Bitcoin, the leading cryptocurrency, has experienced a significant price drop, plunging nearly 20% year to date. This decline has erased its gains following the 2024 presidential election victory of Donald Trump on November 5. Experts are analyzing the factors behind Bitcoin’s current struggles and pondering its potential to rebound to $100,000 later this year.
Previously, Bitcoin had faced setbacks during 2022 and 2023, when rising interest rates drove investors toward safer investment options. However, a recovery was observed in 2024 and 2025, attributed to the approval of the first spot-price exchange-traded funds (ETFs), the recent halving event—which reduces mining rewards—and a series of interest rate cuts by the Federal Reserve. During this period, Bitcoin also gained traction as legal tender in several countries, saw an influx of institutional investments in its new ETFs, and witnessed growing interest in “Bitcoin Treasuries.”
Despite this growth narrative, 2024 has presented fewer immediate catalysts for Bitcoin. Uncertainty surrounds whether the Federal Reserve will persist with aggressive rate cuts. Trump’s nomination of Kevin Warsh, known for previously favoring rate hikes, as the next Fed Chair introduces additional ambiguity. Although Warsh has aligned himself with the Trump administration’s push for lower rates, the exact direction he will take upon assuming office remains to be seen.
As a result of this uncertainty, many investors are cashing in on their Bitcoin profits and shifting towards more stable assets like gold and silver. The price decline has also triggered leveraged liquidations, exacerbating the downward pressure on Bitcoin. Currently, Bitcoin’s price stands at approximately $73,615 with a market cap of $1.5 trillion and a notable trading volume of $74 billion.
Despite the current scenario, there are reasons to believe that Bitcoin could bounce back to its previous heights. One potential catalyst is Warsh adopting a dovish approach regarding inflation, leading to aggressive interest rate cuts. This could weaken the U.S. dollar, prompting a shift towards riskier assets like Bitcoin as investors seek a hedge against inflation.
Another promising development is the recent drafting of a comprehensive regulatory framework for the cryptocurrency market by U.S. senators. If this legislation is enacted, it would delineate which cryptocurrencies are classified as commodities, transferring regulatory oversight from the Securities and Exchange Commission (SEC) to the more crypto-friendly Commodity Futures Trading Commission (CFTC). Such regulatory clarity could entice more institutional investors to enhance their Bitcoin holdings through spot-price ETFs.
As Bitcoin’s price begins to recover, it is likely to spark renewed interest among investors, with the fear of missing out (FOMO) potentially driving its value beyond the $100,000 mark once again.
