Bitfinex Alpha | Outlook 2025: New peaks await, but volatility is also high!

December 17th Bitfinex Alpha | Outlook 2025: New peaks await, but volatility is also high!

Bitcoin has achieved incredible results, with a market capitalization exceeding $2 trillion and a price reaching $100,000! Currently, 94.25% of the total 21 million Bitcoins have been mined, making Bitcoin the 7th largest asset in the world, surpassing both silver and Saudi Aramco Oil & Gas Company. In particular, ETFs will become the dominant player in the Bitcoin market in 2024, holding over 1.13 million BTC, with total investment inflows into spot ETFs in the United States reaching $35.5 billion. Bitfinex Alpha 135 is the final version for 2024, and overall, analysts have an optimistic outlook for 2025.

Since the bear market low of $15,487 in November 2022, Bitcoin has surged more than 573% and is up 130% year-over-year. The current bull market shows tremendous institutional demand, especially through ETFs and spot trading. Historical data shows that we are in the middle of a growth cycle following the April 2024 halving. The market is expected to peak in the third or fourth quarter of 2025, approximately 450 days after the halving.

cyclical indicator

Indicators such as MVRV, NUPL, and the Bull-Bear Market Cycle Indicator show that the market is still growing but not yet overheated. Models predicting the cycle peak suggest that Bitcoin price could reach between $145,000 and $189,000. Compared to previous cycles, Bitcoin’s growth appears more muted this time around.

Key trends and future prospects

Bitcoin price may fluctuate in the first quarter of 2025, but the overall trend remains bullish thanks to Bitcoin’s increasing importance in ETFs, institutional adoption, and global financial markets. However, investors should be on the lookout for signs of overbought Bitcoin as it approaches the peak of its cycle.

US economic situation: Bitcoin price performance in 2025 will also depend on the U.S. economic situation. Currently, the U.S. economy is gradually stabilizing in key areas.

• The labor market is steadily adjusting, with the unemployment rate rising slightly to 4.2% due to an increase in labor supply rather than a decrease in jobs.
• Wage growth remains healthy (4% per year) and supports consumer spending. Industries such as healthcare and entertainment also showed signs of economic recovery.
• The Federal Reserve is expected to be cautious in cutting interest rates to balance the cool labor market and inflationary pressures.
• The housing market maintains stable demand, and despite high mortgage interest rates, housing prices are expected to rise by 2.4%. However, affordability remains a challenge, especially for first home buyers.
• Inflation remains a concern, with core CPI remaining at 3.3%, reflecting continued pressure on automobile and durable goods prices. The Federal Reserve is having difficulty achieving its 2% inflation target.
• Strong economic growth (expected at 3.8% in the fourth quarter) supports the Fed’s monetary easing, but adjustments may be necessary if inflation continues to rise.

Stock Market Outlook: New U.S. President Donald Trump’s stock market outlook will be influenced by policies that support economic growth, such as tax cuts and deregulation. This will benefit the industrials, financials and consumer discretionary sectors. The housing market is growing slowly and housing supply is improving, which can support real estate-related stocks. However, home loan interest rates remain high, making it difficult to purchase a home, which could limit profits for companies in this sector. History often shows stock markets rising after the Federal Reserve cuts interest rates. The S&P 500 and Dow Jones have performed well since the recent interest rate cuts. However, risks such as inflation, international political tensions, and financial constraints can have a negative impact on the stock market in the long term.

Simply put: 2025 is expected to be an optimistic yet cautious year due to stable economic growth, structural challenges and policy adjustments. While sector-wide stability provides an optimistic outlook, external risks and inflationary pressures remain factors to watch.

Bitfinex wishes our readers a peaceful, warm and joy-filled Christmas! See you in the new year with more in-depth analysis and perspective. Happy holidays!

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