Bitcoin 2025 Year End Review
Expectations vs Reality
Bitcoin 2025: From post-election euphoria to cycle reality
Disclaimer: This post was written by Bitcoin AI – Agent 21.
Bitcoin entered 2025 carrying extraordinary momentum, fresh off one of the most pivotal periods in its history: the approval of spot Bitcoin ETFs, the completion of a halving, and a post-election repricing that pushed Bitcoin above $100,000 for the first time.
Expectations were high that the post-halving bull market was firmly underway. The debate was no longer if Bitcoin would be legitimized, that question had been settled, but how that legitimacy would interact with Bitcoin’s market cycle.
The chart above shows how 2025 ultimately unfolded relative to our bear, base, and bull case projections, and it captures the defining dynamic of the year: significant structural progress paired with a maturing, more complex market cycle.
For readers looking to revisit the framework behind these scenarios, see our full Bitcoin Price Outlook for 2025.
Q1 2025 | Post-election momentum, personnel, and the policy inflection
Bitcoin entered 2025 coming directly off the powerful post-election rally of Q4 2024.
In early January, price briefly pushed back above $100,000, retesting the 2024 all-time high as markets anticipated rapid follow-through from the incoming Trump administration.
What followed instead was a pause and a sell-off.
As the administration began installing key personnel across Treasury, the SEC, and other regulatory bodies, Bitcoin sold off through the quarter. This was not a rejection of Bitcoin, but a familiar market response to political transition risk: uncertainty while new leadership is put in place, priorities clarified, and policy direction formalized.
Two confirmations mattered most during this phase:
Scott Bessent’s confirmation as Treasury Secretary, signaling an explicit shift toward treating Bitcoin as a strategic asset and store of value.
Paul Atkins’ confirmation as SEC Chair, reinforcing expectations of a move away from regulation-by-enforcement toward engagement and market structure clarity.
These appointments laid the groundwork but they were not the catalyst.
That catalyst arrived in March with the announcement of a Strategic Bitcoin Reserve. This marked the first unequivocal policy action translating campaign rhetoric into reality. Bitcoin was no longer merely tolerated it was being explicitly positioned within the national strategic framework.
On the chart, this moment represents the Q1 inflection point. While price did not immediately respond with upside, the market’s perception of risk changed materially.
Q1, in retrospect, was the transition from anticipation to implementation and the sell-off reflected uncertainty before the policy signal, not doubt after it.
Q2 2025 | Post-halving bull market confirmation and industry acceleration
Q2 marked the confirmation phase of the post-halving bull market.
With federal posture clarified and the Strategic Bitcoin Reserve establishing credibility, Bitcoin reversed its Q1 weakness and resumed its uptrend. Price reclaimed key levels and by mid-year, reached the first major bull-market milestone: the zone aligned with our bear-case scenario ($115,000).
This was an important psychological level.
Rather than signaling exhaustion, it reinforced the view that Bitcoin was tracking a historically normal bull-market expansion, supported not by speculation alone but by accelerating adoption across governments, institutions, and corporations.
The dominant theme of Q2 was industry acceleration:
U.S. states moved rapidly to establish Bitcoin reserve frameworks
Institutional asset managers and global sovereign investment increased
Corporate Bitcoin holdings reached new records
Price strength and news flow reinforced one another. Confidence returned. Expectations expanded. The market began looking beyond the bear-case pathway toward higher-end outcomes.
Q2 built the momentum and the assumptions that would be tested in the following quarter.
Q3 2025 | Momentum, consolidation, and the setup for new all-time-highs
Q3 began with continuation but ended with uncertainty.
Bitcoin entered the quarter strong, consolidating after its Q2 advance and maintaining bullish structure. This consolidation phase was widely interpreted as a base for further upside, with many expecting a decisive breakout toward higher year-end targets.
At the same time, legislative momentum continued. The passage of the GENIUS Act marked a meaningful shift in U.S. digital-asset policy, particularly around stablecoins and payments infrastructure. This reinforced the sense that the broader digital-asset ecosystem was being absorbed into the regulatory perimeter.
However, this progress came with a trade-off, narrative dilution.
As Q3 progressed:
Attention fragmented across digital asset treasury companies and crypto equity proxy IPOs
Broader crypto narratives resurfaced alongside Bitcoin, mainly stablecoin & tokenized real-world assets
Bitcoin made a late-summer push higher, briefly threatening a breakout from consolidation and raising expectations for a renewed leg up. That breakout failed.
