Author: Mu Mu
In recent times, the cryptocurrency market has faced severe correction pressure, but many early Bitcoin participants (OGs) still believe that the current bull market has not yet fully unfolded. Their reason is that although Bitcoin reached over $100,000 in early 2025, its performance was not as crazy as in the previous bull markets. Of course, predicting the future is a difficult task, but there are four key points in 2025 that may be the main factors determining whether Bitcoin can reach over $100,000 again and trigger a full-blown bull market...
Strategic Bitcoin Reserves
Discussions on governments viewing Bitcoin as a strategic asset have been increasing. In 2024, US Senator Cynthia Lummis and former President Trump proposed establishing a national digital asset reserve, and El Salvador has already incorporated its Bitcoin reserves as a national asset, while countries like Germany and Japan are also discussing similar policies. However, the ideal is rosy, and the reality is harsh. The US will face numerous obstacles, whether it's the federal strategic Bitcoin reserve pushed by Trump or the strategic reserves proposed by state government legislators. Even within the Republican Party, where Trump belongs, there are many divisions, not to mention the Democrats. Recently, Trump has reiterated the strategic reserve on social media, and the upcoming crypto summit on March 7th has slightly boosted market confidence, at least showing his firm stance. Given the current situation, if Trump persists, the possibility of implementation exists. Even if it doesn't pass through Congress, he can bypass the resistance through executive orders and launch a mini version of the strategic Bitcoin reserve. Once the US strategic reserve is solidified, regardless of its size, it will be a milestone event, and countries and regions around the world will carefully consider whether to follow suit.
Interest Rate Cuts and Loose Monetary Policy
Ample liquidity is a prerequisite for a bull market, and there is still room for "interest rate cuts" this year. As of March 2025, the Federal Reserve is maintaining interest rates between 4.25%-4.5%, and the market expects that they may cut rates later in 2025. Economists predict that if economic data is weak, the Federal Reserve may cut rates in May or July. In February 2025, Trump imposed tariffs on Canada, Mexico, and China, triggering a trade war that could put enormous pressure on the economy. This may also force the Federal Reserve to further cut rates to stimulate the economy. Research shows that Bitcoin prices are highly correlated with the growth of global M2 money supply, with a correlation coefficient of 0.94. Historical trends indicate that M2 growth usually drives Bitcoin price increases, especially when liquidity increases and interest rates decline. Cryptocurrency analyst Bitcoindata21 stated in a post on February 25th: "A weak US dollar has a net positive impact on global M2, and it's only a matter of time before Bitcoin achieves this goal." A similar view also appeared in a post by Colin Talks Crypto, who stated: "The global M2 money supply forecast predicts a significant change for Bitcoin."
Regulatory Framework and Stablecoin Legislation
In early 2025, the stablecoin market capitalization exceeded $200 billion, already attracting global regulatory attention. The European Union implemented the MiCA regulation in January 2025, and the US Congress is currently reviewing stablecoin-related bills such as the Clarity for Payment Stablecoins Act and the Lummis-Gillibrand Payment Stablecoins Act. In the past two months, an increasing number of crypto projects and exchanges have announced that their previous lawsuits with the SEC have been withdrawn, and a friendly regulatory environment will most likely lead to a friendly regulatory framework. The establishment of a crypto regulatory framework and stablecoin legislation will bring more regulatory clarity and certainty, providing the conditions for traditional financial institutions, who have long been "coveting", to enter the crypto market and directly compete with the hugely profitable Tether and other stablecoin issuers, bringing more capital and liquidity.
Ethereum is the Key to the Altcoin Bull Market
In late January, Paradigm published an article calling on Ethereum core developers to accelerate the pace of protocol upgrades and achieve more milestones in their technical roadmap to maintain its leading position as the top Layer1 blockchain. The Ethereum ecosystem has the strongest momentum in the crypto field, especially in the advancement of Web3 applications. In short, "the people and projects that really get things done" are the source of endless expectations.
So many times when Ethereum comes up, most of the related ecosystems like DeFi collectively rise, and competing public chains also experience the rising tide lifting all boats effect. Therefore, Ethereum is very important for a full-blown bull market. Ethereum seems to be taking action, and 2025 will likely see changes: 1) Transformation of the Ethereum Foundation - We have already seen the Ethereum Foundation 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, as Ethereum is not a company, and the Foundation is only an auxiliary organization that can at most assist the ecosystem's growth, not control the decentralized ecosystem. 2) Accelerated Upgrades - Some Ethereum community developers have recently stated in several Ethereum developer meetings that they will accelerate protocol upgrades. Ethereum's major upgrade, Pectra, will be launched on the mainnet in April, and this upgrade may be the largest in Ethereum's history, containing up to 20 Ethereum Improvement Proposals (EIPs), such as EIP-3074 to improve transaction efficiency and EIP-7002 to optimize validator node operations. The next upgrade, Fusaka, will have its scope confirmed on April 10th. Each major Ethereum upgrade brings good expectations before and after implementation, and how will it be this time? Previous analysts have suggested that Ethereum's current risk-reward ratio is relatively high, and it may be lagging behind some top projects. Once it achieves new breakthroughs or transformations, it may be able to reverse the downward trend.
Summary
The potential positives are still there this year, and the possibility of Bitcoin challenging $100,000+ again is still not low, but there are also variables that cannot be ignored. It can only be said that the probability of the strategic reserve being implemented is a bit higher, the expectation of rate cuts is still difficult to say, and there are no major issues with the regulatory framework and related legislation, and the transformation and upgrades of Ethereum will also form a positive. Overall, it's still worth looking forward to.
