Ecoinometrics, a cryptocurrency analysis firm, has projected that Bitcoin could reach six-digit values by 2025 if certain key factors, such as strong momentum, continue. The correlation between Bitcoin and the NASDAQ, as well as on-chain data, indicate that the cryptocurrency still has bullish potential.
According to Ecoinometrics’ analysis, if Bitcoin’s on-chain activity remains stable and there is high momentum for risky assets, the price of Bitcoin could exceed $130,000 by the end of 2025. Currently, Bitcoin is priced around $65,000, so maintaining this level is crucial for a positive trend.
To evaluate Bitcoin’s potential, Ecoinometrics has developed 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 analysis predicts a median return of approximately 103%, resulting in an average annual return of 148% if Bitcoin and related assets maintain their momentum.
While there is a possibility of a 26% decline in the worst-case scenario, the study also suggests that Bitcoin’s 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.
Apart from technical factors, Ecoinometrics highlights 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. If this pattern is not broken, it could indicate a continuous downtrend. However, if Bitcoin avoids this and continues to move sideways or in a positive direction, it could experience a major turning point.
The correlation between Bitcoin and stock markets, particularly the NASDAQ 100, has been increasing since August, suggesting a closer link with the US stock market. Analysts believe that if general stock markets continue to show an upward trend, this correlation will benefit Bitcoin. Furthermore, recent on-chain data indicates that Bitcoin owners are holding onto their positions, which is a positive sign for future price movement.
In addition to technical analysis, Ecoinometrics notes that the price of Bitcoin could be influenced by the expansion of the US money supply (M2). Although M2 is increasing again, experts caution that the current increase is not as rapid as the explosive growth observed during the COVID-19 pandemic. Ecoinometrics suggests that the current rise in the money supply is a normalization phase rather than a new phase of expansion. While the increasing money supply could still be beneficial for Bitcoin investors, it is not on the same scale as what was seen in 2020 and 2021.
Ecoinometrics argues that Bitcoin can still generate consistent profits without a massive influx of new 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 fiat currency devaluation becomes increasingly important. The ongoing devaluation of fiat currencies has led to Bitcoin’s attraction as a safe haven investment.
On the other hand, Ki Young Ju, CEO of blockchain analytics company CryptoQuant, predicts that Bitcoin will become a widely accepted currency by 2030. Ju expects that growing institutional interest and increasing mining difficulty will significantly reduce Bitcoin’s volatility before the end of the decade.
As of the time of writing, Bitcoin has declined by 1.39% over the past 24 hours and is trading at $67,039.04 with a daily trading volume of $39.80 billion.
For more information on Bitcoin, you can refer to our recommended resources, including a guide to buying Bitcoin, a tutorial on Bitcoin wallets, and the latest Bitcoin news.