The world’s largest cryptocurrency, Bitcoin, is on track to post its first annual loss since 2022, as macroeconomic pressures, trade tensions and weakening momentum weighed on the digital asset.
Despite reaching a record high earlier last year, bitcoin has struggled to regain traction since October. The digital asset suffered its steepest monthly decline since mid-2021 and now ended the year 2025 more than 6% lower, after posting gains in the previous two years. Bitcoin was last trading at $87,474.20.
According to Reuters, Cryptocurrencies surged earlier 2024 following the election of U.S. President Donald Trump, who campaigned on a pro-crypto platform. However, digital assets — along with global equities — tumbled sharply in April 2025 after Trump announced a new round of tariffs. Markets later rebounded, pushing bitcoin to an all-time high above $126,000 in early October.
The rally proved short-lived. On October 10. 2025, markets plunged again after Trump unveiled additional tariffs on Chinese imports and threatened export controls on critical software. The announcement triggered more than $19 billion in liquidations across leveraged crypto positions, marking the largest liquidation event in the history of the crypto market.
Global stock markets also endured a volatile year, repeatedly hitting record highs before retreating amid concerns over tariffs, interest rate uncertainty and fears of an overheated artificial intelligence sector.
“In 2025, the market showed that bitcoin increasingly exhibits the characteristics of a risk asset within the global financial system,” said Linh Tran, a senior market analyst at XS com. “There was a notable correlation with the U.S. equity market during multiple periods.”
Analysts say bitcoin’s price movements last year closely tracked broader stock market sentiment as traditional retail and institutional investors continued to pour money into digital assets. That trend could deepen in 2026, as cryptocurrencies become more sensitive to monetary policy changes and concerns over lofty valuations in AI-related stocks.
Historically, bitcoin traded independently from equities and was viewed as an alternative investment. But broader adoption by mainstream investors and institutions appears to be strengthening its correlation with traditional markets, analysts said.
The crypto industry secured several regulatory victories in the United States during the first year of the Trump administration. These included the Securities and Exchange Commission’s decision to drop Biden-era lawsuits against major crypto firms such as Coinbase and Binance, along with the passage of landmark legislation establishing federal rules for dollar-pegged stablecoins.
However, industry executives caution that broader market structure legislation — including exemptions from certain SEC rules — has yet to materialize. The absence of such reforms could dampen optimism and leave longstanding regulatory challenges unresolved.
Trump actively courted the crypto industry during his campaign, pledging to be a “crypto president.” Executives say his family’s own crypto ventures further helped push digital assets into the financial mainstream.
Crypto companies and executives donated more than $245 million during the 2024 election cycle to support pro-crypto candidates, including Trump, according to campaign finance data.
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