Bitcoin’s (BTC) price outlook remains "structurally bullish" despite temporary headwinds from macroeconomic data, Zach Pandl, Grayscale’s head of research, told Cointelegraph. In a recent interview, Pandl discussed the impact of positive US jobs reports on Bitcoin’s spot price and the future prospects for cryptocurrency valuations.
The Impact of Positive US Jobs Reports
On January 10, a positive US jobs report sent BTC’s spot price tumbling below $93,000 as the US dollar rose on expectations of slower interest rate cuts. The strong jobs report reduced the chances of Fed rate cuts, further supporting the dollar and potentially weighing on Bitcoin’s price temporarily.
"Bitcoin seems to be held back by strength in the US dollar, which is rising due to more hawkish Fed policy and the threat of tariffs," Pandl told Cointelegraph on January 10. "Today’s strong jobs report reduces the chances of Fed rate cuts, further supports the dollar, and may weigh on the price of Bitcoin temporarily."
Futures Markets and Interest Rate Cuts
The US Dollar Index (DXY) rose nearly 0.5% in morning trading, reflecting the strengthening dollar. However, futures markets now gauge the probability of an interest rate cut in January at less than 3%, according to data from CME FedWatch.
A Short-Lived Setback?
However, with the US presidential inauguration right around the corner, this setback may be short-lived, Pandl said. "With the [US presidential] inauguration right around the corner, this setback may be short-lived," he added.
Despite the temporary headwinds, Pandl still sees a "structurally bullish outlook for crypto valuations." This optimism is driven by several factors, including the potential regulatory environment and institutional adoption.
The Potential Regulatory Environment
On November 5, 2024, Donald Trump prevailed in the US presidential elections. Trump has promised to appoint industry-friendly leaders to key regulatory agencies and make the US "the world’s crypto capital." He takes office on January 20.
In December, Grayscale updated its list of top tokens to watch in 2025 to reflect changes, including "the US election and its potential implications for industry regulation."
Crypto’s Best Year Ever?
Steno Research expects 2025 to be crypto’s best year ever, with BTC crushing all-time highs as an unprecedentedly favorable regulatory environment propels institutional adoption to "unparalleled levels." This optimism is driven by the potential benefits of a more supportive regulatory environment and increased institutional participation.
Surging Institutional Inflows
US Bitcoin exchange-traded funds (ETFs) broke $100 billion in net assets for the first time in November, according to data from Bloomberg Intelligence. Steno expects Bitcoin ETFs to see additional net inflows of $48 billion in 2025.
Surging institutional inflows could cause positive "demand shocks" for Bitcoin, potentially sending BTC’s price soaring in 2025, asset manager Sygnum Bank said in December.
Structurally Bullish Outlook
Despite the potential headwinds from macroeconomic data, Pandl remains optimistic about Bitcoin’s price outlook. He sees a structurally bullish outlook for crypto valuations, driven by several factors, including the potential regulatory environment and institutional adoption.
In conclusion, while temporary headwinds may affect Bitcoin’s spot price, Pandl remains confident in the long-term prospects for cryptocurrency valuations. The potential regulatory environment and increased institutional participation are expected to drive growth and adoption in 2025.
Key Takeaways
- Bitcoin’s price outlook remains "structurally bullish" despite temporary headwinds from macroeconomic data.
- A positive US jobs report sent BTC’s spot price tumbling below $93,000 as the US dollar rose on expectations of slower interest rate cuts.
- The strengthening dollar and reduced chances of Fed rate cuts may weigh on Bitcoin’s price temporarily.
- Futures markets now gauge the probability of an interest rate cut in January at less than 3%.
- Steno Research expects 2025 to be crypto’s best year ever, with BTC crushing all-time highs as an unprecedentedly favorable regulatory environment propels institutional adoption to "unparalleled levels."
- Surging institutional inflows could cause positive "demand shocks" for Bitcoin, potentially sending BTC’s price soaring in 2025.
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