Bitcoin prices may see a boost from Nvidia’s massive valuation drop and a pipeline of Initial Public Offerings (IPOs) from prominent cryptocurrency firms, analysts suggest.
Shares in chip maker Nvidia closed down nearly 17% on Jan. 27, wiping out almost $600 billion in value — the largest one-day value drop in US stock market history — triggered by panic over Chinese AI firm DeepSeek’s latest model, which rivals OpenAI’s ChatGPT.
The decline in Nvidia's valuation is considered a “bullish development” for Bitcoin (BTC), according to a Jan. 27 report by research firm 10x Research. The report suggests that reduced spending on AI could help ease inflation, which could lead to more favorable monetary policy from the US Federal Reserve:
“Reducing AI spending keeps share buybacks as a key driver of U.S. equity returns and eases inflationary pressures, addressing the Fed’s concerns and making them marginally less hawkish.”
Combined with the upcoming almost $100 billion of IPOs from crypto firms, these factors may create conditions for Bitcoin’s next significant price breakout, the report added.
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Crypto IPO pipeline to drive Bitcoin’s 2025 rally
Multiple high-profile crypto firms plan to go public through an IPO, which creates a “clear incentive to keep Bitcoin prices elevated,” 10x stated.
At least 10 large crypto firms are planning to go public in 2025 with a total combined valuation of over $73.9 billion.
Top crypto companies preparing for a potential IPO. Source: 10x Research
Bitcoin’s price is tied to “financial gamesmanship,” illustrated by the “significant effort made to inflate Bitcoin’s value leading up to Coinbase’s IPO in April 2021,” the report stated, adding:
“With a pipeline of high-profile crypto “financial” companies aiming to go public this year, inflated valuations will likely depend on maintaining a sky-high Bitcoin price—a trend worth watching closely.”
Bitcoin price during CME Futures launch, Coinbase listing. Source: 10x Research
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The report estimates that the IPOs could increase valuations by 50% to 100% compared to their previous private funding rounds, potentially reaching a combined valuation of $100 billion to $150 billion:
“This substantial value provides a strong incentive to sustain Bitcoin’s rally throughout 2025, as higher crypto asset prices are critical for achieving these inflated IPO valuations.”
However, the $36 trillion US debt ceiling recently flashed a critical warning sign for Bitcoin liquidity, which may experience a temporary correction to $70,000 before the next leg up in the market cycle.
GMI Total Liquidity Index, Bitcoin (RHS). Source: Raoul Pal
Bitcoin is set for a “local top” above $110,000 in January before an “interim peak in liquidity” may lead to a deeper correction, according to Raoul Pal, founder and CEO of Global Macro Investor. Pal shared his analysis in a Nov. 29 X post.
Based on its correlation with the global liquidity index, Bitcoin’s right-hand side (RHS), which marks the lowest bid price someone is willing to sell the currency for, should peak near $110,000 in January before falling below $70,000 by February.
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