Author | IOSG Co-founder Jocy
This is a fundamental shift in market structure, while most people are still using old cycle logic to view the new era.
2025 crypto market review, we see a paradigm shift from retail speculation to institutional allocation, core data shows institutional holdings at 24%, retail exit at 66% — — 2025 crypto market turnover is complete. Forget the four-year cycle, the crypto market in the institutional era has new rules! Let me break down the truth behind this 'worst year' with data and logic.
Surface data: 2025 asset performance
First look at the surface data — — 2025 asset performance. Traditional assets: Silver +130%, Gold +66%, Copper +34%, Nasdaq +20.7%, S&P 500 +16.2%. Cryptocurrency assets: BTC -5.4%, ETH -12%, mainstream altcoins -35% to -60%. Does it look bleak? Keep reading.
But if you only look at the price, you will miss the most important signals. Although BTC is down 5.4% annually, it has reached a historical high of $126,080 during that period. More importantly: what happened while the price was falling? BTC ETF net inflow of $25 billion in 2025, total AUM reaching $114–120 billion, with institutional holdings accounting for 24%. Some are in panic, while others are buying.
The first key judgment: market dominance has shifted from retail to institutional investors.
The approval of the BTC spot ETF in January 2024 is a watershed moment. The market, previously dominated by retail and OG, is now led by macro investors, corporate treasuries, and sovereign funds. This is not just a simple change of participants, but a rewriting of the rules of the game.
Data supports this judgment: BlackRock IBIT reached $50 billion AUM in 228 days, becoming the fastest-growing ETF in history. It now holds 780,000–800,000 BTC, surpassing MicroStrategy's 670,000 BTC. Grayscale, BlackRock, and Fidelity together occupy 89% of total assets in BTC ETFs. 13F investment fund plans show that 86% of institutional investors currently hold or plan to allocate digital assets. The correlation of BTC with the S&P 500 rose from 0.29 in 2024 to 0.5 in 2025.
Looking again at the aggressive strategies of BlackRock and MicroStrategy. BlackRock IBIT holds about 60% of the BTC ETF market share, with a holding of 800,000 BTC, surpassing MicroStrategy's 671,268 BTC. Institutional participation continues to rise: 13F filing institutions hold 24% of total ETF AUM (Q3 2025); the proportion of more professional institutional investors reaches 26.3%, an increase of 5.2% from Q3; major asset management companies account for 57% of 13F BTC ETF holdings, professional hedge fund institutions occupy 41% of BTC ETFs, together accounting for nearly 98% — indicating that current institutional holdings are mainly from these two types of professional investors, not including pensions, insurance companies, and other more conservative institutions (which may still be observing or just starting to allocate); FBTC institutional holdings account for 33.9%.
Major institutional investors include Abu Dhabi Investment Council (ADIC), Mubadala sovereign wealth fund, CoinShares, Harvard University endowment fund (holding $116 million in IBIT), etc. Major traditional brokers and banks have also increased their holdings in Bitcoin ETFs. Wells Fargo reported holdings of $491 million, Morgan Stanley reported $724 million, and JPMorgan reported $346 million. This shows that Bitcoin ETF products are being continuously integrated by major financial intermediaries. The question arises: why are institutions continuously building positions at 'high levels'?
Because they are not looking at the price, but at the cycle.
After March 2024, long-term holders (LTH) have cumulatively sold 1.4 million BTC, valued at $121.17 billion. This is an unprecedented supply release. But the miracle is — the price did not crash. Why? Because institutions and corporate treasuries absorbed all this selling pressure.
The three waves of selling by long-term holders: from March 2024 to November 2025, long-term holders (LTH) have sold a total of about 1.4 million BTC (valued at $121.17 billion). The first wave (end of 2023 - early 2024): ETF approval, BTC $25K→$73K; the second wave (end of 2024): Trump elected, BTC surging to $100K; the third wave (2025): BTC remains above $100K.
Unlike the single explosive distributions in 2013, 2017, and 2021, this time is characterized by multi-wave continuous distribution. Over the past year, we have been sideways at the high point of BTC for a year, which has never happened before. BTC that has not moved for over 2 years has decreased by 1.6 million since early 2024 (approximately $140 billion), but the market's absorption capacity has strengthened.
Meanwhile, what are retail investors doing? Active addresses continue to decline, Google searches for 'Bitcoin' have fallen to an 11-month low, small transactions of $0-$1 have decreased by 66.38%, and large transactions over $10 million have increased by 59.26%. River estimates that retail investors will net sell 247,000 BTC (about $23 billion) in 2025. Retail is selling, institutions are buying.
