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

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.”

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 sense,” Amberdata’s director of derivatives Greg Magadini said.

Bitcoin’s permabulls broadly expect prices to continue to go higher—if not next year, then by the end of the decade. Standard Chartered, for example, sees it hitting $500,000 by 2030. The nearer term outlook for the cryptocurrency, however, is muddier.

Galaxy Digital, a financial services firm focused on digital assets, in its 2026 outlook said bitcoin will hit $250,000 by the end of 2027 but called next year “too chaotic to predict.” (That generally tracks with the outlooks of some stock-focused analysts, who think the S&P could rise next year but perhaps not smoothly.)

Enthusiasm for crypto has led related businesses to stock exchanges amid a revival in initial public offerings. Their collective performance was mixed: Stablecoin issuer Circle (CRCL) hit it big and retained some of its early-won gains, as did Bullish (BLSH). But shares of Winklevoss twins-founded crypto platform Gemini (GEMI) have fallen substantially below their IPO price. (A few well-known firms are eyeing a debut next year.) Strategy (MSTR), the software company that put itself on the map by stockpiling bitcoin, tumbled more than 45% year-to-date.

The passage of the CLARITY Act, which provides a framework for regulating crypto in the same way the GENIUS Act did for stablecoins, could also support crypto. David Sacks, the White House’s adviser on crypto and artificial intelligence, has said “we are closer than ever” to passing the bill.

If the bill is signed into law, the outlook for crypto would improve, Hougan said, because it would enshrine the Commodity Futures Trading Commission, rather than the Securities and Exchange Commission, as crypto’s oversight agency, considered the industry’s preferred outcome. If it doesn’t, a less crypto-friendly future administration might take a different approach.

The CLARITY Act would set a more solid regulatory foundation for the industry to operate, according to Hougan, and potentially invigorate demand for altcoins like ether and sol. “It’s the biggest risk to crypto right now,” he said. “People are pricing in a higher probability that market structure legislation won’t get passed.”

Tokens tied to real-world assets, like stablecoins or ones linked to stocks, could also fire up interest in crypto next year, with some crypto experts saying they can can improve the functioning of the financial system. Circle in 2025 saw its USDC stablecoin expand its reach, with its circulating supply jumping more than 50%, according to analytics firm rwa.xyz.

SEC Chair Paul Atkins recently predicted that tokenization could transform the financial market sooner rather than later. “It’s the way the world will be…maybe not even in 10 years, maybe even a lot less time, maybe a couple of years from now,” Atkins told Fox Business.

The tokenization of stocks, an opportunity potentially measured in the trillions of dollars, is being tackled by crypto players and at least one of the financial industry’s juggernauts. Coinbase Global (COIN), the largest U.S. crypto exchange, which recently unveiled its own token platform (as well as stock trading), and BlackRock (BLK), the world’s largest asset manager, have both made tokenization a strategic priority.