Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Bitcoin endured a roller-coaster year in 2025, surging to record highs before surrendering much of those gains, ultimately ending the year slightly below where it began.
The world’s most well-known cryptocurrency climbed to an all-time high of $126,000 in early October, buoyed by optimism around regulation and strong inflows into Bitcoin exchange-traded funds (ETFs). However, the rally proved short-lived. Gains were reversed in the third quarter, with Bitcoin falling sharply from its October peak to below $86,000 by late November. On Tuesday (December 30), Bitcoin was trading below $88,000.
Crypto markets remained subdued through the festive period, with total market capitalisation hovering around $3 trillion, according to analysis from eToro. Bitcoin, which accounts for nearly two-thirds of total crypto market value, continues to trade within a narrow range between $85,000 support and $90,000 resistance, the trading platform said.
“Crypto markets have been fairly muted over the festive season, with Bitcoin remaining range-bound and seemingly in need of a catalyst to drive prices higher,” said Simon Peters, Crypto Market Analyst at eToro.
“It’s been a difficult year for cryptoassets,” Peters added. “While Bitcoin did reach a new record high, it has since reversed those gains and is currently trading below where it started the year.”
Analysts point to several factors behind Bitcoin’s sharp pullback. One key driver has been sustained selling by long-term holders. According to Bloomberg analysis, coins held for years are being divested at some of the fastest rates in recent memory, just as the market’s capacity to absorb them has weakened. In 2025 alone, nearly $300 billion worth of Bitcoin that had remained dormant for over a year re-entered circulation.
For much of the year, this profit-taking was absorbed by strong demand from newly launched ETFs and crypto investment firms. However, that demand has since faded. ETF flows have turned negative, derivatives volumes have declined, and retail participation has thinned. As Bloomberg noted, the same supply is now landing on a weaker market with fewer active buyers.
Some analysts see this distribution by long-term holders as a natural phase of the market. “When you’re up 1,000x to 10,000x, it is natural to see some of that distribution take root,” Hassan Ahmed, head of Coinbase Global Inc.’s Singapore operations, told Bloomberg TV.
Bitcoin’s price movements have traditionally followed a four-year cycle linked to its halving events, which reduce new supply issuance approximately every four years. However, 2025 has challenged that historical pattern, with Bitcoin heading into the final days of the year down around 6%.
According to Farhan Badami, Market Analyst at eToro, a year-end rally had been expected to preserve the cycle, but it failed to materialise. “A failure to do so may suggest that Bitcoin’s long-standing patterns are beginning to shift,” he said. “Rather than signalling weakness, this could reflect a maturing market increasingly driven by fundamentals rather than cycle-driven speculation.”
Despite the volatility, analysts point to several positive developments during the year. Major financial institutions accelerated experimentation with blockchain-based payments and tokenised assets, further embedding cryptocurrencies within real-world financial systems. “While overall price performance was mixed, the broader crypto ecosystem continued to mature, laying an important foundation as the market transitions into the new year,” Badami said.
Institutional participation also deepened, particularly through ETFs. Badami noted that the iShares Bitcoin ETF recorded $24 billion in inflows, making it the fifth-highest ETF globally by inflows this year and underscoring sustained institutional demand. Spot cryptocurrency ETFs, which directly hold the underlying digital asset, have provided investors with regulated market access without the need to manage wallets or private keys.
Looking ahead, analysts expect increased institutional adoption to help moderate price swings over the medium to long term. “Growing institutional participation, including large ETF allocations and corporate treasury holdings, has the potential to dampen extreme volatility and extend market cycles,” Badami said, adding that Bitcoin’s volatility has gradually declined while its correlation with traditional assets has increased as mainstream investors integrate digital assets into their portfolios.
Interest in digital assets has also accelerated rapidly in the UAE, positioning the country among the world’s leading markets for crypto adoption and usage.
“Progressive regulatory frameworks have played a key role in accelerating adoption and fostering innovation across the digital asset ecosystem in the UAE,” eToro said.
Looking ahead to 2026, analysts remain broadly optimistic about Bitcoin and the wider crypto market. With more financial activity moving on-chain — including tokenised funds and real-world assets — crypto is increasingly viewed not as a short-term trade but as a long-term allocation within diversified investment portfolios, supported by clearer regulation and growing participation from banks and fintech firms.
