Citi analyst: Bitcoin has the potential to rise significantly by 2025 and reach a new high

Citigroup analysts are optimistic about the significant rise in the Cryptocurrency field by 2025. They believe that this rise will be driven by favorable policies from the Trump administration, increased inflow of funds from ETFs (exchange-traded funds), and advancements in Stable Coin technology. BTC has the potential to reach new all-time highs (ATH).

Citigroup analysts led by Alex Saunders said in a report on Friday that this year has been a strong year for cryptocurrencies, with a total market cap rising by more than 90%.

The pro-cryptocurrency stance of the officials appointed by the U.S. Securities and Exchange Commission (SEC) by Trump is creating a more favorable environment for digital assets. BTC reached a historic high this year, boosted by the approval of the U.S. spot ETF and Trump's election victory, despite the outperformance of some assets over BTC.

Market analysts predict that both BTC and Ethereum coin will see significant development by 2025, driven by factors including the expected approval of the US Cryptocurrency ETF and the possible establishment of BTC strategic reserves.

The U.S. Securities and Exchange Commission (SEC) has given the green light to BTC spot ETF, which further boosts investor interest and capital inflows into BTC. According to CoinDesk's BTC price index, this approval has already had a significant impact, with BTC prices doubling since last year. Analysts say, 'These capital inflows have been the most important driver of cryptocurrency returns, and we expect this trend to continue until 2025.'

The expectation of Trump's re-election to launch cryptocurrency-friendly policies has also injected optimism into the cryptocurrency market. However, it is also pointed out that the Fed's interest rate policy may affect investor sentiment and may shift investors' focus from risky assets such as BTC.

Analysts say that in this year's rise, BTC will bring added value to diversified asset portfolios. However, it remains an unstable risk asset, with over 3% allocation accounting for 10% or more of the total portfolio risk. Therefore, Citigroup analysts say that the pricing of Cryptocurrency returns needs to be several percentage points higher than the expected return of stocks to justify a 1% portfolio allocation as reasonable, "If the portfolio allocation is 5%, then the performance must be double digits."

In addition, analysts say that the continued issuance of Stable Coins will help create a healthier Cryptocurrency market. After Trump's election, the industry's enthusiasm reignited, and the issuance of Stable Coins was also boosted. The purpose of Stable Coins is to maintain a stable price over time, which means that as long as the issuer of Stable Coins has enough collateral to support them, their volatility is lower than that of Cryptocurrencies such as BTC.

Analysts say that the innovation, partnerships, and new entrants in the stablecoin field could pose a risk to Tether's dominant position, but 'these developments may help stablecoins continue to lead the development of decentralized finance,' and 'we largely believe that diversification in the stablecoin market is positive as it reduces the possibility of systemic risks from specific issuers'.

Finally, with the inauguration of Trump, regulation will be the main theme next year. The incoming US president has appointed several candidates who support Cryptocurrency to enter the cabinet. Although the industry generally expects the regulation to be more lenient, the actual policy is still unclear. Analysts say the result may be a shift from law enforcement regulation to a more legislative approach, "rather than loosening regulation, it is more about eliminating unfavorable factors."

Overall Market Outlook

The cryptocurrency sector is expected to experience a significant rise driven by multiple factors, including the approval of the US Cryptocurrency ETF, strategic reserves of BTC, and innovation in stablecoins. These developments are expected to make cryptocurrency more mainstream and boost investor confidence. Citigroup analysts believe that the cryptocurrency market will experience significant growth in 2025, with BTC and Ethereum coins both expected to reach new historical highs. However, investors must remain vigilant about the risks associated with these highly volatile assets.

Key factors driving the rise of Cryptocurrency include:

The approval of the US spot ETF has significantly increased investor interest and capital inflows into BTC, helping to boost its price surge.

Cryptocurrency occupies a place in a diversified asset investment portfolio, and portfolio allocation will also be the key to future returns.

Officials appointed by Trump, including the nomination of Paul Atkins as the new SEC chairman, are expected to lead to relaxed regulation, which could drive the wider application of Cryptocurrency.

The innovation of Stablecoin is also expected to play a key role in the rise of the cryptocurrency market, providing investors with a more stable alternative.

The current macro environment is characterized by central bank interest rate cuts and other policies that support the rise of the economy, and is expected to continue to support risk trading until the first quarter of 2025.

The US government may establish a BTC strategic reserve, further boosting the price of BTC and increasing its mainstream acceptance.

Citigroup analysts say that if the US government can implement a strategic reserve of BTC, it may further boost the price of BTC. Some forecasts indicate that BTC could reach $180,000 to $200,000 in 2025, and some even predict that if such a reserve is established, the price could reach $500,000.

Regarding the prediction of Ethereum coin, other analysts in the market also indicated that they foresee a wide trading range by 2025, with the lowest price possibly around $2,666, the highest price possibly around $5,501, and the expected average price at $3,906.18, showing potential for rise compared to 2024.

Ethereum's rise is also expected to be driven by ecosystem expansion and BTC hitting a historical high. These factors combined may push up the price of Ethereum, and if favorable conditions persist, it may eventually reach $5,888. In 2024, Ethereum's resistance is at $3,966.75 and support is at $3,098.08. The expected support price in 2025 is $3,174.56, with resistance at $4,872.09.

〈Citigroup Analyst: BTC has the potential to reach new highs by 2025 and rise significantly〉This article was first published on Blockcast.