Bitcoin Hits Record Rally at $100k: What to Expect for Crypto in 2025

The Transformative Year for Bitcoin and Cryptocurrency Market

The past year has been a pivotal moment for bitcoin (BTC-USD) and the broader cryptocurrency market, signaling a significant shift towards institutional adoption. Among the most notable milestones were the launch of US-based spot bitcoin exchange-traded funds (ETFs), the introduction of options on these ETFs, and bitcoin’s remarkable surge past the $100,000 (£78,600) mark in December.

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A New Era for Bitcoin

This crescendo comes as anticipation builds for a potentially crypto-friendly US administration under President-elect Donald Trump, set to be inaugurated early next year. The launch of spot bitcoin ETFs on 10 January catalyzed an early-year rally, with bitcoin climbing from the upper $30,000s to nearly $48,000.

"The volumes were terrific coming out of the gate," said Gordon Grant, a cryptocurrency derivatives trader.

Institutional Adoption

This milestone gave institutional investors access to a regulated spot bitcoin ETF, creating a foundation for new market activities, including trading against regulated futures products and incorporating bitcoin as a portfolio optimization tool. Spot bitcoin ETFs function similarly to traditional ETFs but with a distinct focus on tracking the current price of bitcoin.

A Turbulent Year

However, the year was far from linear. After the initial ETF-fueled rally, bitcoin saw a sell-off before surging into a spring rally that propelled the digital asset above $73,000. "Optimism about greater incorporation of bitcoin as a tool and burgeoning liquidity in traditional crypto volatility markets drove this surge," Grant said.

Record High

On 14 March, bitcoin hit a record high of $73,580, according to CoinGecko data, its price bolstered by increased inflows from fund managers such as BlackRock (BLK) and Franklin Templeton (BEN), via spot bitcoin ETFs. The summer brought challenges, including the German government selling seized bitcoin and uncertainty surrounding the US presidential election.

"Rumblings of bitcoin sales by the US government and a regulatory overhang caused a summer slump," Grant said.

The Road Ahead

Yet, by the end of the year, the election of a crypto-friendly administration in the US reinvigorated the market, pushing bitcoin beyond $100,000 in December. Since then, bitcoin has reached an new all-time high above $108,000.

Institutional Interest in Bitcoin

2024 was transformative for bitcoin and the broader cryptocurrency market.

UCG via Getty ImagesOne of 2024’s biggest developments was the introduction of options on spot bitcoin ETFs.
Options are financial derivatives that give investors the right, but not the obligation, to buy or sell an underlying asset — such as shares in a spot Bitcoin ETF — at a predetermined price before a specific expiration date. They are powerful tools for managing risk and speculating on price movements.

"This has broadened the horizon for the asset class," Grant said, highlighting the billions of dollars in daily trading volumes that now eclipse the rest of the crypto options market.

A New Era for Bitcoin

These options signify a deeper integration of bitcoin into institutional capital markets, offering new tools for hedging and speculation. In late November, BlackRock introduced options trading for its iShares Bitcoin Trust (IBIT) (IBIT), generating nearly $1.9bn in notional exposure with 354,000 contracts traded.

A Shift in How Bitcoin is Utilised

Grant also pointed to a shift in how bitcoin is utilized, with the emergence of new use cases and investment opportunities. "This year, bitcoin transitioned from what MicroStrategy executive chairman Michael Saylor described as ‘Promethean fire’ — a novelty that mystifies — to a combustible catalyst," he said.

The Maturation of Capital Markets

The maturation of capital markets around bitcoin is set to unlock new investment opportunities and use cases. From prime services optimization to trade finance, bitcoin is becoming an increasingly versatile financial instrument.

"The holy grail for institutional players — seamlessly integrating bitcoin with equities, derivatives, and cash products — is now within reach," Grant said.

The Emergence of a New Financial Paradigm

As bitcoin begins 2025 with momentum, the groundwork laid in 2024 underscores its transition from a speculative asset to a prospective cornerstone of institutional finance. "We’re no longer just witnessing the evolution of an asset; we’re seeing the emergence of an entirely new financial paradigm," he said.