History does not repeat itself, but it often rhymes.

Stop for a moment and think about how far Bitcoin (Bitcoin 0.04%) arrived. What was once worth just a few cents has blossomed over the past decade and a half and is now worth more than $60,000. By most accounts, it’s probably a safe bet that Bitcoin will continue to rise over the next 15 years. But what about the more immediate future?

Here’s a little speculation about where Bitcoin could go in 2025.

Image source: Getty Images.

The Cyclical Nature of Bitcoin

As unpredictable as the price of Bitcoin may seem, since its inception in 2009, it has followed an eerily similar pattern over periods of approximately four years. Referred to as a cycle, Bitcoin has gone through three cycles so far and is currently in its fourth.

It’s probably no coincidence that the duration is four years, as that’s how often Bitcoin reduce by half occurs. After every 210,000 blocks added to its blockchain (which happens approximately every four years), Bitcoin’s inflation rate is halved. This change essentially introduces a supply shock and means that even if demand remains constant, its price have to go up to compensate for the reduction in your offer.

Typically, the four-year cycle goes something like this. It begins with a bear market phase, like the one seen in 2022, characterized by a sharp decline from a previous peak. The following year typically marks the beginning of a recovery phase, similar to the upward trend we saw in 2023. The third year, which includes the halving and is the one we’re currently in since Bitcoin halved in April, has often triggered notable price increases as anticipation of a reduced supply becomes apparent. Finally, the fourth year, which would be 2025 if the cycle were to hold, Bitcoin has tended to experience its most notable gains.

Projecting Bitcoin Price in 2025

While there are no guarantees, Bitcoin appears to be following its four-year historical pattern for now. Assuming that the pattern will continue, we can make educated guesses about what its price might be in 2025 based on what has occurred in previous cycles. Let’s start with 2024, the current year, as Bitcoin underwent its last halving in April.

As explained previously, the halving has a great influence on the price of Bitcoin. In 2012, the year of Bitcoin’s first halving, it jumped 119%. Four years later, in 2016, it achieved a commendable gain of 93%. And in 2020, it soared 174%. This means that in years where a halving occurs, Bitcoin has increased by an average of around 125%. Let’s start here before entering 2025.

If Bitcoin grows 125%, then when measuring its price in early 2024, it would be plausible to expect Bitcoin to be worth $99,000 by the end of the year. Given that Bitcoin is already up around 60% this year, it would only take another 60% jump to maintain the historical norm. This may seem significant, but remember, this is Bitcoin. History shows it can cover that kind of ground in just a few months.

Assuming 2024 plays out this way, we could see Bitcoin at nearly $100,000 by early 2025. That in itself is impressive and makes investing today a valuable opportunity. However, in previous cycles, the total effect of the halving reached its peak in the year following the event.

In 2013, a year after Bitcoin’s first halving, it grew by an astonishing 840%. After another halving in 2016, it followed in 2017 with a 331% gain. Then in 2020 it rose a healthy 174%. Add it all up and, on average, Bitcoin has made staggering gains of 400% during these post-halving years. Therefore, when measured from a projected starting price of $99,000 in early 2025, a 400% increase would push the price of Bitcoin to nearly $500,000 by the end of next year.

Managing expectations

It is worth recognizing that past performance is no guarantee of future results. However, until proven otherwise, the continuation of Bitcoin’s four-year cycle is, at the very least, convincing.

What’s more important is that history shows that the full effect of halving doesn’t fully materialize until at least a year later. Furthermore, even if Bitcoin falls below its post-halving year average in 2025 or the cyclical pattern is broken, it could be argued that few other assets offer as much long-term potential as Bitcoin.

With its finite supply of 21 million coins and industry-leading levels of decentralization and security, Bitcoin has become the quintessential cryptocurrency, an achievement that should help it sustain its price appreciation journey for years to come.

Fuente