BTC Rally Incoming? Bitcoin Faces $612 Billion Liquidity Surge in Q1 2025
Bitcoin is positioned for a transformative first quarter in 2025, with analysts forecasting a potential BTC rally driven by an influx of $612 billion in new liquidity into the US Treasury.
This development could provide a much-needed counterbalance to investor concerns surrounding delayed crypto regulations under the incoming Trump administration.
Bitcoin Falls Below $100K Amid Holiday Market Slowdown
As of 8:00 am UTC on Jan. 8, Bitcoin’s price experienced a significant dip, falling nearly 6% within 24 hours to trade below the $100,000 mark. The psychological resistance at $100,000 has persisted since mid-December, reflecting investor caution during the holiday season.
While this pullback has raised concerns among traders, the upcoming inauguration of President-elect Donald Trump on Jan. 20 is fueling optimism in the cryptocurrency sector of a BTC rally. Trump’s pro-business and pro-crypto platform has created expectations for favorable regulatory reforms, but delays in their implementation could pose short-term challenges.
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Arthur Hayes Highlights Liquidity Boom
Arthur Hayes, co-founder of BitMEX, predicts that the US Treasury’s injection of $612 billion in new liquidity by March 2025 could act as a powerful tailwind for Bitcoin, leading to a BTC rally. In a blog post dated Jan. 7, Hayes noted that increased dollar liquidity might offset disappointment over lagging regulatory advancements:
“A letdown by team Trump on his proposed pro-crypto and pro-business legislation can be covered by an extremely positive dollar liquidity environment.”
Hayes forecasts a local top for Bitcoin in March 2025, coinciding with the liquidity peak. However, he also cautioned about a potential correction driven by market realization that substantive regulatory changes may take longer than expected under the Trump administration.
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Institutional Optimism and BTC Rally Predictions
Institutional investors, often key drivers of Bitcoin price action, are expected to reenter the market in early 2025 after a seasonal holiday lull. Binance Research anticipates that this “liquidity boost” could help Bitcoin reclaim the $100,000 level ahead of Trump’s inauguration. However, sustaining these gains will require a combination of favorable macroeconomic conditions and tangible regulatory progress.
Some analysts are even more bullish, projecting a cycle peak above $150,000 by late 2025. This optimism is underpinned by a potential $20 trillion increase in the global money supply, which could drive as much as $2 trillion of fresh investment into Bitcoin.
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KULR Technology Group, a New York Stock Exchange-listed firm, recently doubled down on its bullish outlook, predicting a $200,000 Bitcoin price in 2025. The company disclosed a strategic purchase at $97,000, signaling confidence in the long-term trajectory of digital assets.
Can Bitcoin Reclaim $100K?
The road to recapturing $100,000 will likely depend on multiple factors, including institutional participation, Federal Reserve policy, and the pace of regulatory implementation under Trump. While optimism around Trump’s inauguration may provide a short-term boost, the market will closely monitor developments in crypto policy to gauge Bitcoin’s sustained potential.
The broader outlook for 2025 remains positive, with Bitcoin poised to benefit from macroeconomic tailwinds and increasing institutional adoption. If liquidity conditions align as anticipated, Bitcoin could mark a historic rally, with milestones such as $150,000 or even $200,000 within reach by the year’s end.
