The world’s oldest and most popular cryptocurrency has shown remarkable resilience at a time when market uncertainty has impacted speculative stocks. Here’s why Bitcoin (BTC) is going up in value.
Despite experiencing volatility in 2025, Bitcoin ended the first quarter nearly 90% higher than in the beginning of 2024, and many industry experts believe that the cryptocurrency will continue to rally as the year progresses.
Although wider stock market volatility has prompted crypto markets to become more vulnerable to price swings in recent months, Matt Hougan, chief investment officer at Bitwise Asset Management, has claimed that his company’s prediction that BTC would end 2025 at $200,000 is “still in play.”
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Adopting a more long-term view, Standard Chartered’s head of digital assets, Geoffrey Kendrick, has been even more bullish, forecasting that Bitcoin could reach a value of $500,000 over the next three years.
After a few months of turbulence, Bitcoin is back up around $90,800 as of press time on April 22, with a market capitalization around $1.8 trillion. The digital asset gained 6.7% in the past week, and is up from $86,409 over the past 24 hours. Though it’s still a ways from its all-time high of $109,115 hit on Jan. 20 of this year, it’s light years from its value of less than one cent in 2010.
But why is Bitcoin going up? And how high could the cryptocurrency go in the future? Let’s take a deeper look at the mechanisms at play that are causing BTC to rise in value:
— Halving events add scarcity.
— Institutional acceptance.
— Crypto-friendly president.
— Projected growth ahead.
Halving Events Add Scarcity
Unlike many other cryptocurrencies, Bitcoin features preprogrammed “halving events,” which are designed to reduce the pace at which new coins are created. This goes directly to Bitcoin’s famous scarcity: BTC’s supply will max out at 21 million coins.
A Bitcoin halving event is a deflationary mechanism designed to actively “halve” the Bitcoins distributed to those mining the cryptocurrency using CPU power. Halving events occur approximately every four years.
When Bitcoin was launched in 2009, miners would receive 50 BTC as a block reward. This has steadily halved throughout the years, and in 2024, the number of Bitcoins distributed to miners per block fell to 3.125.
Why do Bitcoin halving events increase the value of BTC? Because fewer Bitcoins are distributed to miners, there are lower volumes of the coin entering the market. It’s this mechanism that aids comparisons between Bitcoin and “digital gold” or other precious metals. The notion that the coin is a finite entity in the crypto landscape is a key reason why one Bitcoin is worth so much more than altcoins like Dogecoin, for instance.
What’s more, Bitcoin has historically embarked on price rallies in the months following a halving event, with the asset reaching new all-time high values around 12 to 18 months following each halving. This can be seen in the cryptocurrency’s stock to flow model (S2F), which charts the coin’s value relative to its halving events.
With Bitcoin’s most recent halving event occurring on April 20, 2024, the coin’s greater scarcity is a key contributing factor to its higher market rallies and bullish investor sentiment today. However, it’s also important to note that Bitcoin’s post-halving rallies have shown weaker trends in recent years, suggesting that other factors are helping to drive more positive price movements in 2025.
Institutional Acceptance
Bitcoin’s impressive growth since the beginning of 2024 is no coincidence. The past year has seen unprecedented levels of institutional acceptance of BTC and other cryptocurrencies that have undoubtedly contributed to their higher values.
The timely arrival of spot Bitcoin ETFs in January 2024 was a watershed moment for institutional acceptance for crypto, and 2024 saw 12 exchange-traded funds take in almost $36 billion in inflows, despite over $21 billion in outflows from the Grayscale Bitcoin Trust (ticker: GBTC), highlighting the sheer level of institutional interest in crypto throughout the year.
Of more than 730 ETFs launched throughout the past year, four of the top five by inflows were spot Bitcoin ETFs, while 10 of the 12 Bitcoin ETFs were in the top 50 new launches for 2024.
The European Union’s Markets in Crypto-Assets (MiCA) regulation, which arrived in June 2023, has been fully applicable since Dec. 30, 2024, offering a unified framework for EU nations and their handling of crypto assets.
This framework for transparency, disclosure, authorization and the supervision of transactions helps to provide greater institutional confidence in cryptocurrencies throughout the continent, promoting more widespread acceptance.
Additionally, Hong Kong and Singapore have improved institutional access to crypto assets with licensing for virtual asset service providers and tax benefits, respectively.
Crypto-Friendly President
U.S. President Donald Trump’s revamping of tariff policy has contributed to higher volatility throughout cryptocurrency markets in recent weeks; meanwhile, some investors have leaned into alternative assets such as cryptocurrencies and gold as trade wars, still-elevated interest rates and the threat of inflation have a tendency to roil the stock market. Many crypto enthusiasts remain bullish about digital currencies because of the president’s focus on deregulation and the appointment of crypto-friendly officials within his administration.
The Trump administration’s placement of Mark Uyeda as acting chair of the Securities and Exchange Commission has been welcomed by crypto investors, while other policies have also drawn bullish sentiment toward Bitcoin.
Trump repeatedly pledged on the campaign trail that his government would establish a “Strategic Bitcoin Reserve.” Although initial expectations were that the U.S. would buy high volumes of BTC each year to command a high percentage of the asset’s supply, the subsequent announcement of the reserve focused only on coins forfeited to the federal government as part of criminal or civil proceedings.
Although the reality of the Strategic Bitcoin Reserve didn’t quite match up to the promise, Trump’s crypto czar, David Sacks, likened the reserve to a “digital Fort Knox.” The stockpile is reportedly estimated at 200,000 BTC worth around $17 billion.
Investor confidence in Trump’s handling of cryptocurrencies like Bitcoin was a driving force behind BTC’s market rally in the fourth quarter of 2024, which saw growth of nearly 54% over the final three months of the year.
Projected Growth Ahead
Bitcoin’s built-in scarcity and halving events every four years mean that the cryptocurrency is designed to grow in value. As long as investors are willing to buy and hold crypto, BTC is likely to lead the pack due to its far lower levels of circulation.
As more institutional players wake up to the potential of Bitcoin, crypto enthusiasts believe that the coin will accelerate in value at a faster pace.
Although the wider market volatility of recent months has shown that it won’t always be smooth sailing for BTC, the original crypto has proven time and again that it has staying power.
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Why Is Bitcoin Going Up? originally appeared on usnews.com
