- Bitcoin ETFs: the game changer
- Bitcoin price prediction
Bitcoin remains a central focus in both institutional finance and retail trading, but its volatility and macro sensitivity continue to shape its outlook. Since 2020, Bitcoin has been nearly four times as volatile as major stock indices, underlining the risks it poses even as traditional financial players start to embrace it.
While new U.S. legislation like the GENIUS Act aims to stabilize the digital asset market, such moves don’t make the overall crypto market any less volatile. In fact, they may amplify risk, given how interconnected crypto and traditional markets have become.
Despite narratives that portray Bitcoin as a hedge, it has proven to be a high-beta asset, meaning it moves more aggressively in the same direction as the broader stock market. When the Federal Reserve hikes interest rates to combat inflation, Bitcoin often suffers as liquidity dries up and investors flock to safer assets like government bonds.
Conversely, rate cuts or even speculation of monetary easing typically trigger sharp rallies, as risk appetite returns and capital flows back into speculative assets like crypto.
Bitcoin ETFs: the game changer
The approval of spot Bitcoin ETFs in January 2024 was a landmark event, triggering a massive influx of institutional capital. These ETFs offered traditional investors a compliant, low-friction way to gain exposure to Bitcoin.
As institutions like BlackRock and Fidelity began buying Bitcoin to back their ETF products, demand surged, reinforcing a bullish feedback loop: rising prices attract more ETF buyers, which in turn pushes prices even higher.
The institutional pivot has also changed Bitcoin’s market profile. Financial heavyweights are now building robust infrastructure around Bitcoin, from custody services to derivatives platforms. Even past skeptics like BlackRock CEO Larry Fink have publicly embraced the asset.
Bitcoin price prediction
This shift marks a maturation of Bitcoin as an investable asset, though it doesn’t eliminate volatility, especially during historically weak months like August. August has often been one of Bitcoin’s worst-performing months, with median losses of -8.3% and steep historical declines in 2011, 2014, and 2015.
Yet, bullish long-term forecasts remain strong. Analysts like PlanB, known for the stock-to-flow (S2F) model, argue that Bitcoin is deeply undervalued compared to gold. With Bitcoin’s S2F ratio at approximately 120 (double that of gold), PlanB suggests BTC could be worth over $1.18 million.
Meanwhile, Bitwise CIO Matt Hougan predicts Bitcoin could reach $200,000 by the end of 2025, citing rising institutional demand.
Bitcoin evangelist Jeremie Davinci goes even further, projecting a price of $500,000 and urging long-term holders to borrow against their BTC rather than sell it.
From a technical perspective, Bitcoin is currently trading just above key support at $117,888. If that level breaks, traders are watching $117,500 as the next likely test.
On the upside, a weekly close well above $119,482 could reaffirm bullish momentum. But failure to hold these levels could open the door to a decline toward $112,000.