Ecoinometrics, a leading analytics firm, has projected that Bitcoin could potentially reach six-digit values by 2025 if certain key factors, such as strong momentum, continue to hold. The correlation between Bitcoin and the NASDAQ, as well as on-chain data, suggests that the cryptocurrency still has bullish potential.
According to Ecoinometrics’ analysis, if Bitcoin maintains stable on-chain activity and the momentum for risky assets remains high, the price of the coin could exceed $130,000 by the end of 2025. Currently, Bitcoin’s price is around $65,000, and it is crucial to maintain this level in order to induce a positive trend.
To evaluate the potential growth of Bitcoin, Ecoinometrics uses a basic model that considers four main elements: on-chain activity, Bitcoin price volatility, and the momentum of Bitcoin and other risky assets. Under an optimistic scenario, the average annual return for Bitcoin and related assets, assuming they maintain their momentum, could be as high as 148%, with a median return prediction of approximately 103%.
While there is a possibility of a 26% decline in the worst-case scenario, the study also highlights that Bitcoin’s potential upside in the next 12 months could reach 465%. Analysts emphasize the importance of maintaining Bitcoin’s price above $65,000 to build upward momentum.
In addition to technical factors, Ecoinometrics emphasizes how Bitcoin’s ability to sustain a price above $65,000 could disrupt the pattern of lower highs and lower lows that has been observed since March. Breaking this pattern could signify a major turning point for the digital asset.
Furthermore, the correlation between Bitcoin and the US stock market, specifically the NASDAQ 100, suggests a close link between the two. Analysts believe that if general stock markets continue to show an upward trend, it will benefit Bitcoin. Recent on-chain data also supports the theory that Bitcoin owners are holding onto their positions, which is a positive sign for future price movement.
Apart from technical analysis, Ecoinometrics notes that the price of Bitcoin could be influenced by the expansion of the US money supply (M2). Although the money supply is increasing, experts caution that the rate of increase is not as significant as what was observed during the COVID-19 pandemic. Ecoinometrics argues that the current rise in the money supply is a normalization phase following the pandemic era, rather than a new phase of expansion.
Ecoinometrics asserts that Bitcoin can still offer consistent profits without the need for a massive influx of cash into the economy. As fiat currencies continue to be devalued due to budget deficits and rising government debt, Bitcoin’s role as a hedge against this devaluation becomes increasingly important. It remains an attractive safe haven from the fall of fiat currencies.
While Ecoinometrics highlights the potential of Bitcoin, Ki Young Ju, CEO of CryptoQuant, predicts that Bitcoin will become a widespread currency by 2030. Ju expects that growing institutional interest and increasing mining difficulty will significantly reduce the volatility of Bitcoin in the coming years.
At the time of writing, Bitcoin’s price was $67,039.04, having experienced a decline of 1.39% over the past 24 hours. The daily trading volume was $39.80 billion.
In conclusion, Bitcoin’s potential for reaching six-digit values by 2025 is supported by factors such as strong momentum, correlation with stock markets, and its role as a hedge against fiat currency devaluation. However, it is crucial for Bitcoin to maintain its price above $65,000 and continue to demonstrate positive trends in order to realize this potential.