Multiple risks to Bitcoin’s 2025 bull market have emerged, according to a new report from Matrixport. The report outlines threats ranging from BlackRock’s concerns about Bitcoin’s 21 million supply cap to Google’s advances in quantum computing.
The warnings come as Bitcoin faces pressure on multiple fronts. Leading analysts, including Peter Brandt and Tone Vays, have identified technical patterns suggesting a potential drop to the $70,000-$73,000 range. These technical warnings align with Matrixport‘s broader analysis of macro risks, including changing Federal Reserve policy expectations and potential impacts from Trump’s upcoming presidency.
BlackRock questions BTC supply and accompanying threats
BlackRock had posed a question about the guarantee of Bitcoin’s 21 million supply cap. As one of the largest asset managers now involved in Bitcoin through ETFs, BlackRock’s statement carries weight in market discussions.
Google’s announcement of its “Willow” quantum chip, featuring 105 qubits, has brought quantum computing threats back into focus. While current quantum technology cannot break Bitcoin’s cryptographic defenses, the pace of advancement raises questions about long-term security. The report notes that quantum computing remains in its early stages, lacking the scale needed to pose an immediate threat to Bitcoin’s security model.
The Federal Reserve’s updated inflation outlook adds another layer of uncertainty. According to Matrixport, the Fed members have raised their inflation expectations, citing concerns about Trump’s potential tariff policies rather than traditional economic factors like supply bottlenecks or growth rates.
Matrixport’s inflation model indicates these concerns may be overstated, potentially allowing the Fed to maintain an accommodative policy through 2025. During Trump’s first term, similar tariffs had little impact on inflation. This suggests that the Fed’s current projections might not match economic realities.
Technical analysis points to deeper correction
Three prominent analysts have identified $95,000 as a critical price level for Bitcoin. Tone Vays warns that trading below this threshold opens the path for a correction to $73,000. This analysis aligns with Peter Brandt’s identification of a “broadening triangle” pattern, which projects a potential drop to $70,000.
On-chain data supports these technical warnings. Price analysis shows limited wallet support between current levels and $70,085, creating what traders call “open air” below $93,806.
On the other hand, @fundstrat maintains that #Bitcoin $BTC will likely reach $250,000 in 2025, but first, according to @MarkNewtonCMT, a downswing to $60,000 is on the horizon. pic.twitter.com/44rG8EVUV4
— Ali (@ali_charts) December 26, 2024
This gap in strong support levels means Bitcoin could move quickly through this range if selling pressure increases. The concentration of predictions around the $70,000-$73,000 range from different analytical approaches adds weight to this target zone.
Historical price patterns from previous bull markets help explain why these support levels matter. Past corrections during bull markets have often found support at previous resistance levels, making the $70,000 area particularly important as it marked Bitcoin’s previous all-time high before the recent breakout. This price zone also coincides with institutional entry points from late 2024, suggesting potential buying interest at these levels.
Political and monetary policy risks
According to Matrixport, the Fed’s monetary policy outlook faces new pressures as Trump’s presidency approaches. The FOMC may adopt a more hawkish stance in response to potential fiscal policies under Trump. This could create uncertainty for Bitcoin and the broader crypto market. This shift marks a change from December 2021, when the move away from near-zero interest rates began a new policy cycle.
The regulatory situation has often influenced Bitcoin bull markets at key turning points. Past examples show how regulatory actions can end bull cycles.
China’s PBoC banned banks from crypto dealings in January 2017, the SEC took action against unregistered fundraising in December 2017, and China restricted crypto mining in May 2021. While many regulatory concerns have eased with the SEC’s approval of Bitcoin spot ETFs, new policy challenges could come up.
Looking ahead to 2025, the interaction between Trump’s fiscal policies and Fed responses may determine Bitcoin’s price direction. Matrixport’s inflation model, which predicted the 2023 bull market when others forecasted recession, suggests inflation should not pose major problems next year.
However, the combination of new fiscal policies, changing Fed responses, and evolving regulatory frameworks creates a complex environment for Bitcoin’s price development through 2025.
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