2025 has been a year defined by extremes – record peaks followed by violent selloffs – and bitcoin now risks ending the year with its first annual decline since 2022. At YourDailyAnalysis, we see this shift as part of a broader realignment in which crypto markets increasingly mirror the dynamics of traditional risk assets.
Bitcoin surged early in the year, lifted by optimism over a crypto-friendly administration, only to stumble repeatedly as tariffs, policy risks and tech-sector corrections rattled global markets. The sharp April downturn was followed by a dramatic recovery, culminating in an all-time high above $126,000 in early October. But within days, the market was hit by another shock: new tariff announcements and threats of export controls triggered the largest leveraged wipeout in crypto history – more than $19 billion in liquidations.
Since then, bitcoin has struggled to regain momentum. November delivered the steepest monthly decline since mid-2021, although bearish sentiment in the options market has eased marginally. Traders recently assigned a 15% probability that bitcoin ends the year below $80,000 – down from 20% just weeks earlier, but still a notable disconnect from the bold forecasts that dominated early 2025. Crypto optimists, including some of the largest corporate accumulators of bitcoin, had projected year-end targets of $150,000–$200,000, fueled in part by expectations for ETF-driven inflows.
What has become unmistakable is the degree to which bitcoin now moves in tandem with equities. The April and October drawdowns reinforced a growing correlation between bitcoin and major indices – particularly the AI-heavy NASDAQ names, which exhibit similar volatility, speculative positioning and sensitivity to valuation concerns. At YourDailyAnalysis, we view this as evidence that bitcoin is no longer treated as an “alternative” asset but is firmly integrated into the broader ecosystem of investor risk appetite.
Correlation data supports this shift. The average 2025 correlation between bitcoin and the S&P 500 has risen to around 0.5, up from 0.29 in 2024. For the NASDAQ 100, dominated by high-growth technology companies, the correlation climbed from 0.23 to 0.52. This reflects the growing presence of traditional investors, converging market strategies and the reinterpretation of crypto as a speculative extension of tech-driven market cycles.
Rates have become another defining pressure point. While long-term historical patterns are limited, recent years have made one thing clear: dovish Federal Reserve signals tend to support crypto, while hawkish commentary often drives selling. The October repricing of interest-rate expectations weighed heavily on bitcoin, even as subsequent data firmed market conviction that a 25-basis-point cut is likely at the upcoming Fed meeting.
Analysts increasingly believe that the Fed’s decision – combined with sentiment toward AI-linked equities – will be a central driver of crypto prices in the near term. As we assess the landscape at Your Daily Analysis, the trajectory into early 2026 will depend as much on macro liquidity and risk tolerance as on crypto-specific developments.
Bitcoin ends the year in a position that reflects both its maturity and its fragility: it has become part of the global financial architecture – and now moves according to its rules.
