Since breaking the $126,000 mark in October, Bitcoin's price has dropped significantly, erasing all gains made in 2025 at one point, before stabilizing during early trading in Asia on Monday. This sharp decline from historical highs occurred in a year when Bitcoin's authority was supposed to be consolidated.
Wall Street has entered the arena, exchange-traded funds (ETFs) are bringing cryptocurrency into mainstream portfolios, and the Trump administration has fully embraced cryptocurrency.
However, the market has rapidly declined without any obvious incentives. Data shows that Bitcoin's total market capitalization has plummeted by about $600 billion from its October peak. In the cryptocurrency market, volatility is commonplace, but what distinguishes this time is the rapid erosion of market confidence, with almost no convincing reasons.
Anxiety is spreading on trading desks and social media. Traders are sifting through old charts, revisiting old theories, and searching for buyers. Because on Wall Street, there are no traditional rules for Bitcoin—there is neither a stable correlation nor an established risk framework. Some can only rely on the models they are most familiar with: the four-year halving cycle.
According to the underlying design, the supply of Bitcoin is halved approximately every four years. Historically, the occurrence of 'halving events' often triggers a speculative frenzy, followed by painful collapses, and this usually has a lag because 'miners'—the operators of powerful computers that maintain the Bitcoin network—tend to sell their Bitcoin holdings when prices start to fall.
In the current cycle, the 'halving' occurs in April 2024. Then Bitcoin's price peaked this October. This roughly aligns with past rhythms. But as financially strong buyers begin to sway the market, whether this scenario can repeat itself becomes uncertain.
The sentiment of retail investors in the cryptocurrency market is very poor, and the market may still have room to decline, said Matthew Hougan, Chief Investment Officer of Bitwise Asset Management; he believes that prices will rise again next year. 'People are worried about a repeat of the four-year cycle and do not want to experience another 50% pullback. So people are retreating in advance.'
