With just a few weeks to go until the end of 2024, $BTC price has climbed by around 150% to surpass the $100,000 per coin mark.
Although Bitcoin has been oscillating above and below the $100,000 mark since then, it has even looked above $107,000 as of today (December 16, 2024) and there are plenty of reasons to remain optimistic about the future of this cryptocurrency.
Let's take a look at some positive catalysts that could positively impact Bitcoin in 2025 and assess where it could be trading this time next year.
Securities and Exchange Commission shakeup
Gary Gensler is one of the most interesting figures in the financial world today. A former investment banker at Goldman Sachs, Gensler initially focused on mergers and acquisitions (M&A) before moving on to other positions in trading and bonds.
In the late 1990s, however, Gensler left Wall Street to pursue a career in public administration. Gensler served in various capacities under Presidents Clinton, Obama and now Biden. He has been chairman of the Securities and Exchange Commission (SEC) since 2021.
On November 20, the Securities and Exchange Commission issued a statement that Chairman Gensler will step down from his position at the SEC on January 20. While it may look like Chairman Gensler is retiring, note the timing of his resignation - January 20, 2025 is the inauguration day of President-elect Trump.
A new regulatory environment could be on the way
One of the main reasons Gensler is leaving the SEC likely has to do with his philosophy regarding the cryptocurrency environment.
Trump seems to be taking a more open-minded approach to crypto-regulation, listening to some of the ideas being pushed by prominent executives at crypto companies like Coinbase.
While the digital asset industry has made some progress under Gensler - for example, the introduction of spot bitcoin ETFs - the incoming administration seems more sympathetic to the crypto industry in terms of regulation than what is currently in place.
The first step towards a shift in cryptocurrency regulation is the Financial Innovation and Technology for the 21st Century Act (FIT21). This bill was passed by the House of Representatives back in May.
At its core, FIT21 aims to form more robust guidelines regarding the regulation of cryptocurrencies.
One significant part of the bill is determining how the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will oversee digital assets.
President-elect Trump also nominated pro-crypto trader Paul Atkins to succeed Gensler as SEC chairman.
In addition, the Republican Party will have majority control of both the House of Representatives and the Senate. Such dynamics should help with the Atkins cabinet approval process while providing Trump with a fast track to signing FIT21.
What effect could the introduction of tariffs have on Bitcoin?
In addition to the above points, another large-scale change that could be in the pipeline under the new Trump administration is the introduction of tariffs.
While it is too early to tell at this point what impact tariffs would have on the economy, there is a very real possibility that they could increase the cost of goods and services in the short term.
As a result, consumer spending power could weaken, which could ultimately slow economic growth for a period of time.
These dynamics would have a direct impact on businesses and the stock market. If companies begin to show signs of slowing sales or weaker profit margins, the stock market could begin to sell off.
Given the growing acceptance of cryptocurrencies, it would not be surprising if major cryptocurrencies, such as Bitcoin, start to move upwards as investors add them to portfolios as an additional layer of diversification.
Will Bitcoin be higher or lower a year from now?
The chart below shows the price of Bitcoin through 2024. After a short-term blip at the beginning of the year, Bitcoin price movements during the spring and summer were actually pretty mundane. It wasn't until around the time of the election that Bitcoin started to rise significantly.
The recent momentum driving Bitcoin could indicate optimism about how the incoming administration will positively impact and change the crypto environment.
While it is impossible to say with certainty which direction the Bitcoin price will move, history suggests that it should continue to rise sharply under the new Trump administration.
Given that the incoming administration is more sympathetic to cryptocurrencies, cautious optimism is in order. From a fundamental perspective, Bitcoin should continue to grow next year.