Summary Bitcoin is consolidating itself as a strategic asset and has already surpassed $105,000, counting on increasing adoption by institutional investors. In addition, companies such as MicroStrategy are leading the accumulation of the asset, while public interest is growing, signaling further appreciation. With Bitcoin ETFs outperforming gold, this asset stands out as an important piece in diversified portfolios. Investment Thesis Bitcoin reaffirms its strength by surpassing the $105,000 level with Trump's inauguration. The store of value thesis gains strength, as MicroStrategy continues to lead purchases by accumulating 450,000 BTC. The pension fund industry confirms the confidence of conservative investors, while public interest seen by the rise in Google Trends has not yet reached levels seen in the euphoria of 2017. Another interesting fact is Jamie Dimon's public criticism, while J.P. Morgan is taking several steps towards the adoption of cryptocurrencies. The computing power is 610,929 times greater than that of the 500 largest supercomputers, highlighting the security of the network. This may be one of the reasons why the volume of inflows into Bitcoin ETFs in the first year far exceeded that of gold, which solidifies it as an alternative in a global portfolio. Performance During Trump's Inauguration Bitcoin is experiencing strong volatility on the day of Donald Trump's inauguration as US President. So far, it has already reached an ATH and is trading close to $105,000, showing strength. BTC/USD (Koyfin) Furthermore, Trump's memecoin launches ahead of his election seem to make clear the president's affinity for cryptocurrencies, and this is a great sign for investors in this asset class. Strategic Reserve of Value for Companies MicroStrategy recently made its 10th consecutive weekly purchase, acquiring 2,530 BTC for $243 million. The company currently holds 450,000 BTC valued at $28.2 billion, and an average price of $62,691 per bitcoin. Total Bitcoin Holdings (TradingView) MicroStrategy continues to lead the way among companies that hold the most Bitcoin, and in my view, 2025 could mark the year in which there is a major adoption of Bitcoin by companies in their strategic reserves. The number of bitcoin held by companies, ranked (Utoday) Adoption Among Institutional and Retail Investors Among retail investors, the outlook is also positive. Searches for Bitcoin have doubled in recent weeks, and are still far from reaching the historic peaks of 2017, 2019 and 2021. Bitcoin, Google Trends interest over time, worldwide (Bloomberg and Deutsche Bank) Among institutional investors, a recent article shows how adoption of cryptocurrencies like Bitcoin has increased among investors known for their conservatism. Pension funds in Michigan and Wisconsin are among the largest investors in equity funds that have cryptocurrencies in their portfolios. In the same vein, managers in Australia and the United Kingdom are taking similar risks, with consultants even reporting a flood of inquiries about Bitcoin after the election. In my view, it is quite possible that this adoption will increase even more with the Trump administration. Still on the subject of institutional investors, it is interesting to see the statements made by Jamie Dimon, CEO of J.P. Morgan, with public criticism of Bitcoin. The executive recently said that Bitcoin is a decentralized Ponzi scheme. Meanwhile, J.P. Morgan is taking several actions to promote cryptocurrencies. In my view, this is a clear and inevitable adoption by institutional investors, and a great signal for retail investors. Can We Call it a Safety Reserve? While my answer to the question is still no, as I believe Bitcoin plays other roles in a portfolio, it is interesting to note the power of the cryptocurrency network. In comparison, the network has 610,929 times more computing power than the 500 largest supercomputers in the world, and this clearly demonstrates the strength of its decentralized network. Bitcoin vs Supercomputers (Visual Capitalist) To put it into perspective, Bitcoin has surpassed gold with over $36 billion in ETF inflows in its first year. This reflects the enthusiasm surrounding the cryptocurrency. Gold vs. Bitcoin: ETF Inflows by Year (Inflation-Adjusted) (Data from ETF.com, Farside Investors, and Bureau of Labor Statistics. Past performance is not an indicator of future results. As of January 10, 2025.) What is the Target Price? As anticipated in other Bitcoin articles , I use seasonality to get an idea of a target price. The chart suggests that the daily return for Q1 is around 1.5%, and this suggests a 4.59% appreciation in the first three months of the year. So, starting with Bitcoin at $100k, we would have a target of $104,590k by the end of Q1. Bitcoin Price Seasonality (TradingCharts) However, with the positive momentum and a pro-crypto government, I wouldn't be surprised if prices hit around $110k by the end of Q1 2025. Potential Risks to the Bullish Thesis There are several risks to the thesis, but I want to focus on two new risks. One is that the market cap of crypto assets is reaching extremely high levels on a chart analysis. This suggests that a sharp correction could occur. CryptoMarket Capitalization (TradingView) Another risk concerns the comparison of the flow between Bitcoin and Gold ETFs. It is interesting to note that gold has a much more predictable growth trajectory, which is not the case for Bitcoin. Therefore, it is highly recommended that investors, especially conservative ones, evaluate the risk/return ratio carefully. The Bottom Line Bitcoin has been showing strength as the Trump administration takes office, and this effect is also being seen by all classes of investors, such as MicroStrategy, which continues to accumulate Bitcoins and may be paving the way for other companies to acquire the crypto asset in 2025. Among institutional investors, acceptance is occurring even among the most conservative, such as pension funds. In addition, the divergences between Jamie Dimon's statements and J.P. Morgan's actions send a clear signal to investors that the acceptance of Bitcoin is inevitable. The computing power is surprisingly robust, and investment flows into Bitcoin ETFs have far exceeded those into gold ETFs. This definitely corroborates the thesis of buying Bitcoin.
