Cryptocurrency is in the news every day. Thanks to its volatility and the relative lack of regulation around digital assets, it’s not surprising that a lot of investors might be wondering: Is Bitcoin a good investment in 2025?
If you’ve been following news about Bitcoin, then you won’t be shocked to hear that there are a lot of considerations you’ll need to keep in mind to answer that question to your satisfaction.
Market conditions in the United States and abroad are constantly evolving. That’s the case any time technology makes a leap, and that’s certainly been the case with the evolution of blockchain technology, digital coins, NFTs, bitcoin etfs, and smart contracts.
Regulation is also an issue, with the SEC and FINRA continuing to grapple with how to regulate cryptocurrencies and Bitcoin transactions. Many of these decisions are being made in the courts.
So, in this guide, we’re going to walk you through everything you need to know about Bitcoin as an investment, including its history, performance, market sentiment, regulatory challenges, and tips for buying Bitcoin if that’s something you want to invest money into.
Historical Performance Analysis
Bitcoin was the first decentralized currency. There are now many others, including Ethereum, Solana, Cardano, Dogecoin, Litecoin, and hundreds of others. Bitcoin was invented by Satoshi Nakamoto (a pseudonym) in 2008 and launched as a currency in 2009.
In the early days of its existence, Bitcoin was worth very little and the only way to obtain it was by mining. Today, it’s possible to buy and trade Bitcoin and other decentralized currencies on crypto exchanges, including Coinbase.
Bitcoin price trends are illustrative of one of the overall challenges of cryptocurrency as an investment: risk tolerance, it’s extreme volatile. While all investments experience price changes, Bitcoin’s history has been a true rollercoaster ride, as you can see from this chart.
It’s undeniable that the overall trend of Bitcoin is up. Even so, there have been some huge market swings and getting in or out at the wrong time has led to some disastrous losses for Bitcoin investors. Here are a few notable moments in Bitcoin market behavior.
- February, 2011: Bitcoin’s value surpasses $1 for the first time
- 2013: Bitcoin’s price surges over $100
- 2014: Mt. Gox, one of the world’s biggest Bitcoin exchanges at the time, collapses, leading to a collapse in Bitcoin’s price
- 2017: Bitcoin ends a historic bull run, topping out at just under $20,000
- 2018: A significant downturn sends Bitcoin’s price plummeting by 70%
- 2020: Near the beginning of the COVID-19 pandemic, Bitcoin’s price dropped again to under $4,000
- 2021: Near the end of the year, there was a major cryptocurrency crash that reduced Bitcoin’s price from over $70,000 to about $15,000.
As we near the end of 2024, Bitcoin has been on a historic run. At the end of November, its price topped $100,000 for the first time and has continued to climb. As of the third week in December, the price sits just over $106,000.
Pro Tip:
Sign up today and get $50 of BTC for free after making your first trade on Coinbase!
Factors Influencing Bitcoin’s Value in 2025
Bitcoin had a record year in 2024, reaching an all-time high and surpassing $100,000 for the first time. Given the coin’s volatility, there are many factors that could impact its value in 2025.
- The United States economy has recovered from the COVID-19 pandemic much faster than most of the rest of the world, which partly explains Bitcoin’s rise. That said, there are still a lot of question marks, including the impact of a second Trump presidency. If the economy were to experience a significant downturn, it could take Bitcoin with it, while an economic boom might have the reverse effect.
- Supply and demand play a role in the value of every commodity. In 2024, there was no shortage of people eager to claim a stake in Bitcoin. The wide availability of fractional shares on crypto platforms such as Coinbase and Kraken has made Bitcoin more accessible than ever before, and that’s a trend that may continue. The supply of newly-minted Bitcoin has shrunk thanks to the halving of its block subsidies. While Bitcoin itself may be difficult to obtain, there’s also a rise in Bitcoin spot ETFs. Bitcoin supply and demand should continue to impact the coin’s value.
- Bitcoin was the world’s first cryptocurrency and exists on the world’s first blockchain. Many companies are engaged in research about the best ways to use blockchain technology. It’s possible that tech advancements could positively or negatively impact the value of Bitcoin in 2025.
Bitcoin economic factors such as these will continue to impact Bitcoin’s value, although there’s no way to predict exactly how these things will play out; a high risk tolerance is certainly necessary.
