OKLAHOMA CITY -- Some experts believe Bitcoin is poised for another surge in 2025, but should Oklahomans invest?
Bitcoin nearly hit $100,000 for the second time this month on Christmas, and the digital currency has seen an annual increase of more than 130% in 2024, up from $43,638 one year ago, according to Chaincatcher. The total holdings of Bitcoin exchange-traded funds (ETFs) reached 11.2006 million BTC this month, with a strong annual growth of nearly 81%
So, is it the right time for Oklahomans looking for additional investments to take a chance with Bitcoin? Matthew Sigel, head of digital assets research for Van Eck, an investment management firm that offers ETFs, mutual funds, and separately managed accounts, seems to think so. He told finance journalist Natalie Brunell on her podcast Coin Stories he expects another big year for Bitcoin in 2025.
Sigel bases his prediction on a four-year cycle tied to Bitcoin halving events. According to Investopedia, a Bitcoin halving event occurs about every four years when the reward for mining is cut in half. He said the trend indicates that after the most recent halving event in April, 2025 should be a strong year, and 2026 could be a down year.
"When we look at the trough to the peak in each of those four-year cycles, each cycle gets a little bit smaller. The smallest ever trough to peak appreciation for Bitcoin was 2,000% so let's say that we cut that in half and say it's going to be 1,000% this cycle," Sigel said. "Bitcoin troughed around $18,000, so I see an upside to $180,000 this cycle, and I think that's likely to happen next year."
Sigel and Former CNBC Chief Economist Marci Rossell describe Bitcoin as a volatile asset. During a keynote speech in Oklahoma City earlier this month, Rossell cautioned Oklahoma business leaders that Bitcoin was trading at about $20,000 two years ago, and while gains can be huge, it's essentially a speculative investment.
In addition to cycles, the Bitcoin price fluctuates because it's influenced by supply and demand, government regulations and investor sentiments. Rossell said if someone looking to invest isn't comfortable with big swings, the digital currencies market probably isn't for them.
With that risk in mind, regulatory changes and a subsequent increase in demand could mean an increase in value in 2025, Rossell said, prefacing her prediction that moving forward, Bitcoin is likely to be regulated like a commodity as opposed to a stock, resulting in more demand.
The SEC has staked its claim on regulating digital currency to the extent that Oklahoma AG Drummond and a coalition of 17 other state attorneys general filed the litigation in the U.S. District Court for the Eastern District of Kentucky last month. The lawsuit comes during a time when about one in five Americans have acquired a digital asset, according to a release from Drummond's office.
The AGs argue the SEC has overstepped its authorization from Congress and see the attempt to classify digital currencies as investments to be overreaching and unnecessary.
"We should be encouraging this vibrant, new digital asset industry for its ability to innovate, create jobs and make financial services more accessible for millions of Americans," Drummond said in a statement last month. "This regulatory overreach by the Biden Administration means to reach into the wallets of hardworking Oklahomans, and we will oppose it vigorously."
President-elect Donald Trump appears to be on the side of the AGs. Earlier this month, Trump chose former SEC Commissioner Paul Atkins to lead the agency. In a social media post, Trump said Atkins recognizes that digital assets are "crucial to making America greater than ever before."