Burned Bitcoin Investors Enter New Year with Less Swagger

2025 was so not bitcoin’s year. The No. 1 cryptocurrency by market cap never recovered from a flash crash in the fall, wiping out more than $1 trillion from the wider crypto sector’s market value. Bitcoin was worth less than $88,000 on Dec. 31, a drop of more than 30% from its 2025 high above $126,000 in October. 

The coin closed out 2025 with an annual decline for the fourth time in its history. The other three times coincided with major events, like FTX’s collapse in 2022. This time, the fall has left some scratching their heads.

Feeling the Chill

Crypto was set up for a huuuge year, with the Trump administration’s backing (he’s called himself the “crypto president”). Regulators under President Trump established pro-crypto guidelines, while financial institutions including Wells Fargo and Bank of America’s Merrill Lynch created new crypto-based products and companies like GameStop took a page from Strategy’s playbook and bought hundreds of millions of dollars’ worth of bitcoin.

But then came Red October, when several whales liquidated large sums of bitcoin after Trump announced 100% tariffs on China. While stocks recovered from the news, crypto continued to crumble. The loss forced the liquidation of leveraged positions, which spiraled into a vicious cycle. 

Bitcoin bottomed out at about $80,000 in November, and though it has swung back up since (topping $90,000 on Friday), the crash seems to have left a lasting dent in investors’ confidence:

• Investors have withdrawn more than $5 billion from US spot bitcoin ETFs since mid-October. The derivatives market, meanwhile, shows strong support to keep bitcoin above $85,000, but also resistance around $95,000; that could keep bitcoin stuck in this range for the short term. 
• Bitcoin mining companies are pivoting to AI. Hut8 Mining’s shares surged 36% in the past month after the company forged a 15-year, $7 billion deal to lease data centers to AI firm Fluidstack. Investors buy shares in companies like Hut8 to get indirect exposure to crypto, and now they can hedge their investment with AI. Coinbase also announced it’s adding stocks to its traditionally crypto-only trading platform. 

Better Luck Next Year: Crypto’s correction is expected to slow, but not stop or reverse, the sector’s long-term growth. Standard Chartered slashed its 2026 target price for bitcoin in half, from $300,000 to $150,000. While the bank still has high hopes for the coin, they’re going to take longer to materialize than originally expected. Standard Chartered moved its $500,000 bitcoin target from 2028 to 2030.