Bitcoin (BITCOIN +0.20%) surged in value after Donald Trump's election win back in November. But that momentum has slowed recently, and the popular cryptocurrency has struggled to climb above the $100,000 mark again and stay there. This could be a sign of some apprehension in the markets about Trump's prposed tariffs and their effect on the economy.
But a catalyst could be coming soon to generate some excitement and possibly lead to more buying. And that's the launch of a Bitcoin exchange-traded product (ETP) in Europe.
CRYPTO: BITCOIN
Key Data Points
BlackRock plans to launch Bitcoin ETP in Europe
According to a report from Bloomberg, top asset management firm BlackRock is looking at launching a Bitcoin ETP in Europe soon. It would be the first European crypto ETP, and it could lead to many more such ETPs. Something like that happened in the U.S. last year when many Bitcoin exchange-traded funds (ETFs) launched after the Securities and Exchange Commission (SEC) gave its approval.
ETFs and ETPs are slightly different, but ultimately they both give crypto investors an easy way to gain exposure to Bitcoin. And the important takeaway is that this could be a huge opportunity for the European markets. The launch of Bitcoin ETFs in the U.S. helped spark a crypto rally last year. Something similar could happen in Europe.
More catalysts could be coming
The value of Bitcoin largely depends on retail sentiment and how optimistic investors are that crypto will become widely used. That makes it hard to predict Bitcoin's price at any given point in the future. But positive crypto-related news can help fuel investor excitement.
Trump has been bullish on crypto, and under his administration, the SEC has launched a crypto task force "dedicated to developing a comprehensive and clear regulatory framework for crypto assets," the agency said in a statement. If more clarity is the result and gives crypto greater legitimacy, it could be another catalyst this year. Improved regulation could bring in more investors and also add stability.
Is now the time to buy Bitcoin?
But it might not be all smooth sailing for crypto in 2025. The impact of tariffs, trade wars, and lingering inflation might weigh on the economy. Bitcoin has done well when economic conditions are strong, but when interest rates began to rise in 2022 and the economy wasn't looking so great, the value of Bitcoin plunged.
Economic uncertainty might derail Bitcoin this year. But the good news might be enough to mitigate the worst of it.
For investors who remain bullish on crypto and are willing to hang on through the uncertainty, the current slowdown may be an opportunity to build up a small position in Bitcoin. But don't be surprised if 2025 turns out to be a volatile year.
