Bitcoin’s 2025 paradox: everything going for it, except the rally

Despite Wall Street backing, Trump’s pro-crypto policies, and growing institutional adoption, Bitcoin is experiencing one of its most surprising pullbacks: expected volatility, rapidly evaporating confidence.

After hitting $126,000 in October, Bitcoin suddenly reversed course, erasing much of its 2025 gains and leaving markets stunned. The roughly $600 billion drop in market value comes in a year when the cryptocurrency was expected to cement its legitimacy: rising ETF inflows, major banks joining the space, and a decidedly pro-crypto U.S. administration.

Yet confidence has vanished with unprecedented speed. Traders and analysts—lacking a reliable institutional playbook for Bitcoin—are revisiting old cyclical theories. The supply-halving event in April 2024 fits the historical pattern: a peak in the following months, then a correction. But with deeper institutional pockets involved, the old script may no longer apply.

Retail investors, exhausted after chasing crypto stocks at their highs and overloaded with leverage, intensified the selloff just as global macro tensions rose. ETF inflows stalled, long-term holders took profits, and even industry flagships now trade close to the value of their Bitcoin reserves—a sign of fading conviction.

Bitcoin increasingly behaves like a macro asset rather than something driven by predictable supply dynamics: it reacts to liquidity, the dollar, and policy shifts more than to its historical cycles. And while altcoins and risk assets wobble, new speculative favorites—from AI to stablecoins—are drawing attention away.

The market itself remains intact, and Bitcoin is still above its pre-election levels, but expectations of a run to $200,000 by year-end look increasingly distant. If neither political support nor institutional adoption can spark a rally, the inevitable question becomes: what will?

Andrea Pelucchi