The cryptocurrency market surged in 2024, with Bitcoin reaching new all-time highs and investor optimism riding high. As the world looks ahead to 2025, market participants are closely watching the potential impact of a second Donald Trump administration on digital assets. With macroeconomic trends, regulatory clarity, and monetary policy all in play, the next 100 days of a new U.S. presidency could prove pivotal for the future of cryptocurrency, Bitcoin, and the broader risk-asset landscape.
Bitcoin’s Historic 2024 Run
According to Dow Jones market data, Bitcoin delivered an impressive 119.6% return in 2024. Over the past two years, it has surged by 464.2%—its strongest two-year performance since 2021, when it climbed 542%. The flagship cryptocurrency briefly broke the $100,000 mark in early December 2024 and closed the year at $93,413.90.
This rally coincided with one of the best two-year performances in equities since the late 1990s, reflecting strong investor appetite for growth and alternative assets. While Bitcoin led the charge, other digital assets also posted significant gains.
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Strong Gains Across Major Cryptocurrencies
Although Ethereum lagged behind Bitcoin, it still managed a solid 46.5% increase in 2024, ending the year at approximately $3,344.72. Solana, often seen as a competitor to Ethereum due to its high-speed blockchain, rose 85.5% to close at $192.65.
One of the standout performers was Ripple (XRP), which soared 238.4% in 2024 to finish at $2.09—the best annual performance for the asset since 2021. These gains reflect growing institutional interest and increasing use cases across decentralized finance (DeFi), smart contracts, and cross-border payments.
Even stocks tied to the crypto ecosystem saw substantial appreciation. MicroStrategy (MSTR-US), which holds about 446,400 BTC—roughly 2% of Bitcoin’s total supply—saw its share price skyrocket by 358.5% in 2024, marking its best year since 1999. Meanwhile, Coinbase Global’s stock climbed 42.8%, underscoring investor confidence in regulated crypto platforms.
Regulatory Outlook: A Make-or-Break Factor
For the bull run to continue into 2025, regulatory developments will be critical. Investors are particularly focused on whether a potential Trump administration will deliver on its campaign promises to support the cryptocurrency industry.
Sean Farrell, Head of Digital Assets at Fundstrat, emphasized that “the first 100 days of a Trump presidency will be extremely important.” This period is traditionally seen as a key indicator of a new administration’s policy direction and effectiveness.
One major expectation is the establishment of a strategic Bitcoin reserve—a concept Trump mentioned during his campaign but has not yet detailed. Such a move could signal strong federal endorsement of digital assets and potentially boost long-term adoption.
Clarity on Cryptocurrency Classification
A major pain point for the industry has been the lack of clear regulatory guidance from the U.S. Securities and Exchange Commission (SEC). Under Chairman Gary Gensler, the SEC has pursued enforcement actions against major players like Coinbase and Consensys Software, alleging unregistered securities offerings.
Industry leaders argue that instead of relying on litigation, regulators should provide transparent rules on which cryptocurrencies qualify as securities versus commodities. Clear classification would foster innovation while protecting investors—creating a balanced framework for sustainable growth.
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The SAB 121 Challenge
Another key issue is Staff Accounting Bulletin 121 (SAB 121), which requires public companies—including banks—that custody digital assets to record them as liabilities on their balance sheets.
Alex Thorn, Head of Research at Galaxy Digital, explains that this rule forces institutions to set aside capital equal to the value of the crypto they hold, creating financial and operational hurdles. Revisiting or revising SAB 121 could open the door for more traditional financial institutions to enter the custody space—potentially accelerating mainstream adoption.
Macroeconomic Drivers: Fed Policy in Focus
Beyond politics and regulation, macroeconomic conditions will heavily influence whether Bitcoin and other cryptocurrencies can sustain their momentum.
Market attention is laser-focused on the Federal Reserve’s interest rate decisions. In December 2024, Fed officials signaled that rate cuts might be smaller than previously expected. Since then, traders have adjusted their outlook accordingly.
According to CME FedWatch data, futures markets currently assign only a 14% probability to rates staying unchanged in 2025 (between 4.25%–4.5%). There’s a 33.2% chance of a single 25-basis-point cut and a 31.5% chance of two cuts over the year.
Lower interest rates typically benefit risk assets like stocks and cryptocurrencies, as they reduce the opportunity cost of holding non-yielding investments. Conversely, higher-for-longer rates can pressure valuations and slow capital inflows into volatile assets.
FAQs: Your Key Questions Answered
Q: Why are Trump’s first 100 days so important for cryptocurrencies?
A: The first 100 days serve as an early benchmark for presidential policy priorities. Investors want to see if Trump follows through on pro-crypto promises like establishing a national Bitcoin reserve or reforming digital asset regulations.
Q: Could Bitcoin really hit $100,000 again?
A: Yes—many analysts believe another push above $100,000 is possible if macro conditions improve, institutional adoption grows, and regulatory clarity emerges under a supportive administration.
Q: What is SAB 121 and why does it matter?
A: SAB 121 treats custodied crypto as a liability on corporate balance sheets. This deters banks and financial firms from offering custody services due to capital requirements. Changing it could bring more traditional players into the space.
Q: How do interest rates affect cryptocurrency prices?
A: Lower interest rates make non-yielding assets like Bitcoin more attractive compared to bonds or savings accounts. If the Fed cuts rates in 2025, it could fuel another wave of investment into digital assets.
Q: Is Ethereum still a good investment after underperforming Bitcoin?
A: Absolutely. Ethereum remains central to DeFi, NFTs, and enterprise blockchain solutions. Its upcoming protocol upgrades may reignite investor interest in 2025.
Q: Will Ripple benefit from improved regulation?
A: Yes—clearer rules on XRP’s status could resolve lingering legal uncertainties and position Ripple for expansion in global payments infrastructure.
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Final Thoughts: A Pivotal Year Ahead
The convergence of political leadership, regulatory evolution, and monetary policy creates a defining moment for cryptocurrency markets in 2025. While Bitcoin’s record-breaking performance in 2024 captured headlines, sustaining that momentum depends on structural support—not just speculation.
Investors should monitor three core factors:
- Whether the U.S. adopts friendlier crypto regulations under new leadership
- Potential changes to accounting rules like SAB 121
- The Federal Reserve’s trajectory on interest rates
With these elements aligned, Bitcoin, Ethereum, and other leading digital assets could enter a new phase of institutional acceptance and long-term value creation.
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