Bitcoin's (BTC 0.86%) price has declined nearly 20% year to date, erasing all its gains since President Trump won the election on Nov. 5, 2024. Let's see why the world's top cryptocurrency lost its luster -- and why it still has a shot at reaching $100,000 again this year.
Why did Bitcoin's price plummet?
Bitcoin previously slumped in 2022 and 2023, when rising interest rates drove investors from cryptocurrencies toward more conservative investments. But in 2024 and 2025, it recovered as its first spot price ETFs were approved, it underwent its latest halving (which halves its mining rewards every four years), and the Federal Reserve cut its benchmark rate six times in a row. Bitcoin's adoption as legal tender in certain countries, institutional investments in its new ETFs, and a growing interest in building "Bitcoin Treasuries" amplified those gains.
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However, Bitcoin doesn't have as many near-term catalysts this year. It's also unclear if the Fed will continue to aggressively cut interest rates. Trump's recent nomination of Kevin Warsh, who previously favored rate hikes, as the next Fed chair raises even more questions. Warsh recently aligned himself with the Trump Administration's push for lower rates, but it's unclear if he will stick to that plan after he takes the helm.
That uncertainty is driving investors to book their profits in Bitcoin and other cryptocurrencies while pivoting toward safe-haven investments like gold and silver. As Bitcoin dropped below key support levels, it triggered leveraged liquidations of prominent positions. That pressure could certainly drive Bitcoin's price lower before it bounces back.
CRYPTO: BTC
Key Data Points
Why could Bitcoin's price bounce back to $100,000?
That situation seems dire, but two catalysts could drive Bitcoin's price back above $100,000. First, Warsh could stick to his newly dovish stance on inflation and aggressively cut interest rates this year. That pressure could weaken the U.S. dollar, spur a rotation back into riskier assets, and drive more investors to accumulate Bitcoin as a hedge against inflation.
Second, U.S. senators recently drafted a complete regulatory framework for the cryptocurrency market. If signed into law, it would clarify which cryptocurrencies are commodities and allow the crypto-friendly Commodity Futures Trading Commission (CFTC) to regulate the industry rather than the Securities and Exchange Commission (SEC). That clarity could drive institutional investors to increase their Bitcoin holdings through spot-price ETFs.
As Bitcoin's price rises again, it will inevitably spark another wave of FOMO (fear of missing out) buying. That upward pressure could easily drive its price back beyond $100,000 again.
