4 Important Economic Events That Could Shape the Value of Bitcoin in 2025

As 2024 is slowly coming to a close, the passionate Bitcoin community can’t help but speculate about the future of this currency in 2025. With only a few days left in 2024, many noteworthy events are looming, which could bring opportunities but also pose significant challenges to the value of Bitcoin compared to fiat currency. In addition to the increasing demand for ETP products and companies like MicroStrategy continuing to accumulate Bitcoin as a reserve asset, there are many external factors that could change the landscape of Bitcoin.

1. Decisions on interest rates by the Federal Reserve Unless there are any unexpected changes, economists do not expect any new stimulus measures in the coming year. However, discussions on coordinated interest rate cuts are still being considered. Recently, after the Federal Reserve’s interest rate adjustment meeting, Federal Reserve Chairman Jerome Powell announced that if there were interest rate cuts, the reduction could be modest by 2024. His cautious stance has put pressure on the price of Bitcoin (BTC). According to CME’s Fedwatch tool, the federal fund rate is likely to remain unchanged at the next meeting of the Federal Open Market Committee (FOMC) on January 29. The meeting will take place just nine days after Donald Trump’s inauguration as the 47th President of the United States. The current CME tool indicates a 91.4% probability of unchanged interest rates, while the likelihood of a 0.25 percentage point cut is 8.6%. Although decisions by the Federal Reserve sometimes do not have a significant impact on the market, they can affect market sentiment, as seen last week when the price of Bitcoin dropped amid recent negative comments from Powell.
2. Trade policies and customs duties The current trade policies of the Biden administration are relatively cautious, however, many people predict that once Trump returns as the 47th President of the United States, he may re-impose strong tariff policies, which could have significant impacts on the global economy. These changes could affect the inflation rate, which is expected to decrease from 5.9% in 2024 to 4.5% in 2025. However, developed economies may achieve the inflation reduction target faster than emerging markets. Nevertheless, if tariffs continue to be maintained, inflation may still remain high, leading to increased consumer costs in the United States. Fluctuations in trade, inflation, and tariffs can have a significant impact on the value of Bitcoin. Historically, economic instability often drives investors to alternative assets such as Bitcoin, seen as a “safe haven” during volatile market periods. However, the trajectory of Bitcoin will depend on how trade policies, inflation trends, and legal changes interact with each other.
3. Political risk The political tensions, especially the conflict in Ukraine and the situation in the Middle East, combined with the increasing global public debt, may continue to pose significant challenges to the global economy. These crises disrupt supply chains, drive up oil prices and many other commodities, thus affecting the global economy. In response, some investors may shift to Bitcoin, seeing it as a ‘safe haven’ during times of instability. However, there are also many investors who see Bitcoin as a risky asset and will sell off in times of instability. In addition, the increasing public debt can undermine confidence in fiat currencies, fueling interest in decentralized currencies such as Bitcoin. However, the volatility of Bitcoin can still be influenced by unpredictable factors, especially in the context of military crises or unexpected events, such as the Black Swan.
4. Impact of other factors In addition to the three factors mentioned above, other events such as technological advancements, changes in investment trends, and new legal regulations will also have a significant impact on the Bitcoin market. While some factors may drive the value of Bitcoin, such as wider acceptance by financial institutions, legal changes or stricter regulation could create major barriers to the development of this currency. Conclusion The future of Bitcoin in 2025 will be influenced by many economic, political, and social factors. While fluctuations such as rising interest rates, customs tax policies, and geopolitical tensions may strongly affect the value of Bitcoin, the crypto market still shows clear instability and unpredictability. This requires investors to be cautious and closely monitor economic developments in the near future. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)