As Bitcoin reaches $98,000, Yuya Hasegawa, an analyst at Japanese cryptocurrency exchange Bitbank, identified three main factors that could shape the crypto market in 2025: the Trump administration's cryptocurrency policy, the Fed's monetary policy, and the growing debt burden of the US government.
Trump Administration's Cryptocurrency Policy
The direction of cryptocurrency policy under the Trump administration is expected to dominate market sentiment in 2025. Proposals such as a strategic Bitcoin reserve plan and the appointment of pro-crypto officials are likely to have a direct impact on the price trends of major cryptocurrencies such as Bitcoin, XRP, and Dogecoin. Market participants are closely following updates on these developments, which could determine whether the U.S. will take a more positive stance on crypto adoption.
FED Monetary Policy
The Fed’s monetary policy continues to be a major factor influencing Bitcoin prices. Historically, loose monetary policies have supported Bitcoin’s growth, while tighter policies have put downward pressure. Despite a 100 basis point rate cut this year, the Trump administration’s proposed tariffs of 10%-20% on imported goods and up to 60% on Chinese imports could increase inflationary pressures. This scenario could force the Fed to maintain higher interest rates, potentially impacting Bitcoin’s appeal as an inflation hedge.
US Government Debt and the Safe Haven Appeal of Bitcoin
The US government debt crisis is emerging as a new focal point for markets. Hasegawa notes that higher interest rates will significantly increase the government debt burden. If concerns about debt sustainability grow, especially if the strategic Bitcoin reserve plan is implemented, Bitcoin’s reputation as “digital gold” could grow. Such a move could strengthen Bitcoin’s safe haven status and further boost its value.
*This is not investment advice.
