At the start of normal trading this week, Bitcoin (BTC -2.27%) had risen by 23% in 2025, outperforming the S&P 500, which has gained 13%. The economy has been doing well, and with more interest-rate cuts potentially on the horizon, there may be favorable conditions that help Bitcoin rise in value even more as the year goes on.
Could the digital currency reach yet another milestone this year and hit $200,000? Here's a look at how it has performed historically in the latter part of the year and whether now may be a good time to invest in Bitcoin.
Image source: Getty Images.
The fourth quarter has generally been good for Bitcoin
Bitcoin has historically been a volatile investment. Although crashes have occurred, the cryptocurrency's returns have been remarkably strong for investors who held on during the turbulence. During the past five years, it has risen by about 900%.
What's particularly striking is that the fourth quarter is typically the best, as the cryptocurrency averaged a return of more than 50% in the previous eight years.
| Year | Q1 Return | Q2 Return | Q3 Return | Q4 Return |
|---|---|---|---|---|
| 2024 | 68.69% | (14.69%) | 6.05% | 43.13% |
| 2023 | 72.27% | 7.02% | (11.50%) | 56.81% |
| 2022 | (1.48%) | (56.26%) | (2.45%) | (14.91%) |
| 2021 | 103.14% | (40.42%) | 25.00% | 5.52% |
| 2020 | (10.49%) | 42.26% | 17.99% | 168.50% |
| 2019 | 11.03% | 161.31% | (22.96%) | (13.52%) |
| 2018 | (50.10%) | (7.79%) | 3.62% | (43.92%) |
| 2017 | 10.95% | 137.65% | 73.29% | 218.79% |
| Average | 25.50% | 28.64% | 11.13% | 52.55% |
Table and calculations by author. Data source: Google Finance.
It's notable, however, that even in Q4, there have been three times during the past eight years when the returns were negative.
While the quarter has generally been a strong one for crypto, it's by no means a guarantee. Most recently, in 2022 when the stock market was plunging, Bitcoin incurred a double-digit percentage decline in Q4. And in 2018, it underwent one of its biggest declines.
Is $200,000 a possibility for Bitcoin this year?
As of the end of September, Bitcoin's value was about $114,000. If it were to rise by more than 50% in Q4, it would put the crypto's value at more than $171,000, as of the end of the year.
In addition, if interest rates continue to come down, it may help give the cryptocurrency a boost, as lower rates can lead to an increase in risk tolerance and speculation from investors. Thus, there's an outside chance that a $200,000 valuation could be in the cards for Bitcoin this year, but a lot would need to go right.
It can be dangerous to assume that, simply because Bitcoin has averaged a strong return in Q4 in years past, the same will indeed happen this time. There's currently a great deal of uncertainty with respect to the economy, as a result of trade wars and tariffs, which can stunt investor sentiment and the appetite for speculation.
There's no assurance that Bitcoin will be safe from any adversity. Back in 2022, when the S&P 500 fell by 19%, Bitcoin plummeted by a staggering 65%. Crypto investors should brace for the possibility of a decline in Q4, especially if economic conditions deteriorate.
Is Bitcoin a good investment today?
Given Bitcoin's surge in value this year and its vulnerability to economic conditions, I believe it may be overdue for a decline. Speculation is a big reason for the crypto's rising value; when investor sentiment sours, the digital currency could quickly fall out of favor. It may be tempting to assume its rally is going to continue and that Bitcoin is going to hit new heights in Q4, but it's a dangerous assumption.
Despite its record-breaking numbers this year, Bitcoin remains a highly risky asset to put in your portfolio. Although the cryptocurrency has done well in past Q4s, there's no guarantee that another strong quarter will occur this time around. I'm steering clear of Bitcoin, as conditions may be ripe for a sell-off.
