Bitcoin (BTC, $104,670) started 2025 on a strong note, gaining 13.5% in the first 30 days. This price surge reflected a major shift in the United States government’s stance, becoming more favorable toward the sector. However, Bitcoin’s price has since been capped at $105,000, prompting traders to question the reasons behind the stall. The conditions for a continued Bitcoin bull run are in place, but three key factors are preventing a new all-time high. Under the Trump administration, opportunities are increasing for banks and hedge funds to hold digital assets without affecting their balance sheets. In a press conference on Jan. 29, US Federal Reserve Chair Jerome Powell addressed the issue, stating that banks are “perfectly able to serve crypto customers,” as long as they manage the associated risks, and emphasizing that the Fed is “not against innovation.”
On Jan. 30, the Czech National Bank’s board approved a proposal to consider Bitcoin investments as part of its international reserve management strategy. CNB Governor Aleš Michl further revealed in an interview with the Financial Times that the bank intends to allocate up to 5% of the country’s €140 billion reserves to Bitcoin. Additionally, Bitcoin’s price momentum received a boost from a Jan. 30 announcement by a fund managed by the Norwegian Central Bank, which disclosed $500 million in investments in MicroStrategy shares. It’s noteworthy that some funds face regulatory hurdles or require shareholder approval to purchase Bitcoin directly via spot exchange-traded funds (ETFs), which is why they opt to invest in US-listed companies like MicroStrategy as a proxy.
Global Economic Slowdown, AI Bubble, and Slow Institutional Adoption
Despite the favorable news, Bitcoin’s price has struggled to break above the $106,000 threshold. Analyzing the reasons behind investor caution is key to understanding when a new all-time high for BTC could occur. Traders are concerned that the ongoing global economic slowdown could trigger a “flight to quality,” where investors shift toward cash and short-term government bonds as safe havens.
The US GDP grew by 2.3% in Q4 2024, slightly below market expectations, while the eurozone economy posted zero growth during the same period, according to data released on Jan. 30. The lack of growth is likely to push central banks to inject stimulus, which could benefit Bitcoin’s price in the medium term. However, traders are wary of the short-term negative effects that could weigh on Bitcoin’s price. Additionally, the recent launch of a low-cost AI chatbot by Chinese startup DeepSeek has shocked the industry, resulting in record-breaking stock losses. This has led traders to reassess the fragility of the tech sector. Although the AI developments have no direct impact on Bitcoin, they have reduced investor risk appetite, with hedge funds scaling back exposure to assets that have seen significant gains—Bitcoin included, as it outperformed many sectors. While the Trump administration is dismantling Operation Choke Point 2.0, which restricted financial institutions’ involvement with digital assets, banks are unlikely to fully embrace Bitcoin just yet. Clearer accounting and risk management rules are needed, as well as the approval of in-kind ETFs to better integrate Bitcoin with traditional financial markets. Until these three conditions—clearer regulations, the approval of in-kind ETFs, and broader institutional adoption—are met, Bitcoin’s upside above $105,000 may remain limited. However, further adoption by institutional players, especially nation-states, could help propel Bitcoin’s price to new heights.
Conclusion
Bitcoin’s rally above $106,000 has shown strong momentum, but for it to surpass its all-time high, three critical factors must align: clearer rules for banks and hedge funds around digital assets, the approval of in-kind ETFs, and greater institutional adoption. The broader economic context, including the global slowdown and emerging risks like the AI bubble, also plays a significant role in Bitcoin’s price movement. As these conditions evolve, Bitcoin could see substantial gains, particularly with further adoption from global financial institutions and governments.
FAQs
Why is Bitcoin’s price stagnating below $106,000?
While Bitcoin has had strong momentum in 2025, its price is currently capped at $105,000 due to factors such as economic uncertainty, slower institutional adoption, and the need for clearer regulations around digital assets.
What actions are required for Bitcoin to reach new all-time highs?
Three key factors need to align for Bitcoin to break new highs: clearer accounting and risk-calculation rules for digital asset custodians, approval for in-kind ETFs, and more widespread institutional adoption, especially from nation-states.
How does the global economic slowdown impact Bitcoin’s price?
The global economic slowdown may trigger a flight to quality, where investors move into cash and short-term government bonds. While stimulus measures may eventually benefit Bitcoin, short-term fears could put downward pressure on its price.
What is the significance of the AI bubble for Bitcoin?
The recent launch of a new low-cost AI chatbot by DeepSeek has caused a loss in investor confidence in the AI sector. As Bitcoin has outperformed many sectors, hedge funds have reduced their risk exposure, which may have temporarily impacted Bitcoin’s momentum.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
My work centers on understanding how blockchain, AI, and digital identity are reshaping global industries. At Spearmint, I help lead the direction of initiatives that bring clarity, structure, and meaningful user experiences to complex technological environments. I focus on bridging vision with execution, ensuring that innovation remains practical, scalable, and aligned with long-term growth.
As an author at Coinography, I create insights that translate fast-moving Web3 developments into clear, useful narratives. I explore topics such as decentralized governance, digital identity, creator economies, token models, protocol design, and the shifting cultural patterns around emerging technology. My aim is to make digital transformation more understandable and approachable for a wider audience.
I believe that Web3 is not only a technological shift but a cultural and creative one. Strong ideas, thoughtful communication, and human-centered design will shape which technologies thrive and how communities evolve around them. My writing and research reflect this belief, focusing on clarity, relevance, and long-term perspective.
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