Just one rate cut in 2025? What this means for Bitcoin

Bitcoin is an evolving financial instrument, adapting to both technological advancements and real-world economic forces. As we move deeper into 2025, Bitcoin’s trajectory will likely be shaped by:

• who accumulates it, 
• how it’s used, and 
• how the broader market reacts to its growing scarcity.

The market anticipates a rate cut, but some Fed officials remain cautious due to persistent inflation (2.9%). The Federal Reserve’s preferred gauge for inflation, the PCE index, is expected to rise 0.3% for the month. Consumer confidence has dropped to an eight-month low, driven by concerns over tariffs and their impact on prices. The labor market remains stable, with upcoming jobs data providing further economic insight.

Historically, rate cuts have been a tailwind for Bitcoin, primarily by reducing borrowing costs and improving liquidity. As we approach the end of the high-interest-rate cycle, the shift is expected to fuel a broader market recovery, potentially drawing renewed interest toward Bitcoin. This aligns with its role as a long-term hedge against currency debasement.

However, given Bitcoin’s nature as a globally scarce asset, we may see some long-term investors taking advantage of the asset’s discounted price and accumulating as we have seen over the past five years.

In the chart above, we can see that long-term Bitcoin holders, those who held on to their assets for more than 155 days, usually continue in their accumulation regardless of price action, reinforcing its strong fundamentals despite market fluctuations. It thrives in periods of uncertainty, as investors increasingly recognize its pre-programmed scarcity and store-of-value proposition.

What do I make out of this?

With the jobs report coming on Friday, March 7, and inflation data following on Wednesday, March 12, it is important for investors to take market reactions with a grain of salt and focus on Bitcoin’s fundamentals and growing utility in global finance.

If the U.S. establishes a Bitcoin Strategic Reserve, Bitcoin could easily surpass $200,000 and potentially soar beyond $300,000. However, in the absence of such a move, Bitcoin may consolidate within the $150,000–$200,000 range. This bullish outlook is largely driven by Donald Trump and his pro-crypto administration, with both Trump and key cabinet members reportedly holding millions of dollars in cryptocurrency.

Moreover, the new administration’s favorable stance on crypto could attract significant interest from institutional investors. This shift may also lead to corporations and even nation-states purchasing Bitcoin for their balance sheets, further legitimizing and driving demand for the asset.