The year 2025 taught a harsh lesson about Bitcoin’s market dynamics. It started with political momentum, only to shift into a summer marked by strong policy signals.
However, it quickly transitioned into one of the most dramatic boom-and-bust cycles in the asset’s history.
By December, the price had effectively returned to where it began, leaving the asset stagnant for the year. Yet, this static appearance concealed a tumultuous transformation beneath the surface.
While Wall Street banks finally opened their doors and ETFs attracted unprecedented capital, a solvency crisis loomed over the network’s physical infrastructure.
CryptoSlate has outlined some key trends that characterized the market in 2025 below:
Bitcoin Reserve Race
President Trump transitioned from campaign promises to actionable steps. On March 6, the White House enacted Executive Order 14233, officially creating a Strategic Bitcoin Reserve (SBR).
The order consolidated confiscated federal bitcoin holdings into a designated US Digital Asset Stockpile, marking the end of random auctions by the US Marshals. Just a week later, lawmakers introduced the BITCOIN Act of 2025 to solidify this framework.
This legislative move shifted the US government from a net seller to a strategic holder, signaling to global sovereign nations that Bitcoin is recognized as a reserve asset.
Inspired by this, states such as Texas and Pennsylvania initiated comparable endeavors. On an international level, countries like France, Germany, the Czech Republic, and Poland started examining sovereign accumulation.
In the corporate arena, the “Bitcoin Treasury” trend escalated. Strategy (previously known as MicroStrategy) and over 100 other public companies now hold more than 1 million BTC collectively, as per Bitcoin Treasuries data.
Sam Callahan, director of Strategy and Research at Oranje BTC, noted that these entities turned to BTC because it “is a superior reserve asset compared to gold.”
He elaborated:
“Bitcoin is digital. It is fully auditable in real-time and can be transferred instantly. Bitcoin has a completely fixed supply. In contrast, gold’s supply will continue to increase indefinitely due to ongoing mining.”
The Regulatory Green Light
A significant highlight of the year was the change in the traditional financial regulatory environment to accommodate Bitcoin.
Throughout the past year, the US Securities and Exchange Commission (SEC) and other financial bodies like the Commodity Futures Trading Commission (CFTC) have made substantial regulatory advancements that have incorporated Bitcoin into the traditional financial framework.
To provide context, the CFTC recognized Bitcoin as a valid margin in regulated derivatives markets, and the US Federal Housing acknowledged it as a valid asset for mortgage qualification.
However, the most remarkable changes came from banking regulators, who fully accepted Bitcoin.
Earlier this month, the Office of the Comptroller of the Currency (OCC) issued Interpretative Letter 1188. This document clarified that national banks are permitted to engage in “riskless principal” crypto transactions.
Previously, banks were reluctant to facilitate trades for fear of holding volatile assets on their balance sheets. A “riskless principal” trade solves that issue by allowing a bank to buy an asset from a seller and immediately resell it to a buyer, enabling liquidity without taking on market risk.
This letter, along with conditional charter approvals for companies like BitGo, Fidelity Digital Assets, and Ripple National Trust Bank, effectively integrated cryptocurrencies into the US banking system.
TradFi Opens the Gates
Owing to these regulatory changes, banks that once viewed Bitcoin as a reputational risk began to pivot in 2025, competing for market share.
Notably, CryptoSlate previously reported that 60% of the top 25 US banks have adopted strategies to sell, protect, or advise clients on Bitcoin.
This shift indicates that major financial institutions like PNC Bank, Morgan Stanley, JPMorgan, and others have opened their operations for Bitcoin trading and custody services.
Given this significant growth, Bitcoin analyst Joe Consorti argued that BTC had become “too significant for Wall Street to overlook.”
Bitcoin ETFs
Beyond banks embracing Bitcoin, the Bitcoin exchange-traded fund (ETF) market also demonstrated impressive performance for industry participants this year.
BlackRock’s iShares Bitcoin Trust (IBIT) led the ETF scene, attracting over $25 billion in inflows this year, making it the sixth-largest ETF in the US.
Importantly, investor behavior towards Bitcoin differed from that towards gold. While the SPDR Gold Shares (GLD) saw inflows during gold’s peak, Bitcoin ETF inflows continued even as BTC’s price stabilized.
