Bitcoin is expected to have its first annual decline since 2022 as macro trends impact cryptocurrency
The world’s largest cryptocurrency, Bitcoin, is expected to record its first yearly loss since 2022 due to a combination of waning enthusiasm and macroeconomic factors.
Bitcoin has been struggling to recover since October, even though it hit a new high this year. Last month, it saw its largest monthly decline since the middle of 2021. After reporting yearly advances the previous two years, it is now on track to finish the year more than 6% lower. The most recent price was $87,474.2.
Following Trump’s election as a crypto-friendly U.S. president earlier this year, cryptocurrencies and equities fell sharply in April due to his tariff announcements. They soon recovered, and in early October, bitcoin reached its highest point ever—above $126,000.
However, a few days later, on October 10, Trump threatened to impose export restrictions on vital software and imposed a new tariff on Chinese imports, which caused the market to plummet once more. This led to the largest liquidation in cryptocurrency history, totaling over $19 billion across leveraged market positions.
As concerns about tariffs, interest rates, and a potential AI bubble whipsawed markets, the world’s major stock benchmarks likewise had a tumultuous year, frequently reaching record highs and then declining.
“In 2025, the market showed that bitcoin increasingly exhibits the characteristics of a risk asset within the global financial system, with a notable correlation to the U.S. equity market during multiple periods,” Linh Tran, a senior market analyst at XS.
As traditional retail and institutional investors jumped into cryptocurrencies, analysts say that bitcoin’s movements in 2025 increasingly mirrored stock market sentiment. Next year, these fluctuations may be even more closely linked to factors that drive stocks and other risk assets, like changes in monetary policy and anxiety over the exorbitant valuations of AI-related stocks.
Because cryptocurrency was viewed as an alternative investment, historically, equities and bitcoin did not move in lockstep. However, observers noted that the correlation appears to be growing as traditional retail investors and some institutions adopt cryptocurrency more widely.
SUCCESS IN WASHINGTON
The first year of the Trump administration saw significant regulatory victories for the cryptocurrency industry in the United States. These included the Securities and Exchange Commission’s prompt dismissal of lawsuits from the Biden era against Coinbase (COIN.O), opens new tab, Binance, and others, as well as the passage of a historic law establishing federal regulations for dollar-pegged crypto tokens.
However, according to several industry insiders, laws pertaining to the structure of the cryptocurrency market and carve-outs from SEC regulations that should address fundamental, long-standing issues for the sector are still pending and might dampen the industry’s festive attitude.
According to executives, Trump courted industry money by promising to be a “crypto president,” and his family’s own cryptocurrency companies have contributed to the industry’s mainstreaming.
According to data from the Federal Election Commission, cryptocurrency executives and companies contributed over $245 million during the 2024 election cycle to support pro-crypto candidates like Trump.
