Since Donald Trump won the presidential election on November 5, Bitcoin (BTC 0.11%) was absolutely on fire. The world’s most popular cryptocurrency is now up 40% over the past two weeks and appears to be hitting a new all-time high not only every day, but every hour. It is now trading around $98,000, just a stone’s throw from the psychologically important $100,000 price level.

So, to what extent can we Bitcoin go? Much higher than you think. Pro-crypto optimism surrounding the Trump presidency is gaining momentum and investors are likely to revise their price forecasts for Bitcoin upwards as we approach 2025. Let’s take a closer look.

Trump’s pro-crypto plans

The so-called “Trump trade” is essentially a bet that many of the pro-crypto promises Trump made during the election campaign will actually materialize once he becomes president. These include creating a cryptocurrency-friendly regulatory environment for the United States (including the firing of current SEC Director Gary Gensler), new support for Bitcoin mining the industry and the creation of a strategic Bitcoin reserve.

While all of these measures could help drive up the price of Bitcoin, one that particularly stands out is the creation of a strategic Bitcoin reserve. As U.S. Sen. Cynthia Lummis (R-Wyo.) is currently considering, this would commit the United States to purchasing 1 million Bitcoins over the next five years, or about 200,000 Bitcoins per year.

Another variation – proposed by Robert F. Kennedy Jr. earlier this year – calls for the U.S. government to purchase 550 Bitcoins every day until it amasses 20% of the total circulating Bitcoin supply.

Image source: Getty Images.

Of course, all this buying pressure is going to push Bitcoin higher. And this is especially the case if other countries also begin to view Bitcoin as a national strategic priority. What if, for example, China or Russia started buying Bitcoin? What if Middle Eastern sovereign wealth funds started buying Bitcoin? This could lead to a Bitcoin “arms race” of global proportions.

Bitcoin ETF Entries

And don’t forget the spot Bitcoin ETFs. Throughout the year, these factors have been one of the main reasons for Bitcoin’s skyrocketing gains. As soon as they officially launched in January, money started pouring in. The largest of these new spot Bitcoin ETFs, the iShares Bitcoin Trust (IBIT 1.05%)has now accumulated over $40 billion in assets under management. For comparison, it is now more than the iShares Gold Trustwhich has existed for almost 20 years.

We could just start here. After all, the biggest buyers of spot Bitcoin ETFs so far have been hedge funds and large Wall Street firms. The next stage will be risk aversion institutional investors – like pension funds and endowments – which previously viewed crypto as too risky. Right now, they may only be willing to allocate 1% of their total portfolio to Bitcoin. But over time, this percentage could gradually increase.

So this is another major source of potential new buying pressure as we approach 2025. Higher Bitcoin prices lead to more hype around Bitcoin, which attracts more investors, which drives up the price of Bitcoin, which leads to more hype… Well, you get the idea. It’s a huge positive feedback loop. As long as the price of Bitcoin continues to rise, no one will question it.

Prepare to buy the dip

But maybe people should ask some questions. After all, as soon as Bitcoin crosses the $100,000 level, there could be a strong pullback. There will almost certainly be some profit taking.

So, are crypto bulls too bullish on Bitcoin right now? At the very least, we should ask questions about the Trump administration’s economic plans. Will the planned introduction of tariffs on US goods – and the risk of rising prices – be good or bad for Bitcoin? Can Trump’s team really succeed in creating a strategic Bitcoin reserve?

The good news is that a decline in the price of Bitcoin could actually turn out to be positive if you missed Bitcoin’s extraordinary 130% year-to-date gains. That’s because it might give you one last chance to buy the dip.