Hong Kong is looking at ways to introduce Bitcoin into its strategic reserves. The suggestion has been made in an attempt to attract business and position itself as a global cryptocurrency capital. In the article below, we dive into the proposals and how they may impact the Bitcoin price. 

A prominent lawmaker in Hong Kong, Wu Jie, has campaigned for the region to include Bitcoin in its strategic reserves. According to local media sources, he has approached the Hong Kong Special Administrative Region to discuss the acquisition and storage of long-term digital assets. His argument for the move was that the limited supply of Bitcoin would hedge against inflation. It would also put it in a serious position as a global competitor.

Bitcoin Reserves

His argument was extremely persuasive, addressing even the main concerns regarding Bitcoin. This tends to stem from its volatility, and he suggested that only a small fraction of the state’s reserves are given over to the asset. Practically, digital storage of an asset is also much easier than storing physical items like gold. His final argument was that if more countries follow their lead and do the same, this will cause the coin to rise in value.

Hong Kong has been at the forefront of crypto adoption for some time, making it surprising it has not already adopted the proposal. Following the US, the Hong Kong Stock Exchange was one of the first to allow Bitcoin ETFs. They have also issued several licenses from crypto trading platforms.

Will Bitcoin Hit 200K in 2025?

This push to adopt crypto into tradfi reserves is exasperated by the imminent proposition that Bitcoin could conceivably hit 200k in 2025. This is following a stellar year where the cryptocurrency climbed to a record high, eclipsing the $100k barrier. It has risen 117% over the last year and, at the time of writing, has settled back to around $97,000 per token.
Several reasons have fed the Bitcoin bull run and helped its Bitcoin price USD prediction to reach such high levels. One of these was that it was also a year when a Bitcoin halving event took place. This is where the reward for mining Bitcoin is diminished, lowering the supply. This typically leads to a hike in price three months later, then a much bigger one six months later. While this rise was delayed this year, it did come eventually.

Another reason was the introduction of Bitcoin ETFs, which were finally given the go-ahead by the US Securities and Exchange Commission. These exchange-traded funds were a way for traders to invest in Bitcoin but hedge against its volatility. By using them, many tradfi investors began to place assets into cryptocurrency, and the ETFs were extremely successful. It also signaled a shift to acceptance from wider finance organizations of Bitcoin, also pushing confidence upwards.

The Expiration of Bitcoin Options

There are those predicting huge gains from Bitcoin once again in 2025. However, like any investment, there are signals that buyers should be aware of. One that could increase volatility in the markets is the expiration of a large number of Bitcoin options. According to news from one exchange, around $14.38 billion in Bitcoin options contracts expired in the last week of 2024. Options allow traders to buy or sell an asset at a predetermined price and date. The next expiry is set for 21st January 2025.

It is of note, as this means that a level of $84,000 will be the lowest price Bitcoin can fall to in which investors experience a large financial loss. These losses can once again cause huge volatility in the crypto markets.

Will Bitcoin Take a Bearish Trend or Remain Bullish?

So will Bitcoin rise to even bigger heights in 2025? Volatility is nothing that puts investors off and is par for the course when it comes to crypto. However, there are those who believe it will now enter a bearish period. It has fallen back in price, though it is still up 128% at the start of the year. While the market has had confidence, particularly from institutions like pension funds and BlackRock, this decline will hurt them the most. This could curb the possibility of a continued bull run.

The price of Bitcoin on charts is currently forming a head and shoulders pattern. This suggests it may fall to around $78,000, a decline of around 17%. However, by no means does the signal drop is a certainty.

Hong Kong adopting Bitcoin into its reserves is the exact kind of move that would upset this trend. News such as this inspires confidence in the markets. Further action from the US would see this push once again. To truly predict Bitcoin’s future, this shows it is imperative to keep an eye on the news and global events. If you do, it could be you predicting the next Bitcoin bull run.