Cryptocurrencies have rebounded from their 2021 lows and Bitcoin prices (BTC) are back above $45,000 even though they remain well below their recent highs. There has been a rise in most cryptocurrencies amid renewed buying interest. What’s the 2025 forecast for Bitcoin and can the biggest cryptocurrency reach $1 million over the long term?
There has been a lot of volatility in Bitcoin and other cryptocurrencies in 2021. From China’s crackdown to Elon Musk’s flip-flops, cryptocurrencies have literally seen it all this year. The noises for greater regulatory oversight of cryptocurrencies are also gaining traction.
Bitcoin's long-term forecast
Many people see digital assets like Bitcoin as the future of finance. While there are skeptics like Warren Buffett and Nouriel Roubini, cryptocurrency adoption is increasing. Even U.S. lawmakers are trying to milk cryptocurrencies to at least partially pay for the infrastructure bill.
Cryptocurrencies could be among the biggest things to have happened in finance. There could be a tectonic shift from fiat currencies to digital assets. Another epoch change that we’re witnessing is from ICE (internal combustion engine) cars to electric cars. While the pivot from fiat currencies to cryptocurrencies is highly debatable, the pivot towards EVs (electric vehicles) is real.
Comparing cryptocurrencies and Tesla
I would draw an analogy between the cryptocurrency and EV market and equate Tesla with Bitcoin. Both the cryptocurrency and EV markets are getting overcrowded and there have been frauds. However, both Tesla and Bitcoin are leaders in the EV and cryptocurrency market.
Cryptocurrencies and Tesla command a quality premium and have a first-mover advantage. They're both synonymous with the industries that they represent and are gold standards. Every new EV company fancies itself as the next Tesla, while every cryptocurrency wants to beat Bitcoin. Some people think that both of these assets are overvalued, but there's a wide army of others who are in love with these assets.
Given the steep rise in both Tesla as well as Bitcoin, bulls seem to be winning the argument hands down so far.
Bitcoin's price prediction in 2025
Finder did a study of 42 cryptocurrency experts, which showed that the panel thinks that Bitcoin prices will rise to $318,417 by the end of 2025. This would mean a rally of about 600 percent. While it might seem high in absolute terms, such spikes are common in cryptocurrencies.
Will Bitcoin prices reach $1 million?
Many experts have been calling for Bitcoin prices to reach $1 million. Anthony Pompliano, the co-founder and partner at Morgan Creek Digital Assets, sees Bitcoin eventually becoming a global reserve currency and rising to $1 million even though he didn't specify a timeline for the price prediction. Ollie Leech, a CoinDesk learn editor, is among those who think that Bitcoin will hit $1 million.
Bitcoin $1 million price prediction
In 2017, Jim Cramer and Chamath Palihapitiya also predicted that Bitcoin could reach $1 million. Raoul Pal, the former Goldman Sachs hedge-fund manager, predicted in October 2020 that Bitcoin will rise to $1 million by 2025.
What factors could support the rise in Bitcoins?
The growing adoption of cryptocurrencies will help take Bitcoins higher. There's also a premium for Bitcoins since they are capped unlike some of the other cryptocurrencies. The massive and growing fiscal deficit in the U.S. as well as other major economies and the resultant central bank money printing will only increase the disenchantment with fiat currencies.
As more businesses warm up to cryptocurrencies, invest, and start accepting them as a payment mode, we could see continued upwards momentum in Bitcoin prices. However, since cryptocurrencies are an emerging and very risky asset class, it's always advisable to allocate only a small part of the portfolio towards them.