Bitcoin is on track to post its first annual loss since 2022, as macroeconomic pressures and declining momentum affected the cryptocurrency. Bitcoin set a record earlier this year but has struggled since October, with last month marking its largest monthly drop since mid-2021. It is currently trading around $87,474.2, down more than 6% for the year.
Earlier in 2025, Bitcoin set an all-time high above $126,000 in October, fueled by optimism following the election of crypto-friendly U.S. President Donald Trump. However, new tariffs on Chinese imports and threatened export controls on critical software sparked a market plunge. The drop triggered over $19 billion in liquidations across leveraged crypto positions, the largest in crypto history.
Market analysts note that Bitcoin’s price movements increasingly mirrored traditional stocks this year. Linh Tran, senior market analyst at XS.com, said, “In 2025, the market showed that Bitcoin increasingly exhibits the characteristics of a risk asset, with notable correlation to the U.S. equity market.”
Historically, Bitcoin set itself apart from stocks as an alternative investment. But with broader adoption by retail and institutional investors, analysts say its price trends now closely follow stock market sentiment, monetary policy shifts, and concerns about AI-related stock valuations.
Despite volatility, the crypto industry achieved regulatory wins in Washington. The Securities and Exchange Commission dismissed several lawsuits against major exchanges like Coinbase and Binance. Additionally, a landmark law establishing federal rules for dollar-pegged crypto tokens was passed.
Trump’s pro-crypto stance and his family’s ventures have further mainstreamed digital assets. Crypto companies donated over $245 million in the 2024 election cycle to support pro-crypto candidates, including Trump.
While Bitcoin set new highs in 2025, uncertainty around market structure reforms and SEC rules could impact its performance moving forward. Analysts predict that Bitcoin may continue to closely track traditional risk assets in the coming year.
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