If the past serves as a lesson, Bitcoin might catch investors off guard in 2025.
For numerous crypto investors, the idea that Bitcoin (BTC 3.57%) could rise dramatically in 2025 may seem far-fetched. Presently, Bitcoin is around 30% below its all-time high of $109,000 recorded in January, and the escalating global trade tensions could dampen any budding crypto resurgence.
Nevertheless, a recent analysis by Fidelity Digital Assets suggests that Bitcoin’s price might be poised for substantial growth. Current indicators hint at a significant rally for Bitcoin on the horizon in 2025. So, is Fidelity onto something?
The Bitcoin cycle
To accurately address this question, it’s crucial to grasp the historical four-year Bitcoin cycle, which consists of an accumulation phase, a growth phase, an acceleration phase, and a crash phase.
The most considerable profits generally emerge during the acceleration phase, characterized by high volatility, during which Bitcoin tends to spike rapidly. This phase culminates in a speculative surge that may propel Bitcoin to unprecedented heights. Fidelity asserts this could materialize once Bitcoin reclaims the $109,000 threshold. If that occurs, be prepared for a significant upward trajectory in Bitcoin’s value.
The encouraging news is that, based on various key metrics analyzed by Fidelity, Bitcoin still seems to be within the acceleration phase. In this context, Fidelity notes that the recent downturn is nothing out of the ordinary.
Historically, Bitcoin has experienced considerable double-digit pullbacks during prior acceleration phases. According to the myths and narratives surrounding Bitcoin, this is when investors should exhibit “diamond hands” and avoid having “paper hands.” In essence, you need to hold onto your Bitcoin with unwavering resolve, despite the tumultuous market fluctuations.
How much time do we have left?
However, there is a crucial caveat: The window for a potential rally is closing swiftly. Fidelity Digital Assets has meticulously analyzed historical Bitcoin cycles and concluded that we are nearing the end of the typical acceleration phase. Previous acceleration phases spanned 244, 261, and 280 days. As of April 4, we are already over 250 days into the current acceleration phase.
Should Bitcoin fail to surge before the onset of summer, we may witness the conclusion of the acceleration phase. This could spell trouble for Bitcoin, as previously mentioned, the fourth phase of the four-year cycle is the crash phase, marked by a steep drop in Bitcoin’s value.
Potential red flags
At this point, you may have noticed a few warning signs. The first red flag is that this analysis relies heavily on Bitcoin’s past performance during previous market cycles. As we know, historical performance is no guarantee of future results, and this is particularly pertinent with Bitcoin, given its status as a relatively new digital asset.
Image source: Getty Images.
The second concern is that this parabolic rally narrative fails to account for the current macroeconomic landscape. For instance, “Liberation Day”—when the Trump administration imposed extensive tariffs globally—might not prove as liberating for Bitcoin or other assets as some may hope.
Ultimately, it’s your decision to determine whether investors will flock to Bitcoin as a safe haven amidst global economic turbulence. Interestingly, Bitcoin seemed to better withstand the initial aftermath of the tariff announcements compared to many technology stocks, which could indicate lingering confidence in Bitcoin.
Should you invest in Bitcoin now?
If you adhere to the Bitcoin cyclical theory, you must also acknowledge that following the acceleration phase, a crash phase is inevitable. This pattern unfolded in 2014, 2018, and 2022, with Bitcoin experiencing staggering declines of 58%, 74%, and 64%, respectively.
Moreover, time is running out for Bitcoin to reach parabolic heights. Thus, even if you manage to accumulate Bitcoin in the upcoming weeks or months, it’s likely that the valuation of those assets will plummet in late 2025 or early 2026. This cyclical behavior is simply part of Bitcoin’s nature.
Investing in Bitcoin has never been for the faint-hearted. The most effective strategy is to adopt a long-term perspective, allowing you to avoid obsessively monitoring Bitcoin prices every single day. Bitcoin remains one crypto asset you can acquire and hold indefinitely, provided you can navigate its cyclical booms and busts.
