Author: Mu Mu
In recent times, the crypto market has faced severe correction pressure, but many early Bitcoin participants (OGs) still believe that the current bull market has not yet fully unfolded. Their reason is: although Bitcoin reached over $100,000 in early 2025, its performance was not as crazy as in the previous bull markets. Of course, predicting the future is a very difficult task, but there are four key points in 2025 that may be the main factors determining whether Bitcoin can reach $100,000 again and trigger a full-blown bull market...
Strategic Bitcoin Reserves
Discussions on governments viewing Bitcoin as a strategic asset are increasing. In 2024, US Senator Cynthia Lummis and former President Trump both proposed establishing a national digital asset reserve, and El Salvador has already made its Bitcoin reserves a national asset, while other countries like Germany and Japan are also discussing similar policies. However, ideals are abundant, but reality is harsh. The US, whether it's the federal strategic Bitcoin reserve pushed by Trump or the strategic reserves proposed by state government lawmakers, will face numerous obstacles. Even within the Republican Party that Trump belongs to, there are many differences, not to mention the Democratic Party. Recently, Trump has reiterated the strategic reserve on social media, and the upcoming crypto summit on March 7th has slightly boosted market confidence, at least showing his firm stance. Given the current situation, if Trump insists, the possibility of implementation is there, and even if it doesn't pass through Congress, he can bypass the resistance through executive orders and launch a mini version of the strategic Bitcoin reserve first. Of course, once the US strategic reserve is solidified, regardless of the size, it will be a milestone event, and countries and regions around the world will carefully consider whether to follow suit.
Interest Rate Cuts and Loose Monetary Policy
Ample liquidity is a prerequisite for a bull market, and there is still room for "interest rate cuts" this year. As of March 2025, the Federal Reserve has maintained interest rates between 4.25%-4.5%, and the market expects that interest rates may be cut later in 2025. Economists predict that if economic data is weak, the Federal Reserve may cut interest rates in May or July. Trump's imposition of tariffs on Canada, Mexico, and China in February 2025 triggered a trade war, which may bring huge pressure for an economic recession. This may also force the Federal Reserve to further cut interest rates to stimulate the economy. Research shows that Bitcoin prices are highly correlated with global M2 money supply growth, with a correlation coefficient of 0.94. Historical trends show that M2 growth usually drives Bitcoin price increases, especially when liquidity increases and interest rates decline. Crypto analyst Bitcoindata21 stated in a post on February 25th: "A weakening US dollar has a net positive impact on global M2, and it's only a matter of time before Bitcoin achieves this goal." A similar view also appeared in a post by Colin Talks Crypto, who said: "Global M2 money supply forecasts a major shift for Bitcoin."
Regulatory Framework and Stablecoin Legislation
In early 2025, the stablecoin market capitalization exceeded $200 billion, already attracting global regulatory attention. The EU has implemented the MiCA regulation in January 2025, and the US Congress is reviewing relevant stablecoin bills such as the Clarity for Payment Stablecoins Act and the Lummis-Gillibrand Payment Stablecoins Act. In the past two months, more and more crypto projects and crypto trading platforms have announced that their previous lawsuits with the SEC have been withdrawn, and a friendly regulatory environment will most likely lead to a friendly regulatory framework. The crypto regulatory framework and stablecoin legislation will bring more regulatory clarity and certainty, providing conditions for traditional financial institutions, who have long been "coveting", to enter the crypto market and directly compete with the hugely profitable Tether and other stablecoin issuers, bringing more capital and liquidity.
Ethereum is the Key to the Altcoin Bull Market
In late January, Paradigm published an article calling on Ethereum core developers to accelerate the pace of protocol upgrades and achieve more milestones on their technical roadmap to maintain its leading position as the top Layer1 blockchain. The Ethereum ecosystem has the strongest momentum in the crypto field, especially in the advancement of Web3 applications, in short, "the people and projects that really get things done", and this is the source of endless expectations.
So many times when Ethereum comes up, most of the DeFi and related ecosystems are collectively boosted, and competing public chains also experience the rising tide lifting all boats effect. Therefore, Ethereum is very important for a full-blown bull market. Ethereum seems to be making some moves, and 2025 will likely see some changes: 1) Transformation of the Ethereum Foundation. We have already seen the Ethereum Foundation increasing its investment in DeFi and making personnel adjustments, aiming to maintain its position as the leading Layer1 blockchain. Of course, transformation is a good thing, but the crypto ecosystem cannot rely entirely on the Ethereum Foundation, as Ethereum is not a company and the Foundation is only an auxiliary organization that can at most assist the ecosystem's growth, not control the decentralized ecosystem. 2) Accelerated Upgrades. Recently, some Ethereum community developers have stated in several related Ethereum developer meetings that they will accelerate the progress of protocol upgrades. Ethereum's major upgrade Pectra is scheduled to launch on the mainnet in April, and this upgrade may be the largest in Ethereum's history, containing up to 20 Ethereum Improvement Proposals (EIPs), such as EIP-3074 to improve transaction efficiency and EIP-7002 to optimize validator node operations. The next upgrade, Fusaka, will have its scope confirmed on April 10th. Each major Ethereum upgrade brings good expectations before and after the implementation, and how will it be this time? Previous analysts have believed that Ethereum's current risk-reward ratio is relatively high, and it may have lagged behind some top projects. Once it achieves new breakthroughs or transformations, it may be able to reverse the downward trend.
Summary
The potential bullish factors are still there this year, and the possibility of Bitcoin challenging $100,000+ again is still not low, but variables cannot be ignored either. It can only be said that the probability of the strategic reserve being implemented is a bit higher, the interest rate cut expectations are still hard to say, and there are no major issues with the regulatory framework and related legislation, and Ethereum's transformation and upgrades will also form a positive factor. Overall, it's still worth looking forward to.