This leads to the second key judgment: we are currently not at the 'top of the bull market', but rather in the 'institutional accumulation period'.
Traditional cycle logic: retail frenzy → price surge → crash → restart. New cycle logic: institutional stable allocation → reduced volatility → price center elevation → structural increase. This explains why prices remain sideways while capital inflows continue.
The policy environment is the third dimension. The Trump administration's policies for 2025 have been implemented: crypto executive order (signed on 1.23), strategic Bitcoin reserves (~200,000 BTC), GENIUS Act stablecoin regulatory framework, SEC chair change (Atkins takes office). Pending: market structure bill (77% probability of passing before 2027), stablecoin purchases of short-term U.S. treasury bonds (scale expected to grow tenfold in the next three years).
Potential impact of the 2026 midterm elections: 435 House seats and 33 Senate seats will be contested in 2026. In 2024, 274 'crypto-friendly' candidates were elected, but banking lobby groups plan to invest over $100 million to counter the influence of crypto donations. Polls show that 64% of crypto investors consider a candidate's crypto stance 'very important'. The policy friendliness is unprecedented.
But there is a timing window issue here: the midterm elections in November 2026. Historical pattern: 'Election year policies take the lead' → intensive policy implementation in the first half → waiting for election results in the second half → increased volatility. Therefore, the investment logic should be: the first half of 2026 = policy honeymoon period + institutional allocation = optimistic; the second half of 2026 = political uncertainty = increased volatility.
Why is 2025 expected to be the 'worst performance' for crypto, yet I remain optimistic?
Now back to the initial question: why is 2025 expected to be the 'worst performance' for crypto, yet I remain optimistic? Because the market is completing a 'hand-off': from retail hands to institutional hands, from speculative chips to allocation chips, from short-term games to long-term holdings. This process will inevitably accompany price adjustments and volatility.
How do you view the institutional target price?
VanEck: $180,000; Standard Chartered: $175,000-$250,000;
Tom Lee: $150,000; Grayscale: new highs in the first half of 2026.
Not blind optimism, but based on: continuous inflow of ETFs, listed companies' treasury DAT increases (134 companies holding 1.686 million BTC globally), an unprecedented policy window period in the U.S., and institutional allocation just beginning.
Of course, risks still exist: macro factors include Federal Reserve policies and a strong dollar; regulatory aspects may see delays in market structure bills; market factors could see long-term holders continuing to sell; political factors make the midterm election results uncertain. But the other side of risk is opportunity. When everyone is bearish, it is often the best time to position.
The final investment logic: short-term (3–6 months): $87K-$95K range volatility, institutions continue to build positions; mid-term (first half of 2026): policy + institutional dual drivers, target $120K-$150K; long-term (second half of 2026): increased volatility, watch election results and policy continuity.
Core judgment: this is not a cycle peak, but the starting point of a new cycle.
Why do I have this confidence? Because history tells us: in 2013, retail dominated, with a peak of $1,100; in 2017, the ICO frenzy peaked at $20,000; in 2021, DeFi+NFT peaked at $69,000; in 2025, institutions entered, currently at $87,000. With each cycle, participants are more professional, the amount of funds is larger, and the infrastructure is more complete.
The 'worst performance' in 2025 essentially represents a transition period from the old world (retail speculation) to the new world (institutional allocation). The price is the cost of the transition, but the direction has been determined. When BlackRock, Fidelity, and sovereign funds build positions on the left side, retail investors are still wondering 'will it drop again'. This is the cognitive gap.
Summary
Final summary: 2025 marks the acceleration of institutionalization in the crypto market. Although the annual return for BTC is negative, ETF investors show strong 'HODL' resilience. 2025 appears to be the worst for crypto, but in reality: the largest scale of supply hand-off, the strongest institutional allocation willingness, the clearest policy support, and the most extensive infrastructure improvement. Price down 5%, but ETF inflow $25 billion. This is in itself the biggest signal.
As long-term practitioners and investors, our job is not to predict short-term prices but to identify structural trends. Key points to watch in 2026 include: legislative progress on market structure bills, the possibility of expanding strategic Bitcoin reserves, and policy continuity after the midterm elections. In the long run, the improvement of ETF infrastructure and regulatory clarity lays the foundation for the next round of increases.
When fundamental changes occur in market structure, old valuation logic becomes ineffective, and new pricing power will be rebuilt. Stay rational, stay patient.
Data sources: CoinDesk, CryptoSlate, Glassnode, CoinShares, Farside Investors, Strategy official website, CME Group, Yahoo Finance
Does not constitute investment advice, DYOR