Eric Balchunas, Bloomberg’s ETF analyst, commented:
“IBIT stands out as the only ETF on the 2025 Flow Leaderboard that reported a negative return for the year… This indicates strong long-term potential. If it can pull in $25 billion during a downturn, imagine the inflows in a favorable year.”
Indeed, BlackRock, the world’s largest asset management firm, identified BTC as one of this “year’s significant investment themes.”
In light of this, market analysts explained that investors began to view Bitcoin as a structural accumulation asset rather than a momentum-based trade.
Additionally, positive developments within the ETF landscape included the US SEC approving “in-kind” creations and redemptions for spot ETFs. This change enabled Authorized Participants (APs) to exchange actual BTC for ETF shares, avoiding cash conversions.
Simultaneously, the financial regulator permitted options on IBIT to commence trading. This provided hedgers and basis traders with necessary tools for risk management, completing the institutional derivatives landscape.
Bitcoin’s Price Boom and Bust
Unsurprisingly, BTC’s price movements followed a typical volatile pattern. In early October, Bitcoin broke resistance to reach a new all-time high exceeding $125,000.
While the government and ETFs were accumulating, long-term holders were selling. On-chain data indicated that wallets holding Bitcoin for 155 days or more played a major role in the October surge.
This distribution, coupled with macro-deleveraging, pushed prices back below $90,000, which represented a correction of over 30%.
Moreover, global macroeconomic conditions added complexity to the scenario.
This year, the US economy experienced notable rate cuts by the Federal Reserve, with some arguing that these actions positively impacted BTC’s price. On the other hand, the Bank of Japan (BoJ) began to increase rates, tightening global liquidity and pressuring speculative carry trades.
Still, despite these market conditions, Bitcoin enthusiasts remain optimistic about the leading cryptocurrency’s potential. Pierre Rochard, CEO of the Bitcoin Bond Company, stated:
“Bitcoin acts as a global ‘savings reservoir’ for excess capital: when interest rates are low, liquidity is abundant, and high expected ROIC real investments are scarce, savings flow into Bitcoin due to its finite scarcity, being a global digital open-source network with a fixed supply of 21 million.”
BTC Miners and AI
While Wall Street embraced Bitcoin, miners securing the network encountered turmoil.
After the October peak, BTC’s hashrate plummeted from a lofty 1.3 zetahash per second (zh/s) to around 852 EH/S recently. It has since rebounded to 1.09 zh/s as of this writing.
Hashrate is critical for Bitcoin’s security, essential for maintaining network trust. Higher hashrates make it increasingly difficult for attackers to alter Bitcoin’s ledger.
As BTC’s price fell below $90,000, older mining rigs became burdensome for Bitcoin miners.
This situation arose because the average cost to produce 1 BTC (including depreciation) for listed miners hovered around $137,800. With spot prices trading at a $47,000 discount to production costs, profit margins vanished.
In order to stay afloat, miners began pivoting towards Artificial Intelligence (AI) and High-Performance Computing (HPC). Now, seven of the top ten miners report revenue from AI contracts.
Google emerged as a significant backer in this evolution. Instead of purchasing mining firms outright, Google provided credit support to assist miners in upgrading their infrastructure for AI workloads.
This transition marks a lasting change in the industry: miners are evolving into hybrid energy-compute centers to mitigate Bitcoin’s volatility.
Past Hauntings
Despite all the institutional advancements and positive developments over the past year, lingering psychological fears persisted.
- Mt. Gox: The trustee postponed the repayment deadline to October 2026. However, a sudden transfer of ~10,600 BTC from estate wallets in November triggered an algorithmic sell-off, highlighting that “zombie supply” still influences short-term sentiment.
- The Quantum Threat: Over the past year, the Bitcoin development community has accelerated discussions on securing the network against potential quantum computing threats. While many believe these fears are still a few years away, concerns regarding the threat remain pervasive across industry discussions.
The Verdict
2025 marked the year of integration. The structural fundamentals are no longer theoretical. ETFs now operate with in-kind efficiency, banks have the regulatory clearance necessary for trading, and the U.S. government holds the asset formally. However, the miner insolvency crisis and the long-term holder sell-off demonstrated that structural adoption doesn’t guarantee continuous price increases. Bitcoin is now fully exposed to the unforgiving realities of macro markets.
