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Crypto’s Performance in 2025
The cryptocurrency market has navigated the year without facing a major scandal or a systemic failure. However, it is still poised to be one of its most challenging years.
Bitcoin’s Fluctuating Value
Bitcoin was thriving until October, reaching a high of $126,000—an increase of over 30% since January. However, various factors have erased these gains, and it is currently down 7% for the year, significantly trailing behind the S&P 500, which increased by 15%.
Changing Regulatory Atmosphere
The industry has lost previous scapegoats: the stringent regulations under the Biden administration have been replaced by a pro-crypto agenda led by the so-called “crypto president.” Additionally, Congress is pushing industry-favorable legislation, and institutional investments have surged, providing billions through Bitcoin ETFs.
Persistent Challenges in the Crypto Market
Despite these advancements, the crypto market struggles to gain stability. After remaining around $90,000 for some time, another sharp selloff has seen bitcoin drop to about $86,000.
Internal Issues Affecting Investor Sentiment
For those in the crypto community looking for a target to blame during this bear market, the reflection might lead back to their own practices.
Market Dynamics and Investor Psychology
The market’s decline can be attributed to several factors, especially a rapid increase in leveraged trading positions that faced liquidation during an October flash crash. However, the prolonged downturn likely relates to broader issues than just this incident.
Retail Investor Concerns
Eswar Prasad, an economist from Cornell University, notes that retail investors are caught between fear of missing out on lucrative returns and discomfort with crypto’s unsavory elements. He suggests this dynamic significantly affects volatility in crypto pricing.
