Although there’s been some weakness in growth stocks the last few weeks, December has also seen a handful of all-time highs and psychological barriers broken.
Notably, the Nasdaq Composite breached the 20,000 level for the first time ever on December 11, and Bitcoin broke through $100,000 about a week prior on December 5, trading as high as $103,000 per token before giving back some of those gains.
Given the combination of weakness in the more speculative market leaders, elevated sentiment among investors (Investor Intelligence Bull/Bear ratio is near the 4 level, which typically precedes a pullback), and the furious rally of the last two years, it’s certainly possible that we’re seeing a short-term market top.
And a top in equities is highly likely to coincide with a top for Bitcoin.
After all, Bitcoin’s most reliable performance correlation is with that of high-growth equities.
Should that pullback materialize, investors should look for support near Bitcoin’s prior highs in the low 70s.
But, should the bull market continue into the new year, it’s worth considering how high Bitcoin can realistically rise.
Unlike equities, Bitcoin does not have earnings that you can extrapolate forward to set a price target.
That said, there are numerous models available, with varying degrees of success, that one can use to make projections.
So, let’s take a look at two of those models, and what they say about how high Bitcoin could move in 2025. (Full disclosure, making predictions is notoriously a fool’s errand, but it’s also an interesting mental exercise.)
Bitcoin Price Prediction Models
Bitcoin Stock-to-Flow Model
The Stock-to-Flow Model is a Bitcoin pricing model that effectively treats the cryptocurrency as a limited real asset like gold or oil and estimates price based on the number available in the market relative to the number being produced each year.
It was an oft-used (although highly criticized) model for early Bitcoin advocates and, as you can see in the chart below from Bitcoin Magazine Pro, its track record is mixed.
In 2017, when Bitcoin was trading above $19,000, the Stock-to-Flow Model estimated a price of only $3,900.
By that same token, in December 2022, when the model estimated a price of $48,000, Bitcoin itself was trading for only $16,500.
So, while directionally the model has generally been accurate, the actual price varies wildly.
At the end of the first quarter of 2025, Stock-to-Flow estimates that Bitcoin should be worth approximately $360,000 per token.
Bitcoin Rainbow Chart
The other model we’ll look at today is the Bitcoin Rainbow Chart, which builds a range of possible outcomes around a logarithmic growth curve.
The Rainbow Chart has been around since 2014 but, given that it’s based entirely on assumed logarithmic growth, it’s considered something of a “meme” chart.
That said, given how heavily sentiment-driven Bitcoin is, it’s hard to make a case that any pricing model is “better” than any other best-fit (chart matches the data points) model.
At the end of the first quarter of 2025, the Rainbow Chart (middle yellow curve) estimates that Bitcoin could trade between $160,000 and $215,000.
What the price of Bitcoin actually does in early 2025 will be very dependent on whether the current bull market still has room to run.
As I mentioned earlier, some short-term weakness that brings Bitcoin back to earth would be far from unexpected.
But given how volatile the asset is, there’s also plenty of room for it to surprise on the upside.
In that kind of scenario, you want to minimize your capital outlay while also giving yourself plenty of potential upside exposure, and something like an out-of-the-money bull call spread on a Bitcoin ETF could allow you to do that.
As an example, the iShares Bitcoin Trust (IBIT) March 21, 2025, 65/70 bull call spread at a net debit of about $1.15 would be a total loss if Bitcoin is topped out here but would be worth $5 if Bitcoin rose another 23% or so by late March (334% profit).
You can fine-tune the timeframe and strike prices to meet your needs, but one benefit of a spread is that instead of just paying for volatility (like you would with a long call) you’re offsetting it by also selling some volatility (the short leg of the spread).
It’s not for the lunch money (as my colleague Mike Cintolo would say), but the upshot of Bitcoin is that if it has any upside momentum it tends to have a lot of upside momentum.
