Bitcoin’s record-breaking rally took the digital asset past $90,000 and lifted the overall value of the crypto market above its pandemic-era peak as traders bet on a boom under President-elect Donald Trump.
Several industry participants are bullish that bitcoin could go even higher by the end of the year.
Matt Hougan, chief investment officer at Bitwise, said he expects bitcoin to reach as high as $100,000 by the end of the year, and $200,000 by the end of 2025, as Trump has vowed to appoint a crypto-friendly chair to the Securities and Exchange Commission and build a bitcoin reserve in the U.S.
Still, investors should remain cautious, with bitcoin being highly volatile.
The market is currently in a “state of euphoria,” analysts at QCP Capital wrote in a Monday note.
Basis yields of bitcoin perpetual futures, which refer to the difference between the spot price of an asset (in this case bitcoin) and the price of perpetual futures, stand at seven-month highs. It shows that leverage is at an elevated level in the market.
“While we remain structurally bullish, we are cautious of any pullbacks, especially from leveraged washouts,” the QCP analysts noted. “Historically, such spikes in basis yields have not lasted very long either.”
Meanwhile, investors will be closely watching whether Trump will continue to signal support for digital assets, and whether and how he might deliver his promises to the crypto industry.
