The crypto market currently faces significant correction pressures, yet many Bitcoin OGs believe the full bull run hasn't begun. Despite Bitcoin surpassing $100K in early 2025, its performance lacks the frenzy of past cycles. Four key factors in 2025 may determine whether Bitcoin reclaims six figures and ignites a full bull market:
Strategic Bitcoin Reserves
Governments increasingly discuss treating Bitcoin as a strategic asset. In 2024, U.S. Senator Cynthia Lummis and former President Trump proposed national digital asset reserves. El Salvador already holds Bitcoin as sovereign assets, while Germany and Japan explore similar policies.
👉 Why governments are stacking Bitcoin
Reality check: Trump's federal Bitcoin reserve proposal faces political hurdles, including intra-party GOP dissent. However, his March 7 crypto summit remarks reinforced commitment. Even a "mini-reserve" via executive order would trigger global reevaluations of sovereign crypto holdings.
Interest Rate Cuts & Monetary Policy
Liquidity fuels bull markets. As of March 2025, the Fed maintains 4.25%-4.5% rates, with potential late-2025 cuts. Economists suggest May/July reductions if trade wars trigger recession.
Key correlation: Bitcoin's price shows a 0.94 correlation with global M2 money supply growth. Analysts like Bitcoindata21 note: "Weak dollar = rising M2 = eventual Bitcoin breakout."
Regulatory Clarity & Stablecoin Laws
With stablecoin market cap exceeding $200B, 2025 saw:
- MiCA regulation enacted in the EU
- U.S. advancing the Clarity for Payment Stablecoins Act
SEC case dismissals for crypto firms signal friendlier oversight, inviting institutional capital to challenge Tether's dominance.
Ethereum: The Altcoin Catalyst
Paradigm's January 2025 report urged faster ETH protocol upgrades to maintain L1 leadership. Key 2025 developments:
- Ethereum Foundation shifts toward DeFi investments
Pectra upgrade (April) – 20+ EIPs including:
- EIP-3074 (transaction efficiency)
- EIP-7002 (validator optimization)
👉 Ethereum's make-or-break year
Analysts note ETH's high risk-reward ratio; upgrades could reverse underperformance.
FAQ
Q: What's the most realistic $100K Bitcoin scenario?
A: Strategic reserves + stablecoin regulations offer clearest path, though Fed policy remains wildcard.
Q: Why does Ethereum matter for Bitcoin's price?
A: ETH rallies lift DeFi/altcoin liquidity, creating ecosystem-wide momentum that benefits BTC.
Q: When could the next major Bitcoin rally occur?
A: Watch Q3 2025 for Pectra upgrade impacts and potential Fed pivot signals.
Bottom Line: While volatility persists, 2025's convergence of macro adoption, policy shifts, and tech milestones keeps $100K BTC plausible. The bull case hinges on institutional inflows meeting retail FOMO – a scenario increasingly grounded in tangible developments rather than pure speculation.