Bitcoin is back in the spotlight: digital gold is breaking price records and rapidly approaching $100,000 per BTC. Why is the price rising, and what does it mean? What awaits Bitcoin in 2025, and what are the prospects for mining digital gold next year? Let's figure it out together with Timofey Grigorenko, the founder of Ubit, a company that has been mining BTC for several years.
It's worth starting with the fact that in 2024, the next Bitcoin halving took place — the reward for blocks mined by miners was halved, and this naturally affected the coin's price. Halving traditionally impacts the value of coins: if we look at the historical trends observed in previous halving years, Bitcoin's value always grows significantly the following year. This growth begins in November-December during the halving year and peaks about a year later.
There are typically several reasons for this phenomenon. Of course, the halving itself affects the BTC price: even if demand for coins remains unchanged, a deficit arises (since only half as many coins are mined), pushing the BTC price upward. The second reason is the U.S. elections, which — coincidentally — occur every halving cycle (once every four years).
This year, one of the most significant factors contributing to Bitcoin's growth was Donald Trump's victory in the U.S. presidential election. During his campaign, Trump repeatedly expressed support for cryptocurrencies and proposed the idea of using Bitcoin as a strategic reserve for the U.S. This information caused a stir, especially following his statements about creating a national Bitcoin reserve. Trump views Bitcoin as a way to strengthen the U.S. economy in the face of rising national debt and inflation. In his view, Bitcoin's limited supply and growing demand can offset the dollar's weakening, sparking investor interest.
An equally important event was the approval of a Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). This decision significantly increased cryptocurrency accessibility for institutional and retail investors. An ETF is a fund designed to closely track Bitcoin's price by purchasing and holding Bitcoin in its portfolio and selling shares of the fund on the stock exchange. The ETF approval triggered a surge of capital into the cryptocurrency industry. In the first few months following the Bitcoin ETF launch, over $100 billion was invested in the market, making it the most successful and fastest-growing ETF in history. This capital influx was driven by large financial institutions like BlackRock and Fidelity, which began offering Bitcoin-based products to their clients.
This move significantly boosted confidence in cryptocurrencies, simplified the investment process, and attracted new market players. Institutional investors gained the ability to purchase Bitcoin via traditional financial instruments, broadening the buyer base. The ETF approval made Bitcoin accessible to a wider audience and strengthened its position within the financial system.
All these factors lead to a BTC shortage and a rise in Bitcoin's price. Consider this: in April 2024, the halving reduced the reward from 6.25 BTC to 3.125 BTC, significantly decreasing the number of new bitcoins entering the market. Increased institutional demand further reduces the number of freely available coins: BTC bought as collateral no longer returns to the market. This year alone, coins worth about $70 billion (around 1 million BTC, or roughly 10% of the total available Bitcoin supply) have been purchased.
If we recall that nearly 30% of all BTC is lost forever, it becomes clear that circulating bitcoins are becoming scarcer, while the number of crypto users is steadily growing. In 2023 alone, the number of crypto users grew by 34% (from 420 million to 590 million), and this figure is expected to reach 700 million in 2024. Most newcomers enter the market specifically for Bitcoin, showing little understanding or interest in other cryptocurrencies.
Taken together, these factors suggest that Bitcoin's price could grow substantially in the next four years, potentially reaching $400,000 per BTC. Leading global analysts predict Bitcoin could achieve this price range.
Additionally, global companies like Tesla are starting to use Bitcoin as a reserve asset. This means they, too, are buying coins, creating an even greater deficit and further driving up the asset's price. Bitcoin is a limited asset. Unlike fiat currencies, it cannot be printed indefinitely; its supply is capped.
If we add up all these factors, we can draw one simple conclusion: Bitcoin will grow in price, and Bitcoin mining will become a highly profitable business in the near future. This business already generates an average return of 50 to 100% per annum, and when the asset reaches the price of $120,000 per coin, the profitability indicator will exceed 100%. When the price rises to $250,000, the profitability from mining will be measured in the hundreds of percent per annum. Of course, this will inevitably affect the increase in the complexity of Bitcoin mining.
As soon as the Bitcoin price begins to break through new value peaks, old capacities, which have been inactive until now due to unprofitability, will most likely be activated. This will multiply the growth of mining complexity. However, in the long term, digital gold is perhaps the most profitable and promising asset of our time.