Bitcoin (BTC +0.02%) may have hit a new all-time high of $112,000 in May, but it's not out of the woods quite yet. Already, Bitcoin has retreated back down to the $105,000 level, and there are some critics warning about a further decline in price.
While the long-term outlook for Bitcoin might be bullish, there could be quite a bit of uncertainty and volatility over the second half of 2025. Here are three key factors keeping the Bitcoin skeptics up at night.
Tariff and trade uncertainty
As long as tariffs continue to dominate the headlines, they will continue to have a direct impact on how investors view the crypto market. As a result, it's been a see-saw year for Bitcoin. After hitting an all-time high in January, Bitcoin dropped as low as $75,000 after President Donald Trump announced the new Liberation Day tariffs on April 2.
Bitcoin has subsequently recovered, but every week seems to bring some new twist or turn in the tariff debate. The newest factor is the worsening state of the trade negotiations involving the U.S. and China. At one time, it looked like some kind of trade deal might be worked out by mid-summer. Now, it looks like the two sides are further apart than ever.
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So how will Bitcoin investors react? If they view Bitcoin as a safe haven asset, they might move even more money into Bitcoin, thereby boosting its price. However, if they view Bitcoin as a risky and volatile digital asset, then they might sell off, just as they did in April.
Unfinished business in Washington
When President Trump came into office in January, the future looked very bright indeed for Bitcoin. New crypto legislation looked like it would be ready to sign soon, and crypto enthusiasts were excited about upcoming Bitcoin initiatives from the Trump White House.
However, five months into the presidency, and there's still a lot of unfinished business. Take the Strategic Bitcoin Reserve, for example. Yes, Trump signed an executive order for its creation in March, but it delivered much less punch than many people expected. Most importantly, the executive order failed to outline how the government planned to buy Bitcoin in the future. As a result, investors are still waiting on some form of legislation, such as the BITCOIN Act proposed by Sen. Cynthia Lummis (R-Wyo.), that will precisely outline a mechanism for buying more Bitcoin.
On top of all that, there are now questions swirling around the Trump family's connections to Bitcoin. At the very least, there appear to be potential conflicts of interest. For example, Donald Trump's media company -- Trump Media & Technology Group -- recently divulged plans to buy $2.5 billion worth of Bitcoin. And members of the Trump family now have interests in a variety of Bitcoin-related projects.
The four-year Bitcoin cycle
Historically, Bitcoin has followed a fairly predictable pattern of boom and bust. The four-year Bitcoin cycle starts with a period of quiet accumulation, followed by a period of rapid growth. This leads to a Bitcoin bubble filled with hype and speculation. After that comes the crash.
CRYPTO: BTC
Key Data Points
For example, the 2020-2021 rally that saw Bitcoin hit a (then) all-time high of $69,000 was quickly followed by a disastrous market crash that saw it lose 65% of its value in 2022. And the same pattern may be happening again. If history is any guide, then the final phase of the Bitcoin cycle could be arriving soon.
Thus, even if Bitcoin soars to $150,000 this year, it might have a hard time holding on to those gains heading into 2026. If you'd have waited until now to buy Bitcoin, you might be buying at or close to the top of the market. By the end of 2025, it might already be too late.
Only a 22% chance of failure?
The good news is that most Bitcoin investors are remarkably bullish these days. According to online prediction markets, Bitcoin only has a 22% chance of falling below the $70,000 price level, and only a 16% chance of falling below the $60,000 price level. Long gone are the days when people regularly prognosticated that Bitcoin could fall all the way to zero.
That being said, investors still need to be aware of the risks of investing in Bitcoin. The price of Bitcoin never goes straight up. It is highly volatile, filled with many peaks and valleys. If you don't have firm convictions about Bitcoin, it's remarkably easy to buy high and sell low.
When it comes to Bitcoin, it's best to keep a long-term perspective. Bitcoin has never been a tariff-proof, inflation-proof, or recession-proof asset. But over a long enough time horizon, it continues to be the top-performing asset in the world. The only catch is that you have to be willing to hold on to it, through good times and bad.
