Both from a political, as well as an economic perspective, the markets could start turning up through Spring and into Summer. This article analyses three factors, from each of the perspectives, that could point to the next Bitcoin surge.
With the markets still exhibiting sentiment that keeps them firmly in the grip of fear, a general market surge is probably not uppermost in the minds of most investors. However, the market teaches one to be a contrarian, and it’s at times like this, before the herd realises that things are turning, that are potentially the best to start laying down positions.
Political tailwinds
1. A Trump administration that is 100% behind a crypto resurgence.
President Trump, and most of his cabinet, are firmly in favour of Bitcoin/crypto, and what they see as a new and innovative asset class. From setting up a Strategic Bitcoin Reserve, to discussing ways of regularly purchasing BTC, the U.S. government appears to be fully on board the crypto train.
2. Regulatory backing
It only seems like yesterday when the SEC Chairman was a certain Gary Gensler, who did the Biden administration bidding by embroiling crypto in red tape, prohibitions, and enforcement threats, that kept this industry repressed for the four years of Biden’s government. New SEC Chairman Paul Atkins is a breath of fresh air, and will look to encourage crypto innovation, and develop fair and encouraging regulation for the sector.
3. Global policy momentum
It’s not just in the U.S. where favourable policy is stimulating the growth of Bitcoin. A plethora of countries are now either pushing for their own reserves, or they are developing Bitcoin mining facilities in order to compete for a dwindling hard asset.
Now it can be seen that the U.S. really means business as regards maintaining its status as the premier nation holding Bitcoin, just about every country in the world will more or less be forced into taking their own positions. Anti-Bitcoin blocs, such as the European Union, will either quickly change direction, or become an impotent bystander as game theory plays out.
Economic tailwinds
1. Federal Reserve rate cuts
Following the last FOMC meeting, there are 2 quarter point rate cuts for the rest of 2025, with the first of these to probably come around June or July. These will mean more liquidity should flow into risk assets such as Bitcoin.
2. Quantitative tightening running down
The Fed also announced at FOMC that the amount of treasuries allowed to mature and not be replaced will come down to $5 billion from the previous $25 billion. Quantitative tightening is all but finished, and this can pave the way for quantitative easing (QE).
3. Weakening U.S. dollar
The potential pivot to QE, which could take place towards the end of 2025, would lead to a weaker dollar, due to the potentially vast amount of money printing that will need to occur. Bitcoin is that hedge against the coming devaluation of not just the U.S. dollar, but of all fiat currencies.
A monetary turning point has been reached
Huge monetary shifts are in the process of taking place. Many decades of the fiat currency experiment will not come to a halt quickly. Some seismic tremors will likely be felt first. However, one thing is certain; fiat currencies will need to be printed at an accelerating rate in order to cope with global debt. As this happens, and the more that debasement of fiat currencies occurs, there will be a flight to hard assets – and there is nothing harder than Bitcoin.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
