Bitcoin The 2025 surge 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. But not as we thought.
It is true that bitcoin hit an all-time high earlier than expected, reaching over $126,200 on October 6. But then, four days later, a flash crash shook the market, revealing how fragile and unpredictable digital assets can be.
Since then, bitcoin has fallen 30% from October’s record high and more than 50% below most forecasts for 2025. Far from skyrocketing, it has fallen 6% this year and spent most of the past two months stuck between $83,000 and $96,000, according to TradingView prices.
The October crash caught traders off guard and erased months of leveraged uptrend in minutes. But it was not a breakdown, according to Mati Greenspan, founder of Quantum Economics, but a rebalancing and a sign of the growing acceptance of cryptocurrency by institutions.
Bitcoin has been revalued as a risk asset and not as a revolution.
“The October 10 flash crash is not a failure of Bitcoin,” Greenspan said in an interview. “It was a liquidity event, triggered by macroeconomic tensions, trade war fears and crowded positioning, that revealed how forward-loaded the cycle had become.”
The sudden change in behavior made prediction nearly impossible and made some of the space’s most recognizable analysts eat their words.
Read more: In 2025, Bitcoin showed how spectacularly wrong price predictions can be.
At the start of the year, experts such as Bitwise Asset Management Chief Investment Officer Matt Hougan, Galaxy Digital CEO Mike Novogratz, Standard Chartered Global Head of Digital Asset Research Geoffrey Kendrick and others shared optimistic predictions, but as the dust settles, the reality is completely different.
“Prudent capital”
What happened? Simply put, Bitcoin’s ideological roots have been overtaken by its growing acceptance as an institutional asset. This change changed the way bitcoin was traded and valued by savvy investors in traditional markets.
“What didn’t work in 2025 was that bitcoin quietly crossed a threshold. It stopped being a marginal retail-focused asset and became part of the macro institutional complex,” Greenspan of Quantum Economics told CoinDesk. “Once Wall Street came along, bitcoin began trading less on ideology and more on liquidity, positioning and policy.”
With Wall Street’s involvement, bitcoin has become more closely tied to macroeconomic events, which affect all asset classes. Cryptocurrency may still be touted as a hedge against the Federal Reserve, but it is now more sensitive to Fed policy than ever.
“Markets were expecting faster, deeper Fed easing in 2025 – and that just didn’t materialize,” said Jason Fernandes, co-founder of AdLunam. “BTC, like other risky assets, pays the price of prudent capital.”
Additionally, October’s cascade of selloffs left retail and institutional investors bruised.
“Derivatives-based liquidations created a volatile 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 dynamic 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 in late December.
Greenspan of Quantum Economics pointed out a fundamental pitfall: “Bitcoin is often presented as a hedge against the Federal Reserve, but in practice it still depends on liquidity driven by the Fed. » Since 2022, the Fed has gradually withdrawn liquidity from the system, and this liquidity eventually flows into risky assets, including Bitcoin.
“When this tide goes out, the upside potential becomes fragile,” he added.
Distorted expectations
This new reality creates a conundrum for bitcoin and crypto as a whole. Mass adoption and rising prices need Wall Street capital, but that capital is a double-edged sword.
“Most people thought institutional adoption would mean Bitcoin could reach a million people. [dollars] faster than you can blink,” said Kevin Murcko, CEO of cryptocurrency exchange CoinMetro. “But now that it’s institutionalized, it’s treated like any other Wall Street asset.
“That means it responds to fundamentals, not just beliefs,” he said. “We see prices reacting to everything from the Bank of Japan (BOJ) ending cheap capital to political uncertainty around the Fed itself. And institutions don’t like uncertainty.”
And then there are the weekends.
“Bitcoin trades 24/7, but capital flows don’t; most large flows occur Monday through Friday. So when the weekend comes and leverage is high, you get cascading liquidations.”
Silver lining
However, that doesn’t mean it’s all doom and gloom. In fact, this is a positive move toward higher prices, just slower than expected, experts say.
Bitwise’s Hougan said he thinks the overall trend remains upward: “It will be complicated. But the macro direction is clear.”
“The market is driven by the collision of powerful, persistent positive forces and periodic, violent negative forces. » he declared, remaining optimistic despite recent disasters. “Institutional adoption, regulatory clarity, macroeconomic concerns about the devaluation of fiat currencies, and real-world use cases like stablecoins – these are positive, slow-moving forces. They take a decade to manifest.”
Bitcoin, traditionally seen as following a four-year cycle tied to regular 50% reductions in the creation of new tokens paid to miners, is likely to create new momentum in 2026, he said.
“The drivers of the old cycle – halving, 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. “This is why we believe bitcoin could reach new all-time highs in 2026, even outside of the traditional halving cycle.”
Quantum Economics’ Greenspan may have summed up what’s happening with bitcoin and where it’s going.
“It wasn’t ‘peak bitcoin,’” he said. “That’s when Bitcoin officially started playing in the Wall Street pond.”
