On Jan. 10, the cryptocurrency’s spot price dipped below $93,000 after a stronger-than-expected U.S. jobs report lifted the U.S. dollar, dampening investor sentiment.

“Bitcoin appears restrained by the strengthening U.S. dollar, which has been bolstered by hawkish Federal Reserve policies and ongoing tariff concerns,” Pandl explained in a statement to Cointelegraph. He added, “The robust job data has lowered expectations for near-term interest rate cuts, providing further support for the dollar and creating temporary downward pressure on Bitcoin’s price.”

The U.S. Dollar Index (DXY) saw a 0.5% increase in morning trading on the same day, reflecting heightened confidence in the greenback. Additionally, data from CME FedWatch shows that market participants now estimate less than a 3% probability of a January interest rate cut.

Potential Catalyst: Presidential Inauguration

Despite the macro challenges, Pandl remains optimistic about Bitcoin’s long-term prospects. He highlighted the upcoming U.S. presidential inauguration on Jan. 20 as a potential catalyst for positive market movement.

Crypto vs. traditional assets: Bitcoin’s performance at a glance. Source:Grayscale

“With the inauguration right around the corner, this macroeconomic setback could be short-lived. We still maintain a structurally bullish outlook for crypto valuations,” Pandl noted.

The inauguration marks Donald Trump’s return to the White House after his victory in the November 2024 presidential election. Trump has pledged to prioritize the U.S. cryptocurrency sector, appointing crypto-friendly regulators and positioning the U.S. as a global leader in digital asset innovation.

Institutional Inflows and Regulatory Momentum

Apart from Grayscale, other market analysts are as bullish about the year 2025 for Bitcoin, with Steno Research projecting new all-time highs for the cryptocurrency. It describes the setup as an “unprecedentedly favorable regulatory environment.” Institutional adoption could also surge significantly under the new administration.

Bitcoin’s price tracking aligns with previous bull market trends. Source:Grayscale

U.S. Bitcoin ETFs finally reached over $100 billion in net assets for the first time in November 2024, according to Bloomberg Intelligence. The funds could attract another $48 billion of inflows in 2025 alone, say analysts, which could provoke a demand shock that sends the cryptocurrency higher.

Meanwhile, Sygnum Bank, a Swiss-based digital asset manager, also expects surging institutional demand and thinks such inflows will keep driving up the value of Bitcoin throughout the year.

Grayscale’s Projections for 2025

Grayscale has recently updated its list of the top tokens to watch in 2025, considering a possible regulatory shift given the outcome of the US election. A token to watch is Ripple’s XRP, which has been the top-performing crypto asset over the last 90 days. Among many other factors, this is expected to contribute to the strengthening investment case of cryptocurrencies, the firm says.

Bitcoin (BTC) price chart (yearly). Source:Bitcoin Liquid Index (BLX) via Brave New Coin

While  short-term fluctuations are inevitable, analysts underscore that the resilience of Bitcoin is in its ability to weather macroeconomic volatility while capitalizing on long-term trends.

Longer-term prospects are still very much strong for Bitcoin, with supportive regulatory development and increased interest by institutions on deck, while the extremely strong macro-economic forces have faced some temporary setbacks. With the coming U.S. presidential inauguration and further improvements in space, 2025 could be a very good year for Bitcoin.