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- its... all over...[??]
Its one of those weeks where the TL is full of doomers claiming its all over. Pack it up, sell your tokens, sell everything! People are rightfully concerned with risk assets - bond yields are rising, labor market is tightening, and theres unclear policy with the incoming administration [and threats of force]. All of this [and more] is causing some investment market participants to get uneasy, and its having trickle effects into crypto and bitcoin prices. We saw Bitcoin peak at over $108k in December and chop down around $91k in the new year, rebounding to around $94.5k as of the time of writing. Despite the market's cautious tone there are a number of positive catalysts with varying degree of probability in 2025 that could bring positive winds toward Bitcoin and crypto in general. The three that I’ve been thinking about the most are, the US officially creating a Strategic Bitcoin Reserve (SBR), advisors beginning to recommend allocations into crypto ETFs, and geopolitical tensions simmering down or resolving.
The concept of a U.S. Strategic Bitcoin Reserve was popularized by Senator Cynthia Lummis in 2024 with her introduction of BITCOIN Act of 2024. This aims to position Bitcoin as a strategic asset to hedge against inflation, reduce national debt, and strengthen U.S. financial leadership globally. This bill highlights Bitcoin’s increasing acceptance as a valuable asset in macroeconomic strategy, positioning it alongside gold reserves, strategic petroleum reserve, and other reserves. President Trump has also indicated that he will form a SBR when elected and has made crypto a big part of his agenda. In this scenario I think its likely we’d see other sovereigns copy trade the US, and some may even front run to stack sats.
The second potential catalyst we’re all ready seeing data point toward. Advisors see the recent success of Bitcoin ETFs which has opened the door for institutional investors to enter the market. Bitwise’s latest survey reveals 56% of advisors said they’re more likely to invest in crypto in 2025 after Trump’s win. The thesis here is simple - there is a perception that Trump is really good for crypto - he has released multiple NFT projects via the Trump Digital Trading Cards, his family has an unreleased DeFi protocol called World Liberty Financial, and he continually speaks about the price of Bitcoin as a measure of his success. Advisors shifting the balance of power in investment accounts could help support price stability through stickier long term holders that are regularly contributing to retirement plans. The infinite retirement account bid begins.
Lastly, there are a number of geopolitical conflicts unfolding around the globe, each with far-reaching implications. Tensions in the Middle East, such as ongoing disputes involving Iran and Israel, continue to influence oil markets and broader energy prices, which have ripple effects on inflation and global economic stability. The Russia-Ukraine conflict remains a significant disruptor, impacting European energy supplies, grain exports, and overall market sentiment. Additionally, China’s assertiveness in the Asia-Pacific region, including heightened tensions over Taiwan and disputes in the South China Sea, poses risks to global trade routes and supply chains critical to manufacturing and technology sectors. These conflicts collectively shape commodity prices, destabilize markets, influence currency valuations, and exacerbate supply chain disruptions. While I’m no geopolitical expert and cannot predict the likelihood of these situations de-escalating in 2025, even incremental progress toward peace or reduced tensions could provide a stabilizing effect. This stability could foster a sense of optimism in global markets, potentially reigniting risk-on sentiment.
In a period marked by economic uncertainty and shifting global dynamics, Bitcoin and crypto markets are at a pivotal juncture. A lot of us sat through the last bear market waiting for the cycle to return, and its returned better than ever. I’ve never been more excited about the progress around not only the advancements in blockchain technology, friction reducing products being built, institutional grade crypto products, and the political landscape changing. While short-term volatility may persist, the emergence of initiatives like a Strategic Bitcoin Reserve, institutional adoption through ETFs, and corporate treasury integration underscore the growing legitimacy of Bitcoin as a long-term asset. Coupled with potential geopolitical stabilization, and we have the recipe for a strong foundation for future growth. We’ve seen Bitcoin’s role in the global financial ecosystem continue to evolve, and I think 2025 will be the biggest year to date.
Bonus: Corporate balance sheets adding Bitcoin would mark a significant shift in how businesses manage their financial reserves, signaling the growing legitimacy and mainstream adoption of digital assets. Companies could adopt Bitcoin as a hedge against inflation, a tool for higher returns on idle cash, or as part of an innovation-focused brand strategy. It could drive innovations in corporate treasury management, with businesses exploring new strategies like staking, yield generation through DeFi, or Bitcoin-backed loans. Such adoption could redefine traditional corporate treasuries, historically dominated by cash, bonds, and equities, to include digital assets. While such adoption holds significant promise, challenges like regulatory uncertainties, Bitcoin's price volatility, and risk-averse corporate cultures may slow the pace of adoption. However, these discussions signify a foundational shift in how businesses are starting to view digital assets. Even though Microsoft recently voted against a proposal to add Bitcoin to its balance sheet, the fact that such discussions are taking place at a company of this scale reflects the growing seriousness with which corporations are considering digital assets.
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