The Zhitong Finance App learned that Bitcoin has experienced a historic year, rising 135.7% since the beginning of 2024, successfully breaking through the 0.1 million dollar mark. However, according to analysts, this is not the end; the cryptocurrency is expected to maintain this momentum in 2025.

Despite hawkish signals from the Federal Reserve on Wednesday that caused Bitcoin to drop below 0.1 million dollars, it quickly recovered most of its losses thereafter.

The rapid rise of cryptocurrencies can be attributed to some major events, such as the approval of the US Bitcoin Spot ETF in early 2024 and the victory of crypto-friendly Trump in the US presidential election.

As of July, governments around the world held 2.2% of the total Bitcoin supply, or 471,380.6 bitcoins worth $32.7 billion, of which the US held more than 0.2 million bitcoins, according to CoinGecko data.

Traders are now looking forward to next year, and analysts expect institutional capital flows to continue to drive the development of digital currencies.

Augustine Fan, head of SOFA Insights, said, “Bitcoin should have a good start in 2025 due to the Federal Reserve's dovish policies, the US economy remains strong, stock market sentiment, drastic changes in US cryptocurrency regulations and narratives, continued traditional capital inflows, and continuing tariff and foreign exchange pressure on emerging market currencies.”

Geoff Kendrick, head of cryptocurrency research at Standard Chartered Bank, said in a report that by the end of next year, institutional capital inflows into Bitcoin may also bring Bitcoin to 0.2 million dollars.

Trump's victory accelerated Bitcoin's surge, which broke through the $0.1 million threshold after the president-elect chose cryptocurrency supporter Paul Atkins as the chairman of the US Securities and Exchange Commission.

“US President-designate Trump's series of senior and pro-cryptocurrency appointments heralds a rapid transformation in US cryptocurrencies. We will be looking for important milestones in several areas, including clear regulatory clarity and the return of venture capital to the cryptocurrency sector, which marks a structural turning point in mainstream cryptocurrency adoption. 2025 is likely to be a year of integration with traditional finance (TradFi),” Fan added.

Companies such as MicroStrategy (MSTR.US) have also been on a Bitcoin buying spree, and more and more companies are looking to join this trend and drive increased enterprise adoption of cryptocurrencies.

Fan also anticipates that significant structural developments in cryptocurrency options will be the next catalyst for explosive growth after perpetual futures.

Nick Ruck, head of LVRG Research, said: “The new US administration has indicated that it will protect and try to promote the development of the cryptocurrency industry. Although Bitcoin has reached 0.1 million dollars and entered uncharted territory, many analysts and traders believe that 0.2 million to $0.25 million is the next critical level for Bitcoin to reach.”

However, cryptocurrencies can also have some drawbacks.

Fan said, “Downside concerns may stem from the removal of current leverage accumulation, the most obvious example being MicroStrategy's long position on Bitcoin. As stock prices and tech companies prosper overall, FOMO sentiment comes along with the overall boom in stock prices and tech companies, and we've begun to see a lot of the fluctuations that have already been realized because both sides have been squeezed out of leveraged positions.” He added that the continued rise in Bitcoin's dominance is a worrying development for the overall health of the cryptocurrency.

Fan added that the unexpected disappointment of policy measures and the suspension of MicroStrategy's high-risk bets may cause significant liquidation pressure in the first quarter, while the selling pressure caused by large-scale token unlocking may alert us to the shortcomings of the current tokenomics design.

However, Ruck believes that apart from common political and macroeconomic events such as trade wars, the potential negative effects are now limited.

BTSE Chief Operating Officer Jeff Mei believes that Bitcoin may reach the $0.125 million mark by the end of 2025, adding: “Although some say that Bitcoin's rise has been digested in the past month or so, we think the rebound has only just begun.”

Mei added that given Trump's support for cryptocurrency appointments, continued interest rate cuts, and China's stimulus spending, there are plenty of reasons to be bullish.