatory framework for the cryptocurrency industry, which was hailed as a victory for the industry. Although its fate in the Senate is still unclear, it will provide clearer rules for the cryptocurrency space.

3. US election in November

But real regulatory clarity will come after the presidential election, Novogratz said, noting candidate Donald Trump's growing support for the industry in contrast to President Biden's policies.

Geoff Kendrick of Standard Chartered Bank also said in a May report that Trump's victory would have a broadly positive impact on Bitcoin.

He added that growing concerns about U.S. deficit and debt trends could also drive bitcoin higher as investors will start looking for alternative investments. Kendrick said this is likely to happen with both candidates, as neither has proposed a plan to address government spending.

4. Expanding usage

As perceptions of Bitcoin change, the cryptocurrency itself is undergoing a reinvention of sorts.

Developers have been working to add features to the Bitcoin network, according to Bloomberg. These efforts are aimed at making the cryptocurrency more than just a speculative asset, and with projects coming online quickly, this could provide another catalyst.

For example, the recently released Ordinals protocol allows users to store more than just Bitcoin on the BTC blockchain and start trading assets like non-fungible tokens. Bitget managing director Gracy Chen wrote on X that the Ordinals market had already seen $3.42 million in daily trading volume in mid-May.

“The emergence of Ordinals on Bitcoin in 2023, the subsequent creation of the BRC-20 token standard, and now the Runes token standard, have helped drive interest in Bitcoin as a platform network rather than just a currency network,” Galaxy wrote in a report. Now, such projects are attracting significant attention from venture investors, the report said.