Bitcoin’s price surged to $105,000 on Monday, recovering from an early dip to $102,000 as the broader crypto market steadied after a tumultuous start to the trading day. This rebound follows Moody’s downgrade of U.S. government bonds, which initially rattled markets. In parallel, Ether reclaimed the $2,500 mark, and the DeFi lending platform Aave outperformed many large-cap altcoins, signaling a cautious optimism among traders.
Crypto Markets Regain Footing
The early session jitters were a reaction to Moody’s decision to lower the U.S. credit rating from its prestigious AAA status late last Friday. This downgrade shook bond markets, pushing yields on 30-year Treasuries above 5% and 10-year notes past 4.5%. The crypto world wasn’t immune to this volatility, with Bitcoin dipping sharply before stabilizing. “What does [the downgrade] mean for markets? Longer-term – really nothing,” opined Ram Ahluwalia, CEO of Lumida Wealth, emphasizing that the immediate impact might be more about investors rebalancing portfolios than a genuine market panic. This mirrors the sentiment seen when Bitcoin surpassed $95K amid resilient U.S. stocks, where analysts voiced concerns over market perception.
Despite these initial tremors, the S&P 500 and Nasdaq managed to erase their morning losses, mirroring the resilience seen in the crypto markets. Solana, Avalanche, and Polkadot, however, remained down by 2%-3%, highlighting the uneven recovery among cryptocurrencies. But even as some altcoins struggled, the overall sentiment turned cautiously optimistic.
Bitcoin’s Path to New Heights
Amid this backdrop, Bitcoin’s potential for further gains has not gone unnoticed. Digital asset ETF issuer 21Shares projects a significant upside for BTC in 2025. “Bitcoin is on the verge of a breakout,” declared Matt Mena, a research strategist at 21Shares, in a Monday report. He attributes the current rally not to the usual retail frenzy, but to a combination of structural factors: institutional inflows, a historic supply crunch, and improving macroeconomic conditions. These elements, he suggests, could drive Bitcoin to an impressive $138,500 by the end of the year—a 35% increase from current levels. This aligns with previous trends where Bitcoin surged past $94,000 as institutional interest and market optimism grew.
Spot Bitcoin ETFs have played a crucial role in this narrative, consistently absorbing more Bitcoin than is mined daily. This tightening supply has been further exacerbated by major institutions and corporations, alongside newcomers like Twenty One Capital, accumulating the cryptocurrency. Even some states are reportedly exploring the creation of strategic reserves, indicating a shift towards viewing Bitcoin as a serious long-term asset.
The Road Ahead: Opportunities and Challenges
While the optimism around Bitcoin’s future is palpable, it’s not without its challenges. The broader economic environment remains uncertain, with inflationary pressures and geopolitical tensions continuing to loom large. Additionally, the regulatory landscape for cryptocurrencies is still evolving, potentially impacting market dynamics.
Analysts remain divided on the longevity of Bitcoin’s ascent. While some see the confluence of factors as heralding a new era for digital assets, others caution against overexuberance, pointing to the inherent volatility that has historically characterized crypto markets. As Callie Cox, chief market strategist at Ritholtz Wealth Management, noted, the recent credit downgrade was “the opposite of a surprise,” suggesting that much of the market’s reaction may already be priced in.
In the coming months, all eyes will be on Bitcoin’s ability to sustain its momentum amid these shifting sands. Will it march towards the elusive $138,500 mark, or will unforeseen hurdles temper its rise? It’s a narrative that will keep both seasoned investors and curious onlookers riveted, with every twist and turn potentially reshaping the landscape of digital finance.
Source
This article is based on: Bitcoin Climbs to $105K; Crypto ETF Issuer Sees 35% Upside
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
