As soon as new global tariffs were announced on April 2, Bitcoin (BTC 7.58%) started to head lower. It now trades under $80,000. That price level would have been unthinkable just two months ago. On Jan. 20, Bitcoin traded at an all-time high of $109,000.
Here’s the good news — a surprising number of investors are still relatively confident about Bitcoin’s prospects in 2025. Based on data from the Kalshi online prediction market, 35% of investors think Bitcoin could hit $125,000 this year, and 16% think it’s still on the path to $150,000. What will it take for Bitcoin to hit those lofty price targets?
“Old” catalysts for Bitcoin
To make this problem as easy to solve as possible, I’ve mentally divided Bitcoin’s catalysts into two categories: “old” and “new.” The “old” catalysts are those that existed from Election Day to Inauguration Day. The “new” catalysts are those that could emerge in the wake of the new tariff regime.
The 35% of investors who think Bitcoin could still hit $125,000 this year are likely still relying on the old catalysts to make it happen. These old catalysts were perfectly summarized by investment firm Bernstein, which predicted in January that Bitcoin would hit $200,000 by the end of 2025.
This scenario assumes that we are in the so-called “Infinity Age” of crypto. This implies more mainstream acceptance of Bitcoin and its greater integration into the global financial system. It calls for accelerated inflows into the spot Bitcoin ETFs. It hints that more corporations could follow the MicroStrategy (now known as Strategy) (NASDAQ: MSTR) model of adding Bitcoin to their balance sheets. And it even suggests that AI and crypto might come together in wonderful new ways, leading to advancements in Bitcoin mining.
Indeed, everything seemed to be heading in the right direction. There was a Crypto Summit at the White House in March, and the Trump administration announced the creation of a Strategic Bitcoin Reserve. At the same time, all the old regulatory shackles that might have held Bitcoin back seemed to be coming off.
However, the market volatility that has resulted from the new tariff regime seems to be putting all these old catalysts at risk. If the Trump White House is negotiating simultaneously with 50 different nations about their tariffs and trying to keep the global financial system from going down in flames, do you really think it’s going to be focused on new Bitcoin initiatives?
“New” catalysts for Bitcoin
We’ll likely need a new set of catalysts for Bitcoin to soar higher this year. Quite simply, the market has already priced in all the old catalysts.
One scenario that could send Bitcoin higher is if investors embrace Bitcoin as a “safe haven” asset during these volatile times. At a time when asset prices are crashing around the world and tariffs are ratcheting higher, investors might decide to “bear-proof” their portfolios by loading up on Bitcoin as a form of “digital gold.” If so, there could be record inflows into the spot Bitcoin ETFs, pushing up the price of Bitcoin.
Of course, there will always be skepticism about Bitcoin being a long-term store of value. At least physical gold is tangible. In a worst-case scenario, you could trade your gold bars for items of value. But what do you do with a completely virtual asset that exists solely in the form of 1s and 0s?
Image source: Getty Images.
The other potential catalyst involves China. This one is a definite long shot, and involves China lifting its ban on Bitcoin. Since 2021, crypto mining and trading have been banned in China. But what if China reverses that ban? What if more than 1 billion people were suddenly allowed to buy and hold Bitcoin?
Right now, online prediction markets give this a 2% chance of happening by June 30. That’s small, but not insignificant. If the trade war between the U.S. and China continues to escalate, China might ditch dollar-denominated assets and go with Bitcoin instead. Remember: There are already spot Bitcoin ETFs trading in Hong Kong.
Where is Bitcoin headed next?
If Bitcoin can find the right catalysts, it still has a chance of turning things around and soaring back above $100,000. Maybe it could even trade as high as $125,000, as nearly one-third of investors are now predicting.
But if you’re still counting on pro-crypto euphoria to send Bitcoin higher this year, you might be relying on an outdated mental model that no longer accurately reflects the current economic reality. It’s time to update that model with tariffs.
