2025 is Not the "Worst" — It is the Transformation of the Crypto Market

Many people are saying that 2025 is bad for cryptocurrency. Bitcoin dropped by -5.4%, Ethereum -12%, while traditional assets like Gold rose by 66%. But if you look deeper into the data, you’ll see why this is actually the beginning of a new era for crypto.

The Real Story: Who Is Buying While Prices Are Falling?

Meanwhile, as BTC prices declined, something unprecedented happened: $25 billions surged into Bitcoin ETFs in 2025 alone. Bitcoin ETF assets reached $114-$120 billions, with 24% held by institutional investors.

Who are these? BlackRock, Fidelity, MicroStrategy, sovereign wealth funds from Abu Dhabi, and recently even Harvard University Endowment Fund. Most importantly: the investment banks that long rejected crypto now hold holdings—Wells Fargo $491 millions, Morgan Stanley $724 millions, JPMorgan $346 millions.

The message is clear: While retail investors are running, institutions are buying.

How the Game Changed in 2025

In 2024, the approval of BTC spot ETFs marked a watershed moment. It wasn’t just an additional investment channel—it transformed the entire game mechanics.

Look at these numbers:

• BlackRock IBIT grew to $50 billions AUM in just 228 days (fastest ETF growth in history)
• Now, the three firms (BlackRock, Grayscale, Fidelity) manage 89% of all BTC ETF assets
• 86% of institutional investors hold or plan to allocate to digital assets

This is no longer retail speculation. It’s an institutional allocation cycle.

Why Are Prices Sideways But Money Is Flowing?

Since March 2024, long-term Bitcoin holders (people holding BTC for a long time) have released 1.4 million BTC—worth $121.17 billion. An unprecedented supply surplus.

But prices didn’t fall. Why? Because these three groups absorbed all the selling pressure:

1. Retail investors - Fleeing in fear. Active addresses declined, Google searches for “bitcoin” hit an 11-month low, small transactions dropped by 66%.

2. Institutional investors - Continually buying. ETF inflows persisted even as prices dipped.

3. Corporate treasuries - Accumulating. Now 134 companies worldwide hold 1.686 million BTC.

The result? A year of sideways price action at high levels—phenomenon not seen in previous cycles. Bitcoin is at $91,510 today (data 01-12-2026), with the ATH of $126,080 still as a near-term target.

The Cognitive Gap: Price vs. Structure

This explains the confusion:

• Price: -5.4% (looks bad)
• But: $25 billions inflow (signal of strength)
• Retail perspective: “Will the price drop further?”
• Institutional perspective: “Should we buy more?”

The three waves of selling are not explosive distributions like in 2013, 2017, or 2021. They are distributed and prolonged—multi-wave, multi-year, as the market thickens and matures.

The Policy Window: This Is No Accident

The Trump administration moved quickly in 2025:

• Crypto executive order (January 23)
• Strategic Bitcoin Reserve initiative (~200,000 BTC)
• GENIUS Act for stablecoin regulation framework
• SEC chair replacement

Pending: Market structure bill with a 77% chance of passing before 2027. If passed, stablecoins could buy short-term US Treasuries—potential 10x growth in the next three years.

Policy friendliness is unprecedented. In 2024, 274 “pro-crypto” candidates won. But the banking lobby plans to spend $100 millions to oppose it. 64% of crypto investors believe the candidate’s crypto stance is critical.

Thus, the 2026 midterm elections are a game-changer. With 435 House seats and 33 Senate seats at stake. History shows: H1 2026 is a policy honeymoon + institutional accumulation = bullish; H2 2026 is political uncertainty = higher volatility.

Where Will BTC Go in 2026?

Major investment firms project:

• VanEck: $180,000
• Standard Chartered: $175,000-$250,000
• Tom Lee: $150,000
• Grayscale: new all-time high in H1 2026

This is not blind optimism. Based on:

• Continued ETF inflows (institutional demand remains strong)
• Strategic bitcoin reserve expansion increasing scarcity premium
• Policy clarity from the US government
• The global macro environment beginning to normalize

But risks remain:

• Fed policy and US dollar strength
• Possible delays in the market structure bill
• LTH selling may continue
• Election results uncertain

Short-term (3-6 months): Range-bound at $87K-$95K as institutional accumulation supports Medium-term (2026 H1): Policy + institutional dual drive target $120K-$150K Long-term (2026 H2): Higher volatility depending on election outcomes

The Pattern of Every Cycle

2013: Retail-dominated, peak $1,100 2017: ICO craze, peak $20,000 2021: DeFi+NFT, peak $69,000 2025-2026: Institutional entry, current $91,510 heading higher

In each cycle, participants are more professional, capital is larger, infrastructure is more solid.

The “worst” performance of 2025 is a transition period from the old world (retail speculation) to the new world (institutional allocation). Price reflects the transition, but the direction is certain.

Summary: The Signal You Should Pay Attention To

Price: -5.4% for the year ETF inflow: +$25 billions Institutional participation: +24% in AUM Market volatility: Decreased (narrowing)

This combination enables a structural uptrend. It’s not a cycle top—it’s a cycle transformation.

The job of a rational investor is not to predict short-term price movements but to identify structural trends. And the trend is clear: institutional capital has permanently entered the crypto market.

Stay rational. Stay patient. 2026 still has many catalysts—legislative progress, strategic reserve expansion, and policy continuity after elections. When market structure shifts, pricing power will also reset.