Bitcoin Could End 2025 with a Decline: New Risks in Volatile Markets

Bitcoin has had a turbulent year throughout 2025, marked by record highs and sharp sell-offs, and faces the risk of closing the year negatively for the first time since 2022. Global stock markets have experienced similar fluctuations due to concerns over tariffs, interest rate expectations, and a potential AI bubble, while the positive correlation between bitcoin and stocks has strengthened significantly this year. Analysts note that with traditional investors turning to crypto, bitcoin’s movements are becoming increasingly dependent on market sentiment. Wintermute strategist Jasper De Maere said, “The main theme for 2025 has become how crypto reacts to broader stock markets.” Records, Tariffs and Mass Purges Bitcoin, which rose at the beginning of the year with the election of pro-crypto President Donald Trump, fell sharply along with stocks in April with the announcement of tariffs; It then recovered and reached an all-time high in early October, exceeding $126,000. However, on October 10, Trump’s announcement of new tariffs on Chinese imports and export controls on critical software led to the liquidation of leveraged positions exceeding $19 billion, the largest liquidation in crypto history. From this point on, bitcoin struggled to recover and experienced its biggest monthly loss since mid-2021 in November. According to the derivatives platform Derive.xyz, traders last week priced in a 15% chance of bitcoin ending the year below $80,000. Source: Strategy, the company of major bitcoin investor Michael Saylor, predicted the price would reach $150,000 by the end of October; However, CEO Phong Le recently warned of a possible “bitcoin winter”. Standard Chartered also stated that the price could fall below $100,000 by the end of the year, but that this might be the “last time.” Saylor, in a statement to Reuters, said that his company could withstand even a 95% drop in the bitcoin price. The average correlation between bitcoin and the S&P 500 in 2025 was 0.5 (2024: 0.29). The correlation with the Nasdaq 100 is 0.52 (2024: 0.23). This increase shows that crypto has become particularly sensitive to volatility in AI stocks. Cosmo Jiang from Pantera Capital said, “Crypto was already weak after October 10th; risk markets have deteriorated further in recent weeks with the questioning of the AI ​​rally.”

Expectation of Interest Rate Cuts

Crypto has begun to react more and more to the interest rate path, just like stocks. It is stated that the Fed’s hawkish signals have been putting pressure on bitcoin since October. New data has increased the probability of a 25 basis point cut this week to 86%. Mo Shaikh, co-founder of Maximum Frequency Ventures, said, “In this environment, the Fed’s monetary support will be the main indicator that the entire crypto market is watching.” If you want, I can rewrite this news even shorter, more SEO-friendly, or with a different headline.