Bitcoin price fell on Christmas Eve, with the end of an eventful year in sight. It is one that has seen the largest cryptocurrency, bitcoin more than double in price. Bitcoin BTCUSD +0.94% is down 1.3% over the last 24 hours to last trade at $94,063, according to CoinDesk data, and 2025 will likely be a defining year for cryptos for these three reasons. Firstly, the prices of cryptocurrencies like Bitcoin, XRP and Dogecoin DOGEUSD -1.02% have been fueled by President-elect Donald Trump’s pro-crypto stance. Any development on Trump’s pledge to create a strategic Bitcoin reserve, or the Senate approving Trump’s crypto-friendly nominations are likely to move crypto prices.

Secondly, just like for traditional currencies, interest rates matter for cryptos. “Monetary easing has almost always favored the price of bitcoin, and the opposite has negative impact on the price,” said Yuya Hasegawa, crypto market analyst at bitbank, one of the largest cryptocurrency exchanges in Japan.

Last week, the Federal Reserve cut interest rates by another quarter point, bringing this year’s cuts to a full percentage point. But the central bank also hinted that there will likely be fewer cuts next year. Trump has said he will implement tariffs on all imports to the U.S. of between 10%-20%, as well as tariffs as high as 60% on Chinese goods. That’s a concern for markets as tariffs tend to be inflationary, which may lead to the Fed keeping interest rates higher for longer.

“While the Fed’s potential policy shift will likely put pressure on bitcoin, high interest rates will keep pressure on the government’s debt payments as well,” Hasegawa pointed out. With an increasing government debt already raising questions about its sustainability, Hasegawa added, it could become a topic closely watched by markets in 2025.

“When that happens, and if [a strategic Bitcoin reserve] is already established in the states, a digital gold like bitcoin could grab the spotlight again.”