Bitcoin Reached Record Highs in 2024, but There Could Be Even More Upside This Year

The past year marked a milestone for crypto. Bitcoin (CRYPTO: BTC) hit six figures as excitement built around the potential for the digital currency. Last year also marked the introduction of many spot Bitcoin exchange-traded funds (ETFs), and the latest halving event, which cut the growth of new Bitcoin supply in half. In total, the cryptocurrency rose by 119% in 2024, marking the second straight year where it more than doubled in value (it soared 154% in 2023).

But despite the huge gains that Bitcoin amassed during the past couple of years, it may not necessarily be too late to invest in the digital currency. Many analysts and growth investors remain bullish on Bitcoin and its potential to hit new heights in 2025.

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A crypto reserve could drastically increase demand

A big reason that Bitcoin has surged in value in recent months was that President-elect Donald Trump sounded fairly bullish on the digital currency at rallies leading up to the election.

At one rally, Trump said he wanted the U.S. to become the "crypto capital of the planet," suggesting that while there will be regulations on the industry, they could prove favorable to miners and crypto enthusiasts. "We will have regulations, but from now on the rules will be written by people who love your industry, not hate your industry," he said.

Trump also said that he wants the government to build a Bitcoin reserve, which would not only increase demand for the scarce digital asset but also be a clear sign of the government's favorable outlook on the digital currency. If the government is bullish on crypto, that could lead to more individuals and corporations also buying Bitcoin.

Bitcoin to $200,000 in 2025?

If there are more people buying Bitcoin, that will inevitably put a lot of upward pressure on its value given its finite supply (only 21 million bitcoins will even exist). Multiple crypto analysts project that the price of Bitcoin could hit $150,000 this year, with some projecting it could soar even higher, to $200,000.

One of the biggest Bitcoin bulls, Cathie Wood, believes that could only be the beginning. Her base case is for Bitcoin to reach $650,000 by 2030, with a best-case scenario seeing it hit $1.5 million by then.  This will depend on the level of institutional buying, and whether the U.S. and other governments decide to create Bitcoin reserves. All that buying pressure would push the price up.

But investors should be careful not to assume that it will be a straight line up. A lot will ultimately depend on just how bullish retail investors, institutional investors, and even the government are on crypto. Right now there's a lot of optimism and excitement, but it's usually a bumpy ride for Bitcoin, and investors should brace for the possibility of plenty of volatility in the future.

Is Bitcoin a no-brainer investment for 2025?

There's a lot of bullishness around crypto these days, but it's still not an investment that is going to be suitable for most investors. Much of the price movement late last year was driven by Trump's pro-crypto stance. But if Trump ends up taking a softer stance on crypto or doesn't prove to be as bullish on the digital currency as investors may have expected, that could limit Bitcoin's performance this year.

This is a highly speculative asset, and unless you have a high risk tolerance, you may still be better off avoiding crypto. While it could soar to $150,000 and higher this year, it's also possible for Bitcoin to give back some gains. If you aren't prepared for that possibility, you may want to take a step back and consider whether the risk involved with crypto is suitable for your portfolio.

Should you invest $1,000 in Bitcoin right now?

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.