Tom Lee is a managing partner and leads market research at financial services firm Fundstrat Global Advisors.

During a recent panel discussion on CNBC, Lee unveiled his market predictions for 2025. Among them, the research analyst put forth a price target of $250,000 on cryptocurrency Bitcoin (CRYPTO: BTC) -- implying roughly 163% upside from trading levels on Jan. 9.

Below, I'm going to explore why 2025 could be a breakout year for Bitcoin and make the case for considering the crypto in your portfolio.

Why tariffs could influence a rising interest in crypto investing

Throughout his time on the campaign trail, President-elect Trump often floated the idea of imposing tariffs once he assumes office. While some political pundits and economists view the rhetoric surrounding tariffs as more of a flex than anything else, there are some legitimate concerns if they do go into effect.

In theory, tariffs could significantly raise the prices of goods and materials for businesses. Subsequently, companies would pass these costs onto the consumer which would cause prices to rise. During an inflationary situation such as the one I just described, it's not unusual for consumers to scale back their purchases -- causing economic activity to slow down materially.

If tariffs lead to sluggish economic activity, my bet is that stocks will begin to sell off as businesses witness deceleration across sales and profits. Should this occur, I wouldn't be surprised to see some cohort of the investment community begin to flock toward alternatives such as crypto or commodities.

Even without tariffs, the incoming administration has vocally supported crypto

Although tariffs could influence crypto prices to rise, I think the idea explored above is rooted more in theory at the moment. Personally, I think any upside in Bitcoin over the next four years will be a direct result of the incoming administration's approach to the regulatory environment around cryptocurrency.

President-elect Trump and some of his constituents such as RFK Jr. have been vocally supporting Bitcoin for some time now. In particular, RFK Jr. previously suggested that the U.S. Treasury should diversify its balance sheet by building a strategic Bitcoin reserve .

Furthermore, President-elect Trump's nominee to take the reins over at the Securities and Exchange Commission (SEC), Paul Atkins, is a pro-crypto leader who very well could inspire some regulatory changes that could positively influence digital assets such as Bitcoin.

Should you buy Bitcoin in 2025?

Generally speaking, I tend to dismiss price targets put forth by Wall Street analysts. The reason for that is I'm less concerned about specific prices, and more focused on narratives.