Bitcoin’s 2025 review: The “violent transformation” hidden behind the year’s deceptively flat price chart

2025 delivered a brutal lesson in market structure for Bitcoin. The year began with political momentum and drifted into a summer of aggressive policy signals.

Yet, it snapped into one of the sharpest boom-to-bust sequences in the asset’s history.

By December, the price had round-tripped, leaving the asset flat for the year. But the flat chart masked a violent transformation underneath.

While Wall Street banks finally opened their doors and ETFs vacuumed up record capital, the network’s physical infrastructure faced a solvency crisis.

CryptoSlate has compiled some of the major trends that defined the market in 2025 below:

Bitcoin Reserve race

President Trump moved from election promises to execution. On March 6, the White House signed Executive Order 14233, formally establishing a Strategic Bitcoin Reserve (SBR).

The order consolidated forfeited federal bitcoin holdings into a dedicated US Digital Asset Stockpile, ending the era of sporadic auctions by the US Marshals. A week later, lawmakers introduced the BITCOIN Act of 2025 to codify this framework.

This legislation transformed the US government from a net seller into a strategic holder, signaling to global sovereigns that Bitcoin is a recognized reserve asset.

Following this lead, states like Texas and Pennsylvania launched similar initiatives. Internationally, France, Germany, the Czech Republic, and Poland began exploring sovereign accumulation.

In the corporate sector, the “Bitcoin Treasury” trend accelerated. Strategy (formerly MicroStrategy) and over 100 other public companies now hold more than 1 million BTC on their balance sheets, according to Bitcoin Treasuries data.

Sam Callahan, the director of Strategy and Research at Oranje BTC, explained that these entities embraced BTC because it “is a superior reserve asset to gold.”

According to him:

The regulatory green light

Another major milestone that defined the year was the traditional financial regulatory environment that shifted to accommodate Bitcoin.

Over the past year, the US Securities and Exchange Commission (SEC) and its sister financial organizations, such as the Commodity Futures Trading Commission (CFTC), have made significant regulatory progress that has enshrined Bitcoin into the traditional financial system.

For context, the CFTC approved Bitcoin as a valid margin in regulated derivatives markets, and the US Federal Housing also recognized the top crypto as an asset for mortgage qualification in the United States.

However, the most significant changes came from the banking regulators, which fully embraced Bitcoin.

Earlier this month, the Office of the Comptroller of the Currency (OCC) issued Interpretative Letter 1188. This document clarified that national banks can execute “riskless principal” crypto transactions.

Previously, banks hesitated to broker trades because they did not want to hold volatile assets on their balance sheets. A “riskless principal” trade solves this. It allows a bank to buy an asset from a seller and resell it to a buyer immediately. The bank facilitates liquidity but never holds market risk.

This letter, combined with conditional charter approvals for firms like BitGo, Fidelity Digital Assets, and Ripple National Trust Bank, effectively integrated crypto into the US banking stack.

TradFi opens the gates

Due to these regulatory milestones, banks that hitherto treated Bitcoin as a reputational risk have changed their stance. In 2025, they began fighting for market share.

Notably, CryptoSlate previously reported that 60% of the top 25 US banks now pursue strategies to sell, safeguard, or advise on Bitcoin.

This shows that major financial institutions like PNC Bank, Morgan Stanley, JPMorgan, and others opened their operations to enable Bitcoin trading and custody for interested clients.

Considering this level of growth, Bitcoin analyst Joe Consorti argued that BTC had become “too big for Wall Street to ignore.”

Bitcoin ETFs

Away from the banks embrace of Bitcoin, the Bitcoin exchange-traded fund market also provided strong performance for industry players this year.

BlackRock’s iShares Bitcoin Trust (IBIT) dominated the ETF landscape. This year, IBIT has attracted over $25 billion in inflows, ranking it sixth among all US ETFs.

Crucially, investors used Bitcoin differently from gold. While the SPDR Gold Shares (GLD) saw inflows as gold hit record highs, Bitcoin ETF inflows persisted even as BTC's price stagnated.

Eric Balchunas, Bloomberg's ETF analyst, said:

Indeed, BlackRock, the largest asset management firm in the world, had described BTC as one of this “year’s biggest investment themes.”

Considering this, market analysts explained that investors treated Bitcoin as a structural accumulation play rather than a momentum trade. 

Meanwhile, other positive developments within the ETF complex saw the US SEC approve “in-kind” creations and redemptions for spot ETFs. This technical change enabled Authorized Participants (APs) to swap actual BTC for ETF shares, rather than first converting to cash.

At the same time, the financial regulator also allowed options on IBIT to go live. This provided hedgers and basis traders with the necessary tools to manage risk, completing the institutional derivatives stack.

Bitcoin's price boom and bust

Unsurprisignly, BTC's price action followed its own volatile script. In early October, Bitcoin broke resistance to set a new all-time high above $125,000.

While the government and ETFs bought, long-term holders sold. On-chain data showed that wallets holding Bitcoin for 155 days or more contributed heavily to the October rally.

This distribution, combined with macro-deleveraging, drove prices back under $90,000, which represented an over 30% correction.

Meanwhile, global macroeconomic conditions complicated the picture.

The US economy has seen significant Federal Reserve rates cut this year, with some arging that these moves were a positive for BTC price performance. However, the Bank of Japan (BoJ) simultaneously inched rates higher, tightening global liquidity and squeezing speculative carry trades.

Still, despite this market conditions, Bitcoin advocates believe the top crypto would shine. Pierre Rochard, the CEO of the Bitcoin Bond Company, said:

BTC miners and AI

While Wall Street integrated Bitcoin, the miners securing the network faced a crisis.

Following the October peak, BTC's hashrate collapsed from a peak of 1.3 zetahash per second (zh/s) to 852 EH/S recently. It has recovered to 1.09 zh/s as fof press time.

Hashrate is the lifeblood of Bitcoin security, which is used to drive the network trust. The higher the hashrate, the harder it is for any attacker to rewrite Bitcoin’s ledger.

So, as BTC's price corrected below $90,000, older machines became a liability to Bitcoin miners.

This is because the total cost to produce 1 BTC (including depreciation) for the average listed miner hovers near $137,800. With spot prices trading at a $47,000 discount to production cost, margins evaporated.

To survive, miners pivoted to Artificial Intelligence (AI) and High-Performance Computing (HPC). Seven of the top ten miners now report revenue from AI contracts.

Google emerged as a key financier in this shift. Rather than acquiring mining firms outright, Google provided credit support to help miners upgrade their infrastructure for AI workloads.

This transition signals a permanent change in the industry: miners are evolving into hybrid energy-compute centers to hedge against Bitcoin volatility.

Past ghosts

Despite all of the institutional progress and positives of the past year, the psychological fears remained.

• Mt. Gox: The trustee extended the repayment deadline to October 2026. However, a sudden transfer of ~10,600 BTC from estate wallets in November triggered an algorithmic sell-off, proving that “zombie supply” still dictates short-term sentiment.
• The Quantum Threat: Over the past year, the Bitcoin development community have accelerated discussions about how to secure the network against future quantum computing attacks. While many argue that the fears are still years away, the worries about the threat remain dominant across broader industry discussions.

The verdict

2025 was the year of integration. The “plumbing” is no longer theoretical. ETFs now function with in-kind efficiency, banks possess the regulatory clearance to trade, and the U.S. government formally holds the asset. However, the miner insolvency crisis and the LTH sell-off proved that structural adoption does not guarantee “up only” price action. Bitcoin is now fully exposed to the ruthless efficiency of macro markets.