Bitcoin The bull run in 2025 was expected to be historic, with some industry experts suggesting the largest cryptocurrency would reach highs of $180,000 to $200,000 by the end of the year.
It was historic. Just not like everyone thought.
It’s true that bitcoin hit an all-time high earlier than most models projected, rising to over $126,200 on October 6. But then, four days later, a sudden crash occurred that sent the market reeling, exposing how fragile and unpredictable digital asset trading can be.
Since then, bitcoin has fallen 30% from October’s record and more than 50% below most forecasts for 2025. Far from skyrocketing, it fell 6% this year and spent most of the last two months stuck between $83,000 and $96,000, according to TradingView prices.
The October crash caught traders off guard and ended months of leveraged optimism in minutes. But it was not a breakup, according to Mati Greenspan, founder of Quantum Economics, but rather a rebalancing and a sign of the growing acceptance of cryptocurrency by institutions.
Bitcoin was revalued as a risk asset, not a revolution.
“The flash crash on October 10 was not a failure for bitcoin,” Greenspan said in an interview. “It was a liquidity event, triggered by macroeconomic stress, trade war fears and oversaturated positioning, that exposed how charged the cycle had become.”
The sudden change in behavior made forecasting nearly impossible and caused some of the space’s most renowned analysts to swallow their words.
Read more: In 2025, bitcoin showed how spectacularly wrong price forecasts can be
At the start of the year, experts such as Matt Hougan, Chief Investment Officer at Bitwise Asset Management, Mike Novogratz, CEO of Galaxy Digital, Geoffrey Kendrick, Global Head of Digital Asset Research at Standard Chartered and others shared optimistic forecasts, but as it comes to an end and the dust settles, the reality is completely different.
‘Cautious capital’
What happened? Simply put, bitcoin’s ideological roots were surpassed by its growing acceptance as an institutional asset. This change changed the way sophisticated investors in traditional markets traded and valued bitcoin.
‘What went wrong in 2025 is that bitcoin quietly crossed a threshold. It stopped being a fringe asset driven by retail trading and became part of the macro-institutional complex,” Greenspan of Quantum Economics told CoinDesk. “Once Wall Street arrived, bitcoin began to operate less on ideology and more on liquidity, positioning and policy.”
With Wall Street’s involvement, bitcoin became more closely linked to macroeconomic events, which affect all asset classes. The cryptocurrency may still present itself as a hedge against the Federal Reserve, but it is now more sensitive than ever to Fed policy.
“Markets came into 2025 expecting faster, deeper Fed easing, and that simply hasn’t materialized,” said Jason Fernandes, co-founder of AdLunam. “BTC, like other risk assets, is paying the price for cautious capital.”
Furthermore, the cascade of liquidations in October left both retail and institutional investors hurt.
“Derivatives-driven liquidations created a choppy and unpredictable market where one lot triggered the next,” Fernandes said. “It’s no surprise that ETF inflows have dried up.”
From January to October, U.S. spot bitcoin ETFs attracted about $9.2 billion in net inflows, or about $230 million per week. But then the momentum abruptly reversed. From October to December, the numbers turned negative, with more than $1.3 billion in net outflows, including a $650 million withdrawal in just four days at the end of December.
Greenspan of Quantum Economics pointed out a fundamental vicious cycle: “Bitcoin is often portrayed as a hedge against the Fed, but in practice it still relies on liquidity driven by the Fed.” Since 2022, the Federal Reserve has been steadily withdrawing liquidity from the system, and this liquidity eventually flows into risk assets, including bitcoin.
“When that tide goes out, the advantage becomes fragile,” he added.
Biased expectations
This shift in reality creates a conundrum for bitcoin and cryptocurrencies as a whole. Mass adoption and price rebounds require capital from Wall Street, but that capital is a double-edged sword.
“Most people assumed institutional adoption would mean a million bitcoins [dollars] faster than you can blink,” said Kevin Murcko, CEO of cryptocurrency exchange CoinMetro. “But now that it’s institutionalized, it’s being treated like any other Wall Street asset.
“That means it responds to fundamentals, not just beliefs,” he said. “We’re seeing prices react to everything from the Bank of Japan (BOJ) ending cheap capital to political uncertainty around the Fed itself. And institutions don’t like uncertainty.”
Then there are the weekends.
“Bitcoin trades 24/7, but capital flows do not; most of the large flows are Monday to Friday. So when the weekend comes and leverage is high, cascading liquidations occur.”
Silver lining
However, this does not mean that it is all doom and gloom. In fact, this is a positive shift towards higher prices, although slower than expected, according to experts.
Bitwise’s Hougan said he believes the overall trend remains upward: “It will be tricky. But the macro direction is clear.
“The market is driven by the collision of powerful, persistent positive forces and periodic, violent negative forces.” He said, remaining optimistic despite recent failures. “Institutional adoption, regulatory clarity, macroeconomic concerns around the degradation of fiat money, and real-world use cases such as stablecoins are positive, slow-moving forces. They take a decade to develop.”
Bitcoin, which is traditionally considered to follow a four-year cycle tied to regular 50% cuts in the creation of new tokens paid to miners, will likely create a new dynamic in 2026, he said.
“The drivers of the old cycle (halvings, interest rates and leverage) are significantly weaker,” he told CoinDesk earlier this month. Future growth will be driven by more mature structural forces such as institutional flows, regulatory clarity and global asset diversification. “That’s why we think Bitcoin could hit new all-time highs in 2026, even outside of the traditional halving cycle.”
Quantum Economics’ Greenspan perhaps summed up what’s happening with bitcoin and where it’s headed.
“This was not ‘peak bitcoin,'” he said. “It was the moment when Bitcoin officially started playing in the Wall Street pond.”
