Another decline in the cryptocurrency market in early February 2025 has led members of the crypto community to doubt that Bitcoin will be able to reach a new all-time high anytime soon. Representatives of the crypto industry shared their arguments for and against the further growth of BTC on social media.
We’ll discuss the factors that, according to crypto investors, could drive the crypto market to further growth, and those that could accelerate its decline.
Arguments for Further Growth
Press Conference of “Crypto Tsar” David Sachs
David Sachs, appointed as “crypto tsar” by the Trump administration, outlined key areas of work for the new US president’s administration regarding the crypto industry during his press conference. He spoke about plans to evaluate the idea of creating a Bitcoin reserve in the US. Additionally, measures were announced to form transparent rules for regulating the crypto industry, which should help keep companies in the domestic market and prevent situations like the FTX exchange collapse.
Payments on FTX’s Obligations
The expected payments on the obligations of the collapsed FTX crypto exchange, which are due in the next two weeks, could play a crucial role in restoring confidence in the market. Removing uncertainty could create conditions for crypto growth. Stabilization of the situation around FTX would allow market participants to act with more confidence.
The Trump Family’s Interest in Ethereum
The active promotion of the second-largest cryptocurrency, Ethereum (ETH), by Donald Trump’s son, Eric, is attracting investors’ attention. Many believe that the Trump family’s interest in the coin could be a precursor to its rapid growth. The inflow of capital into the popular crypto from well-known personalities positively impacts the general mood of market participants.
Delay of New Tariffs on Imports to the US
Negotiations are underway with the authorities of several countries regarding the postponement of the implementation of new tariffs on imports to the US. Recall that Trump’s initiative had a negative impact on the crypto market. An overview of why this happened was shared in a separate review.
The delay of these measures could reduce their negative impact on the global economy and the crypto industry. Diplomatic activity in this direction reduces uncertainty and supports the position of cryptocurrencies at the international level.
New ETFs and Inflow of Institutional Investments
The launch of new exchange-traded funds (ETFs) for Bitcoin and Ethereum, as well as significant capital inflows from financial giants such as BlackRock and Ark, indicates growing interest from institutional investors in cryptocurrencies. These instruments make the market more accessible to a wider range of participants.
Decrease in Borrowed Capital
A reduction in the level of borrowed capital helps reduce market volatility. When investors reduce their leveraged positions, the risk of sharp fluctuations decreases, which creates a more stable foundation for growth. Investors begin to focus on fundamental expectations rather than short-term emotional decisions.
Arguments for Further Decline
Trump’s Trade War
Attempts to negotiate the postponement of new tariffs on imports to the US may not succeed. For example, China has already proposed retaliatory measures that could escalate tensions between the US and China.
New tariffs could also affect goods from the European Union. The introduction of such measures could negatively impact the global economy, which would raise concerns among investors and lead to capital outflows from crypto markets.
Trump’s Unpredictability
Unpredictable and provocative comments from an influential politician can amplify market panic. Such statements could lead to a short-term decrease in demand for cryptocurrencies.
Panic Risks
The general state of anxiety among investors puts pressure on the market. Experiencing fear and uncertainty, members of the crypto community may prefer to sell their assets, which leads to sharp fluctuations and price declines. Panic can intensify short-term corrections.
Slow Recovery of Altcoins
The recovery of altcoins after major market disruptions is happening more slowly than expected. Altcoins depend on the overall mood in the sector, and even with a positive perception of Bitcoin, their dynamics may remain sluggish. This situation creates imbalances in investors’ portfolios and negatively affects the overall market evaluation.
Conclusion
Positive news from institutional investors, initiatives for regulating digital assets, and diplomatic efforts may contribute to the growth of the crypto market. Negative factors, including Trump’s trade war, political unpredictability, and negative sentiment among participants, could trigger short-term corrections. As of early February, positive factors outweigh the negative.