Crypto Won In 2025—But Bitcoin Fell. Can They Rise to the Occasion?

Key Takeaways Retail crypto's mood is "extraordinarily negative," but institutional investors are "unremittingly bullish," according to Bitwise Asset Mangement's Matt Hougan. Amberdata's Greg Magadini expects interest in bitcoin as a "debasement hedge" to pick up next year. The price of bitcoin soared above $126,000, a record, this year, but those gains evaporated.Getty Images The rise and subsequent retreat of bitcoin perfectly encapsulates the crypto industry's year. It won big-but it doesn't have much to show for it yet. The price of bitcoin, the world's most well-known cryptocurrency, soared above $126,000, a record, but those gains evaporated and it's poised to finish down for 2025. The industry welcomed the passage of stablecoin legislation , eased regulation , and the proliferation of new ways to buy in , but by many measures it has yet to reap the benefits. Despite all this, plenty of reasons for optimism regarding the both sector and the currencies themselves remain. Next year could be when the effects of institutional buy-in and regulatory shift will start to show, crypto watchers say. Bitcoin ( BTCUSD ) could break out of its rut to book new highs, experts say, while altcoins could get a regulatory boost. And interest in "tokens"-the digital representation of assets like the dollar or stocks-could take off, further extending the investing world into digital space. "If you talk to retail crypto, the vibe is extraordinarily negative. They look at their world, which extends out a few weeks in time, and see dark clouds-and so they're selling," Matt Hougan, CIO of Bitwise Asset Management told Investopedia . "And then if you talk to institutional investors, they're just unremittingly bullish." Why This Matters to Crypto Investors The crypto industry has said that regulation was holding back its potential and that it would upend and replace the existing financial system. Now that a crypto-friendly administration has paved the way, investors are waiting for some of those promised developments to be realized. Bitcoin's supporters see reasons for optimism in the broader outlook for markets in 2026. The prospect of lower interest rates is generally beneficial to risk assets and could both fuel retail appetite for and institutional investor interest in crypto. The coming wave of capital implied by major financial institutions like Morgan Stanley and Merrill Lynch offering access to crypto ETFs to their clients, and big university endowments like those of Harvard and Brown buying in, could also lift bitcoin next year, Hougan said. He expects institutional demand to outpace new supply in the years to come. Since crypto ETFs launched in 2024, they have bought more than 700,000 bitcoin, roughly twice the number of new coins produced by the Bitcoin network over the same period, according to a Bitwise report. The so-called debasement trade -in which investors seek hedges, such as crypto or other assets, against high government debt and a declining dollar-may also come back into play, drawing investor interest next year. "For individuals investing against or hedging their debasement risk, bitcoin makes a lot of...

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