Bitcoin‘s (CRYPTO: BTC) value has greater than doubled over the previous 12 months, and it now trades just some share factors shy of its all-time excessive of almost $123,000. Buyers could be reluctant to purchase extra Bitcoin after these huge positive factors, nevertheless it might nonetheless be a wise place to park $1,000.
5 principal catalysts drove Bitcoin’s value greater in 2024 and 2025: its spot value exchange-traded funds (ETFs), its newest halving, decrease rates of interest, extra crypto-friendly authorities insurance policies, and large purchases from institutional buyers, firms, and full international locations.
Picture supply: Getty Photos.
Final January, the Securities and Trade Fee (SEC) accredited the first spot value ETFs for Bitcoin. These new ETFs made it simpler for retail and institutional buyers to spend money on Bitcoin by their brokerage accounts as an alternative of holding the tokens in a digital pockets. Additionally they supported the notion that it was a commodity like gold or silver.
Final April, Bitcoin underwent its latest halving, which lower its mining rewards in half. That course of happens each 4 years and makes it more and more tough to mine Bitcoin for a revenue. Some 19.9 million of Bitcoin’s most provide of 21 million tokens have already been mined, and these scheduled halvings decelerate that course of, so the last token cannot be mined till 2140. That programmed shortage additionally makes it extra comparable to a bodily commodity like gold than different cryptocurrencies.
As the Fed lower its benchmark charges thrice in 2024, extra buyers pivoted again towards cryptocurrencies, high-growth shares, and different speculative investments. Decrease charges additionally eroded the worth of the U.S. greenback, which elevated the attraction of Bitcoin (and different commodities) as a hedge towards the greenback’s devaluation.
In the U.S., Bitcoin and different cryptocurrencies confronted an unsure future below the Biden administration. Nonetheless, most of these storm clouds dissipated after the Trump administration took over and adopted a extra relaxed strategy towards regulating cryptocurrencies.
All of these catalysts drove huge institutional buyers like BlackRock(NYSE: BLK), tech firms like Technique(NASDAQ: MSTR), and international locations like El Salvador to accumulate extra Bitcoin. The U.S. additionally just lately established its personal Strategic Bitcoin Reserve. That assist signifies that Bitcoin will not fizzle out anytime quickly.
All of these tailwinds ought to speed up over the subsequent few years. Decrease rates of interest and crypto-friendly insurance policies ought to heat up the broader crypto market, which might then drive institutional buyers to allocate greater percentages of their portfolios to Bitcoin ETFs. As that occurs, Bitcoin might change into extra interesting as a hedge towards inflation and foreign money devaluation points, whereas its subsequent halving in 2028 will additional enhance its shortage. Previous efficiency by no means ensures future positive factors, nevertheless it’s value noting that Bitcoin’s value rallied greater in every of the years following its earlier 4 halvings.
Halving Date
Value at the Time of Halving
Following Yr’s Peak Value
Achieve
2012
$13
$1,152
8,762%
2016
$664
$17,760
2,575%
2020
$9,734
$67,549
594%
2024
$64,262
$122,980*
91%*
Knowledge supply: Bitpay. *As of Aug. 5, 2025.
Though Bitcoin’s post-halving positive factors are slowing down, it might nonetheless have a lot of room to run earlier than it peaks. It is already the world’s most useful cryptocurrency with a market cap of $2.2 trillion, however that is merely a sliver of gold’s market cap of $23.1 trillion. So in the event you anticipate Bitcoin to finally change into “digital gold,” then its value might probably climb tenfold and propel its market cap to $22 trillion. That is why some of its most bullish buyers, together with Ark Make investments’s Cathie Wooden, anticipate its value to prime $1 million by the finish of the decade. I would take that outlook with a grain of salt, nevertheless it could be good to make investments $1,000 in Bitcoin and easily go away it alone for a couple of years.
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Leo Sun has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Bitcoin. The Motley Idiot has a disclosure policy.
