Bitcoin surged above the $100,000 mark for the first time in 2025, reaching a high of $101,192 before pulling back slightly. This marks a significant rebound after a period of volatility, which saw Bitcoin trading below $100,000 for nearly three weeks, including a sharp 5.6% drop on Dec. 18, 2024. Although it has yet to reach its all-time high of $108,135, the move signals growing optimism in the market despite a mixed sentiment following the Federal Reserve’s December meeting.

Crypto shares also shined on Wednesday. Riot Platforms jumped 10%, Coinbase Global, Inc. gained 8%, MicroStrategy jumped 5%.

The crypto market, as well as broader equities, faced a sell-off after the Fed decided to revise its outlook on interest rate cuts. However, analysts are forecasting a recovery in early 2025, with Bitcoin seen as navigating a tactical trading range. Research firm 10x noted that while a straightforward bullish trend may not materialize, there are opportunities for strategic positioning.

Institutional interest in Bitcoin remains strong, with MicroStrategy purchasing 1,020 BTC and KULR Technology Group adding $21 million worth of Bitcoin to its treasury. These moves highlight the growing demand for the digital asset, evidenced further by $908 million in inflows into spot Bitcoin ETFs. Despite this, analysts caution that volatility will likely continue, with the market primarily driven by spot buying rather than leverage.

Bitcoin's price surge is also buoyed by the potential impact of President-elect Donald Trump's proposed Bitcoin reserve. This plan would involve the U.S. government retaining its current Bitcoin holdings, estimated at 210,000 BTC, and potentially acquiring more. Trump's upcoming inauguration on Jan. 20, 2025, could shift market sentiment, particularly if the U.S. government becomes more active in acquiring Bitcoin.

Metaplanet Inc., a venture capital firm based in Japan, has also seen significant growth in its Bitcoin holdings. It plans to increase its BTC holdings by 470% in 2025, aiming for 10,000 BTC as part of its ongoing strategy to expand its Bitcoin treasury. The company, which has been accumulating Bitcoin since April 2024, has reinforced its position as a key player in the Asian Bitcoin market.

While the overall outlook for Bitcoin remains positive, concerns linger about the Federal Reserve's future actions. According to 10x Research, the primary risk to the market is the Fed’s communication on inflation and interest rates, which could cause fluctuations in Bitcoin's price. Even as the market recovers, experts warn that it may take time for the Fed to shift its stance if inflation remains a concern.

As the year progresses, Bitcoin’s performance will likely be shaped by both market dynamics and political developments, especially with Trump's proposals. The next few weeks will be crucial in determining the trajectory of Bitcoin and the broader crypto market for 2025.