One prediction is getting a lot of attention. Tom Lee of Fundstrat Global Advisors correctly predicted that Bitcoin would top $100,000 in 2024, and he believes that it may reach $250,000 by the end of 2025.
Regulatory Impact on Bitcoin’s Viability
The issue of regulating Bitcoin and other cryptocurrencies is one that has loomed large with crypto investors and enthusiasts. Here’s our overview of BItcoin regulations 2025 may bring.
In the United States, several cryptocurrency exchanges have been subjected to fines and other penalties when they have failed to adhere to regulations. Here are a few examples.
- Digital trading platform eToro was forced to shut down nearly all of its crypto trading when the SEC determined the company had failed to register under federal security laws.
- Coinbase is engaged in an ongoing suit with the SEC, which has claimed that Coinbase is operating as a broker but not adhering to SEC rules that apply to brokerages.
- Robinhood was fined by the SEC in 2021 and is engaged in other ongoing litigation regarding its regulatory duties.
Nations and your financial advisor both are in the process of working out how and when to regulate cryptocurrencies.
It’s not surprising that crypto exchanges are fighting back. The nature of cryptocurrencies is to be decentralized, which does—at least in theory—make them different from other asset classes such as stocks and bonds.
| United States | European Union | Canada | |
| Legal? | Y | Y | Y |
| Registration required? | Y, when crypto transactions are considered securities or money transactions | Y, authorization is required to operate in the EU | Y, all crypto exchanges must register with FINTRAC |
| Anti-money laundering laws in place? | Y | Y | Y |
| Laws preventing the use of crypto to finance terrorism in place? | Y | Y | Y |
| Consumer protection laws in place? | Y, via executive order | Y | Y |
Canada was the first country in the world to regulate cryptocurrency and is 19th in the world in crypto adoption. The United States is fourth in adoption.
It’s important to note here that the adoption of regulations is very much an ongoing process and things may change. A case in point is the US adoption of consumer protection laws around cryptocurrency, which was put in place via an executive order signed by President Joe Biden and could be undone by a future executive order if not properly legislated.
Tech advances may also impact crypto regulations. Google recently announced its development of the Willow quantum computing chip, which is reported to have the potential to break cryptographic algorithms like the ones used to secure blockchains. That’s something that has raised concerns about crypto security and could have significant cryptocurrency regulation impact in 2025.
Pro Tip:
Sign up today and get $50 of BTC for free after making your first trade on Coinbase!
How U.S. Rules Are Shaping the Future of Crypto and Blockchain
The next four years may bring a lot of changes related to cryptocurrencies and blockchain technology. In his first term, Donald Trump took some action to protect so-called “little tech” companies, including blockchain and Web3 startups.
Since the election, Trump has continued to send strong signals that his next administration will be favorable to crypto concerns. He appointed pro-crypto Paul Atkins to head up the SEC and Gail Slater as head of the Antitrust Division at the Department of Justice (DOJ), both moves that point in the direction of creating a climate where blockchain and crypto can thrive.
One of the biggest concerns has to do with antitrust considerations. Blockchain technology has the potential to be massively disruptive across multiple industries. There’s concern that a failure to rein in attempts by companies that already have a monopoly in their industries to shut down competition could have an outsized economic impact.
President Biden signed an executive order empowering the Department of Justice and Federal Trade Commission to examine how digital asset growth might impact competition. It remains to be seen whether Trump’s anticipated moves could impact the growth of cryptocurrency during his second term.
Investment Strategy and Risk Management
Whether you already own some Bitcoin or you’re eager to start buying it, it’s important to understand the risk management strategies that can help you with your investment.
It all starts with diversification. Cryptocurrencies like Bitcoin are highly volatile and it’s essential to balance your portfolio by investing in other asset classes with lower risk. These may include stocks, ETFs, bonds, mutual funds, commodities, Forex, and more.
We don’t say this to discourage you from buying Bitcoin. There’s a lot of reason to believe that cryptocurrency will continue to be an economic force. Having some digital assets in your portfolio is a good idea. Here are some Bitcoin investment strategies to help with managing Bitcoin investment risks.
