Bitcoin (BTC 1.07%) has had an interesting year. From the start of 2024 to its all-time high on March 14, Bitcoin jumped 73%. But it’s been a pretty choppy four months since then. Bitcoin has had a nice run in the past couple of weeks, but it’s currently 12% off that peak price (as of July 18).

The bulls are hoping that a breakout can happen. With that being said, is the world’s leading cryptocurrency on track to reach $100,000 sometime in 2025, setting a new record and breaking the psychologically important six-figure mark? Let’s see if that 52% gain (from today’s price) is a possibility.

Multiple catalysts

Less than two years ago toward the end of 2022, Bitcoin’s price was under $16,000. That year was a difficult one for risk assets, a category that cryptocurrencies and stocks fall in. But it’s been remarkable to see Bitcoin’s ascent since then.

The top digital asset can thank some recent catalysts for its performance. Most notable this year was the approval by the Securities and Exchange Commission (SEC) of spot Bitcoin exchange-traded funds (ETFs). This highly anticipated event essentially legitimized Bitcoin both on Wall Street and in Washington. And it opened the floodgates for lots more capital to flow to the asset in a convenient and compliant manner.

Another catalyst was the April halving that cut the new supply of Bitcoin entering the market in half. This happens roughly every four years, as it reinforces Bitcoin’s fixed issuance schedule. The digital asset has typically experienced a massive bull run in the months following.

I believe that the wider acceptance of Bitcoin is another step in the right direction. For example, during this year’s election cycle, politicians are starting to make Bitcoin more specifically, and crypto more broadly, an important issue.

The possibility of interest rate cuts could also boost Bitcoin’s price. That’s because investors will start to accept more risk with the goal of achieving a higher return. And given Bitcoin’s impressive track record, demand for it could go up if the Federal Reserve becomes more accommodative.

Previous cycles

I noted above that after a halving event occurs, Bitcoin’s price usually rises rapidly in the 12 to 18 months or so after. Of course, it’s not surprising that as the asset has matured, this bull run hasn’t been as spectacular as the previous ones.

For instance, in the 17 months following the July 2016 halving, the price skyrocketed 2,890%. And in the 18 months after a halving happened in May 2020, Bitcoin’s price soared nearly eightfold.

Therefore, it’s safe to assume that Bitcoin’s price will increase at a more muted pace. To see it rise by 52% by the end of next year, however, seems like a totally realistic scenario that fits within the trend of softening post-halving returns.

Keep this in mind

While I believe it’s totally in the realm of possibility that Bitcoin will hit $100,000 next year, it’s important to understand that short-term projections are often wrong. Even worse, they provide a false sense of precision that can end up resulting in poor investment decisions. Consequently, you shouldn’t buy Bitcoin with a 12- or 24-month outlook, expecting a large gain in 2025. A healthier investing horizon would be several years into the future.

Instead, it’s always best to maintain a long-term mindset. This will force you to focus on what matters, like the fact that Bitcoin has a hard supply cap and that it’s a decentralized digital currency not controlled by any single entity. If these traits resonate with you, you can buy this crypto with a time horizon spanning at least five years.