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The incoming Trump administration’s crypto regulations and the US Federal Reserve’s monetary policy path remain the biggest factors influencing Bitcoin’s price trajectory.
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Bitcoin could benefit from more than $612 billion in new liquidity during the first quarter of 2025, potentially mitigating investor concerns over delayed crypto regulations in the United States.
Bitcoin (BTC) fell nearly 6% in the 24 hours leading up to 8:00 am UTC on Jan. 8, falling below the $100,000 mark, which has served as a psychological resistance since Dec. 19, Cointelegraph Markets Pro data shows.
BTC/USD 1-month chart. Source: Cointelegraph
While President-elect Donald Trump’s upcoming inauguration on Jan. 20 is seen as a positive for the cryptocurrency industry, delays in implementing crypto regulations could dampen investor sentiment and drive down valuations.
However, the addition of $612 billion in new liquidity to the US Treasury by March 2025 may counterbalance any regulatory disappointment, according to Arthur Hayes, co-founder of BitMEX. In a Jan. 7 blog post, Hayes wrote:
“A letdown by team Trump on his proposed pro-crypto and pro-business legislation can be covered by an extremely positive dollar liquidity environment, an increase of up to $612 billion in the first quarter.”
Treasury general account (TGA) starting Balance. Source: Arthur Hayes/Substack
According to Hayes, money printing will accelerate after Trump’s inauguration, leading to a local top for Bitcoin in March before the start of a potential correction.
Hayes said the correction will likely be driven by disappointment around lagging crypto policy from the Trump administration.
“The market will instantly wake up to the reality that Trump has at best one year to enact any policy changes on or around January 20th. This realization will lead to a vicious sell-off in crypto and other Trump 2.0 equity trades,” Hayes wrote in a Dec. 18 post.
Despite a potential regulatory disappointment, analysts remain optimistic about Bitcoin’s price trajectory, with some expecting a cycle top above $150,000 in late 2025, driven by a predicted $20 trillion increase in the global money supply, which could attract $2 trillion of investment into BTC.
Related: How $100K Bitcoin impacts the wealth gap in the digital age
Can Bitcoin recapture $100,000 ahead of Trump’s inauguration?
The recent Bitcoin correction has been attributed to reduced institutional investor activity during the holiday season.
However, institutional investors typically redeploy capital at the beginning of the new year. This institutional “liquidity boost” could help Bitcoin surpass $100,000 before Trump’s inauguration on Jan. 20, according to Binance Research:
“While it is possible for BTC to recapture $100K ahead of the Trump inauguration on expectations of positive crypto regulation, the market will need to see continued supportive conditions to maintain such levels.”
Related: China’s growing debt a great Bitcoin ‘buying opportunity’ — Arthur Hayes
“Sustaining these levels over the long term will depend on various factors, including the actual implementation of crypto regulations and the Federal Reserve’s policy path in 2025,” Binance Research added.
Institutional Bitcoin holders remain optimistic ahead of Trump’s inauguration. On Jan. 7, New York Stock Exchange-listed KULR Technology Group predicted that Bitcoin would breach $200,000 in 2025 after the firm bought the dip at $97,000.
Magazine: BTC hits $100K, Trump taps Paul Atkins for SEC chair, and more: Hodler’s Digest, Dec. 1 – 7
This article first appeared at Cointelegraph.com News
