Bitcoin rose sharply in 2025. This is thanks to loose federal regulations and optimism in the market. However, cryptocurrencies do not have the immunity to major falls.
President Trump establishes a Bitcoin reserve – this is what it means
President Trump has signed an executive order establishing preparations for Bitcoin, which the government already owns.
Cryptocurrency prices have skyrocketed over the past year. The federal government has taken a softer approach to regulation, and investors have become optimistic (and a little speculative) about their investments. Bitcoin Price (Cryptography: BTC) It has similarly risen, surged by 76% over the past year alone.
There is a general sense of optimism among investors with both stocks and cryptocurrency, but if a more severe economic situation comes first, some of the massive returns they have experienced could go through a reversal. Bitcoin has proven to be a resilient cryptocurrency in the past, bouncing back after a massive pullback. Is it still worth buying Bitcoin under $120,000? This is what investors should know.
Why Bitcoin prices continue to rise
Bitcoin began its recent rise after President Trump took office late last year. The first bump probably came as crypto investors expected the Trump administration to have a better advantage over cryptocurrency.
They weren’t wrong. Since taking office, Trump has repeatedly regulated cryptocurrency, announced a strategic Bitcoin sanctuary, dropped several lawsuits against the cryptocurrency company, and launched his own memecoin. These developments are not necessarily good, but they have contributed to rising crypto prices, including Bitcoin.
More importantly, Bitcoin is gaining momentum as the coin has received a wider institutional acceptance. Over the past year, almost 12 spot Bitcoin exchange funds (ETFs) have been launched, making it possible for investors to easily invest in changes in Bitcoin prices. Now, as large financial institutions sell stocks in Bitcoin ETFs, Bitcoin has a new level of reliability in the investment world.
Why Bitcoin is pulled back soon?
With around 76% price increases over the past year, there are some concerns that Bitcoin (and the general cryptocurrency) is currently a bit bubbly. For one, as investors have shown resilience in the past few years, they have pushed Bitcoin high as part of the general optimism in most investments, including the stock market.
However, there have been some recent indications that the economy may be slowing down. The revised employment numbers for May and June were much lower than previously thought, and employment in July was slower than expected.
Also, many economists are concerned that the effects of Trump’s tariffs will ultimately be felt by consumers if more companies start to pass on additional costs to their customers. If that happens, it could slow down consumer spending at the same time as businesses slowing down employment. By combining these two things, it slows the growth of the economy and allows investors to move away from high-risk investments like Bitcoin.
Is this the best time to buy Bitcoin?
I think it’s fine to invest in Bitcoin only if your portfolio can handle a significant amount of volatility.
With Bitcoin prices skyrocketing over the past year, if you get truly negative economic data, it could be primed for a dramatic pull. Cryptocurrencies are prone to dramatic price fluctuations, so another bad employment report, rising inflation, or ongoing tariff news could quickly reduce the value of Bitcoin.
But if you don’t mind the risk, Bitcoin will become a good code for long-term retention. With acceptance by many financial institutions and the launch of Bitcoin ETFs, it is easier than ever to invest in Bitcoin price movements, which could help to strengthen Bitcoin investors’ acceptance for the next few years.
Chris Neger has no position in any of the stocks mentioned. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
The Motley Fool is a partner at USA Today, providing financial news, analysis and commentary designed to help people control their financial lives. The content is produced independently of USA Today.
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