Author: Mu Mu

In recent times, the crypto market has faced severe pullback pressure, but many early Bitcoin participants (OGs) still believe that the current bull market has not yet fully started. Their reason is that although Bitcoin has reached more than $100,000 in early 2025, its performance has not been as crazy as in previous rounds of bull markets. Of course, predicting the future is a difficult thing, but there are four key points in 2025 that may be the main factors that determine whether Bitcoin can reach more than $100,000 again and start a full bull market...

Strategic Bitcoin Reserve

There are increasing discussions about the government considering Bitcoin as a strategic asset. In 2024, U.S. Senator Cynthia Lummis and Trump both proposed the establishment of a national digital asset reserve. In addition, El Salvador has already made its Bitcoin reserves a national asset. Other countries such as Germany and Japan are also discussing similar policies. However, the ideal is full, and the reality is very skinny. Whether the federal strategic Bitcoin reserve promoted by Trump or the strategic reserve proposed by various state government lawmakers in the United States will face many obstacles. Even within the Republican Party where Trump belongs, there are many differences, not to mention the Democratic Party. Recently, Trump once again mentioned the strategic reserve on social networks, and the upcoming crypto summit on March 7 has slightly boosted market confidence, at least showing his firm position. Judging from the current situation, if Trump insists, then there is a possibility of landing. Even if it is not passed by Congressional legislation, it can also bypass the resistance through executive orders and launch a mini version of the strategic Bitcoin reserve first. Of course, once the U.S. strategic reserve is established, no matter how big or small, it will be a milestone event, and countries and regions around the world will carefully consider whether to follow up on this matter.

Interest rate cuts and loose monetary policy

Sufficient liquidity is a prerequisite for a bull market, and there is still room for "interest rate cuts" this year. As of March 2025, the Fed has kept interest rates between 4.25% and 4.5%, and the market expects that interest rates may be cut later in 2025. Economists predict that if economic data is weak, the Fed may cut interest rates in May or July. Trump imposed tariffs on Canada, Mexico and China in February 2025, triggering a trade war that could bring huge pressure for a recession. At the same time, this may force the Fed to further cut interest rates to stimulate the economy. Research shows that Bitcoin prices are highly correlated with global M2 money supply growth, with a correlation coefficient of 0.94. Historical trends show that M2 growth usually drives Bitcoin prices up, especially when liquidity increases and interest rates fall. "A weak dollar has a net positive impact on global M2, and it is only a matter of time before Bitcoin achieves this goal," said cryptocurrency analyst Bitcoindata21 in a February 25 post on X. A similar view also appeared in the X post of Colin Talks Crypto, who said: "The global M2 money supply predicts that Bitcoin will usher in major changes."

Regulatory Framework and Stablecoin Act

At the beginning of 2025, the market value of stablecoins exceeded 200 billion US dollars, which has long attracted global regulatory attention. The European Union has implemented the MiCA regulations in January 2025, and the US Congress is reviewing relevant stablecoin bills such as the Clarity for Payment Stablecoins Act and the Lummis-Gillibrand Payment Stablecoins Act. In the past two months, more and more crypto project parties and crypto trading platforms have announced that their previous lawsuits with the SEC have been withdrawn, and a friendly regulatory framework is likely to be brought in a friendly regulatory environment. The adoption of the crypto regulatory framework and the stablecoin bill will bring more regulatory clarity and certainty, providing conditions for traditional financial institutions that are already "drooling" to enter the crypto market and compete directly with stablecoin issuers such as Tether, which are making a lot of money, bringing more funds and liquidity.

Ethereum is the key to the altcoin bull run

In late January, Paradigm wrote an article calling on Ethereum core developers to speed up protocol upgrades and achieve more milestones on its technical roadmap to maintain its leading position as the leading Layer 1 blockchain. The Ethereum ecosystem has the greatest momentum in the crypto space, especially the advancement of Web3 applications. In short, "there are many people and projects that really do things", and this is the source of unlimited expectations.

So many times when Ethereum comes together, most of the DeFi and other related ecosystems are collectively pulled up, and the competing public chains also get the effect of rising tides. Therefore, Ethereum is very important for the overall bull market. Ethereum seems to have made some moves, and there will surely be variables in 2025: 1) The transformation of the Ethereum Foundation At present, we have seen that the Ethereum Foundation is increasing its investment in DeFi and making personnel adjustments to maintain its position as the leading Layer1 blockchain. Of course, transformation is a good thing, but the crypto ecosystem cannot rely entirely on the Ethereum Foundation. Ethereum is not a company, and the Foundation is just an auxiliary organization. It can only assist the growth of the ecosystem at most, and cannot control this decentralized ecosystem. 2) Speed up the upgrade Recently, some developers in the Ethereum community have stated in several related Ethereum developer conferences and other occasions that they will speed up matters such as protocol upgrades. Ethereum's main upgrade in 2025, Pectra, will be launched on the mainnet in April. This upgrade may be the largest upgrade in history, including up to 20 Ethereum Improvement Proposals (EIPs), such as EIP-3074 to improve transaction efficiency and EIP-7002 to optimize verification node operations. The next upgrade, Fusaka, will complete the scope confirmation on April 10. Every time Ethereum is significantly upgraded, it will bring good expectations before and after the implementation. What will happen this time? Previously, some analysts believed that the current risk-return ratio of Ethereum is high, and it is stagnant compared with some leading projects. Once new progress or changes are made, it is likely to reverse the downward trend.

summary

The potential positives for this year are still there, and the possibility of Bitcoin hitting 100,000+ again this year is still not low, but the variables cannot be ignored. It can only be said that the probability of strategic reserves landing is higher, and the expectation of interest rate cuts is still difficult to say. There are no major problems with the regulatory framework and related bills, and the transformation and upgrade of Ethereum will also be a positive. In general, it is still worth looking forward to.