Bitcoin could move back towards its highs next year, thanks to easier financial conditions, a weaker US dollar and persistent exchange-traded fund inflows, market experts say.
One important factor in the short term is US dollar liquidity and the outlook for US interest rates, says Carsten Menke, head of next-generation research at Swiss private bank Julius Baer.
“Bitcoin typically does well in times of ample liquidity, to which lower US interest rates are adding," he says. "It typically also benefits from periods of US dollar weakness, considering that it is designed as ‘anti-US dollar’.
“A second important factor is the interaction of supply and demand. Supply is constrained by the blockchain, and during the past two years has not been sufficient to meet the demand from spot Bitcoin ETFs and digital asset treasury companies. Furthermore, we have seen increasing accumulation of Bitcoin by long-term holders, which has aggravated the supply squeeze.”
Mohanad Yakout, senior market analyst at broker Scope Market, says if the US dollar weakens in tandem with Federal Reserve rate cuts, it would reduce real yields across traditional fixed-income markets. In a context of declining confidence in fiat purchasing power, investors may increasingly seek “scarce assets”.
Bitcoin’s fixed supply positions it as a “digital alternative to gold”, particularly when bonds fail to provide adequate inflation-adjusted returns, he explains.
The world’s largest cryptocurrency is down about 30 per cent from its October value and on track for its worst quarterly performance since the second quarter of 2022, when the collapse of TerraUSD and Three Arrows Capital rocked the industry.
After spending much of early 2025 trading like a risk-on asset, the token has failed to join the year-end rally. It is down more than 7 per cent for the year and was trading at $89,008 at 10:40am UAE time on Friday.
Other factors
ETF flow durability is among other important factors set to shape Bitcoin prices next year. Were 2024 and 2025 a one-off adoption burst or the start of steady allocation behaviour through advisers and model portfolios, asks Tony Hallside, chief executive at brokerage firm STP Partners.
“Policy tone and market-structure clarity in the US also matter,” he says. "Not headlines, but whether the rules of the road become clearer for custody, exchanges and capital formation.
“Leverage and derivatives positioning are also key. Cycles often break when leverage is crowded and liquidation mechanics take over. Post-halving supply dynamics also matter. The market has to absorb a smaller issuance stream, which is supportive in uptrends but does not prevent drawdowns when demand weakens.”
A recession can hit risk assets first, including Bitcoin, but if it triggers fast and meaningful easing and liquidity support, that pivot can restart speculative cycles, Mr Hallside believes.
Mr Yakout thinks participation from sovereign wealth funds and state-level entities could emerge as a meaningful source of demand for the digital asset.
If major economies explore or expand strategic Bitcoin reserves, the asset’s scarcity premium would likely strengthen. At the same time, integration into automated wealth management platforms may introduce “consistent, programmatic buying pressure”, replacing the highly reactive trading behaviour seen in earlier cycles, he explains.
Possible price range
Continued institutional adoption, regulatory stability and a manageable correlation with technology equities could lead to Bitcoin trading in an estimated range between $140,000 and $160,000, Mr Yakout forecasts.
“While the extreme gains of Bitcoin’s early years are unlikely to be repeated, the asset is still positioned to outperform traditional indices as it captures a growing share of capital historically allocated to gold and other stores of value."
In a more bullish scenario, prices could rise as high as $150,000, Mr Menke from Julius Baer predicts. A bearish scenario could lead to prices dropping back below $80,000, potentially reflecting a longer-lasting, risk-off move in equity markets, he says.
Unexpected interest rate increases in the US paired with a stronger dollar would also create a bearish scenario for Bitcoin, Mr Menke adds.
Previous peaks
Bitcoin’s major price peaks have progressed from niche, technically driven events into globally relevant macroeconomic moments, experts say.
“The 2013 peak reflected early retail discovery and the dominance of Mt Gox as the primary trading venue,” Mr Yakout says. "In 2017, prices were driven by the initial coin offerings boom and intense mainstream media attention.
“By 2021, the narrative shifted towards institutional participation, supported by companies such as Tesla and MicroStrategy and amplified by unprecedented global liquidity following pandemic stimulus. The 2024/2025 peak was largely shaped by structural developments, most notably the approval of US spot Bitcoin ETFs in January 2024 and the April 2024 halving, which reinforced Bitcoin’s scarcity narrative.”
The year 2017 featured the launch of the first futures contract, further fuelling the bullish mood.
Bitcoin’s 2013 cycle high was around $1,132 in November. In 2017, the peak came in mid-December at around $19,783, while in 2021 the cycle high was around $67,549 on November 8, Mr Hallside says.
Bitcoin crossed $100,000 on December 5, 2024 and later set a record around $126,223 in early October 2025.
Institutional vs retail investors
During the early cycles from 2013 to 2017, Bitcoin markets were dominated by retail early adopters, while institutions largely dismissed the asset as speculative and unproven, says Mr Yakout.
“This changed in the 2021 and 2024/25 cycles, as participation expanded to regulated financial institutions such as BlackRock and Fidelity," he says. "This shift increased market depth, reduced volatility relative to earlier cycles, and embedded Bitcoin within pension funds and corporate treasuries. As a result, Bitcoin increasingly functions as a recognised alternative asset rather than a fringe investment.
“Despite growing institutional influence, retail investors continue to play a decisive role near market peaks. Media coverage often amplifies price movements by creating a feedback loop: rising prices generate headlines, which attract new retail participants driven by fear of missing out. While institutional capital tends to stabilise prices and provide downside support, retail enthusiasm typically fuels the rapid, parabolic advances that characterise late-stage bull markets.”
Mr Menke points out that institutional adoption began only in 2024 when the spot Bitcoin ETFs were launched. Before then, institutional investors remained reluctant to gain exposure, in contrast to some specialised hedge funds, which had already entered the market during the 2017 bull market, he says.
Impact of regulations
Regulation has historically been a major source of downside risk for Bitcoin, with past market tops followed by corrections triggered by events such as China’s mining bans or aggressive regulatory enforcement, Mr Yakout from Scope Markets says.
In recent cycles, this dynamic has shifted. The approval of spot Bitcoin ETFs in the US provided regulatory validation and reduced uncertainty around access and custody, he says. As a result, regulation has moved from being a headwind to a relative tailwind, supporting market confidence and contributing to greater price stability, Mr Yakout adds.
Mr Hallside agrees and says the US spot ETF approvals were a “major psychological and practical breakpoint” because they signalled that “Bitcoin exposure could sit inside regulated investment wrappers”, which is how large pools of capital allocate.