- Don’t buy more crypto than you can afford to lose, especially when you’re starting out. Crypto’s high volatility can lead to significant losses if you’re not careful. This is also known as position resizing. Never risk more than 1%-2% of your total capital in a single trade.
- Portfolio diversification is a must when you’re investing in crypto. Your portfolio should contain a mixture of stocks and ETFs, bonds, mutual funds, cryptocurrencies and other digital assets, and commodities. You may also want to add things like futures and Forex.
- Portfolio rebalancing is something you’ll need to do on an ongoing basis. It’s a process that protects you from having too much of your portfolio in any one asset or asset class. As a rule, you shouldn’t have more than 10% of your holdings in crypto at any one time.
- Use stop-loss and take-profit orders to minimize losses and maximize your gains. A stop-loss will automatically sell a digital asset if it dips below the price you specify, and a take-profit will automatically sell it to take advantage of significant gains.
- Don’t engage in margin trading, future trading, or other risky behaviors unless you’ve educated yourself and are sure what you’re doing.
In addition to these trading and portfolio management rules, we also recommend that you keep any digital assets you own in a cold crypto wallet. A cold wallet is one that is never connected to the web and is typically held on hardware that you have in your possession. Never share your password or login information with anybody else.
Pro Tip:
Sign up today and get $50 of BTC for free after making your first trade on Coinbase!
Comparing Bitcoin with Other Investment Options
Before you jump in and start investing in Bitcoin, let’s look at some of the benefits and risks of Bitcoin vs traditional investments and Bitcoin vs other cryptocurrencies.
We’ll start with traditional investments such as stocks and ETFs.
| Stocks | Cryptocurrencies | |
| Definition | A fractional share of a business that’s backed by the assets of the business. | A digital asset that usually has no backing (some stable coins are exceptions) where value is determined by what people are willing to pay. |
| Pricing Factors | Company financials and analysts’ predictions about the future value of the company. | Buyer sentiment and speculation. |
| Success Factors | The company performs well over time. | The market must be optimistic for people to be willing to pay more for crypto than you paid for it. |
The overall trend of the stock market is up, which means that investors can usually ride out volatility if they don’t panic. The overall trend of Bitcoin is also up, but it has experienced some huge downturns of a size that’s atypical for stocks.
We would say that, on the whole, Bitcoin is a better and more reliable investment than other cryptocurrencies. It’s still volatile, but usually less so than other crypto coins. Its longevity and name recognition make it the cream of the crop Ethereum, Solana, Cardano, and Dogecoin have also proven themselves. If you want portfolio diversification with lower risks, you might explore stable coins, which get their value from the US dollar and other fiat currencies while still being digital assets.
Final Verdict: Is Bitcoin a Good Investment for 2025?
Bitcoin is a long-established cryptocurrency that has proven to be valuable for investors who have been willing to ride out its volatility. That said, there are still question marks around what will happen with Bitcoin in the future. Key considerations include overall economic factors, regulation, and new technologies that may impact blockchain security.
Our overall verdict is that Bitcoin can be a good investment if you follow our tips about how to keep your digital assets secure and minimize your risks. We’d suggest buying only what you can afford to lose, keeping in mind that many crypto exchanges allow for the purchase of fractional shares. Store your Bitcoin in a cold wallet and make sure that portfolio diversification and rebalancing are both part of your ongoing crypto investment strategy.
FAQs
Investors should know that Bitcoin (and other cryptocurrencies) are more volatile and therefore riskier than traditional investments such as stocks, ETFs, bonds, and mutual funds. They should also be aware of the ever-evolving regulatory landscape and keep an eye on changes, especially after Trump takes office in January.
Bitcoin has the potential to deliver huge profits, but that depends on what people are willing to pay for it. Because it has a longer history, Bitcoin has often been less volatile than other cryptocurrencies that are less established. Its current high value of <$100,000 may mean that it has less growth potential, but some people believe its value could top $250K in 2025.
There are several risks to be aware of before you invest in Bitcoin in 2025. First, cryptocurrencies such as Bitcoin tend to experience far more volatility than other investments. It’s important to take a long view and not panic if there’s a crash. It’s also important to engage in proper diversification and not overrepresent Bitcoin in your portfolio. Finally, investors should keep an eye on regulatory and security news to make sure they stay on top of changes that could impact their Bitcoin investments.