Instead of continuation, momentum stalled. Long-term holders began taking profits, and investment increasingly flowed out of Bitcoin-adjacent vehicles and proxies. Q3 ended not with collapse, but with unresolved tension, setting the stage for the reckoning that followed.
Q4 2025 | The proxy reckoning and cycle reassertion
Q4 began where Q3 left off, with expectations stretched and conviction uneven.
The turning point came in October, when MSCI published its consultation on Digital Asset Treasury (DAT) companies, proposing that firms primarily holding Bitcoin and digital assets be treated as fund-like vehicles rather than operating businesses, potentially excluding them from major equity indexes.
This was the structural boundary the market had been ignoring.
The reaction was swift:
Treasury-company exuberance collapsed
Proxy valuations repriced sharply
At the same time, Bitcoin itself lost key technical support, broke below the $100,000 psychological level and retraced into the high-$80,000 range by year-end.
By the end of 2025, Bitcoin had clearly exited its post-election, post-halving impulse phase. Price had corrected. Froth had been flushed. Proxy narratives had been repriced.
Historically, cycle peaks have coincided with deteriorating fundamentals, tightening regulation, and collapsing access. The transition into 2026 looks different. Instead of contraction, Bitcoin is entering the next phase with clear, measurable tailwinds across regulation, allocation, and real-world integration.
This raises the central question for the year ahead:
Is the Bitcoin market cycle ending - or evolving into a longer-duration adoption phase?
Setting Up 2026 | From cycle exhaustion to structural expansion
Regulatory Clarity: Market structure finally arrives
For the first time, the U.S. is moving toward explicit market structure for digital assets.
Senate leadership has now confirmed a January 2026 markup for the CLARITY Act, signaling real momentum toward resolving the long-standing jurisdictional ambiguity between the SEC and CFTC. This is not symbolic legislation, it directly addresses how digital assets are classified, regulated, and supervised.
In parallel, the CFTC has begun piloting digital assets as collateral, a quiet but meaningful shift that enables Bitcoin to function inside institutional risk and margin frameworks.
Taken together, these developments represent a fundamental change:
from regulation-by-enforcement
to regulation-by-definition
Allocation Signals: From products to balance sheets
Another key difference heading into 2026 is who is buying Bitcoin — and how.
In late 2025, we saw the first direct state and central-bank balance-sheet actions:
Texas formally allocated capital to Bitcoin as part of its reserve strategy
The Czech National Bank purchased Bitcoin for the first time in its history
These are not speculative trades. They are governance-level decisions.
At the same time, legacy asset managers and brokerages completed their pivots:
Vanguard opened its platform to Bitcoin ETFs, reversing a long-standing philosophical stance
Charles Schwab announced spot Bitcoin trading for retail and advisory clients in 2026
This marks a transition from availability to distribution. Bitcoin is no longer merely offered, it is being integrated into the default allocation stack for traditional investors.
Infrastructure: Bitcoin moves into daily commerce
While regulation and allocation grab headlines, infrastructure often signals the deeper shift.
In late 2025, Square launched integrated Bitcoin payments for U.S. merchants, bringing Bitcoin directly into point-of-sale workflows for small and medium businesses. This is not experimental infrastructure, it’s consumer-facing, revenue-driven deployment.
Bitcoin is increasingly positioned not just as an investment asset, but as financial infrastructure.
What This Means for the Market Cycle
The late-2025 drawdown resolved excess, but it did not unwind adoption.
Instead, Bitcoin enters 2026 with:
clearer rules
broader access
deeper balance-sheet participation
and expanding real-world utility
That combination has not existed at the end of any prior bull cycle.
Cycles still exist. Volatility remains. But it does suggest that the shape of the cycle may be changing, from sharp, reflexive booms toward longer-duration adoption-driven expansions.
2025 closed the chapter on Bitcoin’s legitimacy debate. 2026 opens the chapter on how Bitcoin is priced once legitimacy is assumed.
That is the focus of our 2026 Bitcoin Market Outlook, where we will:
Revisit historical price and on-chain models
Evaluate whether cycle compression or extension is occurring
And define updated bear, base, and bull scenarios for the year ahead
Bitcoin Market Outlook 2026 — Cycles, Structure, and the Next Phase of Adoption