2025 has been a very volatile year for Bitcoin, with record highs and sharp declines intertwined. The world’s largest crypto asset is at risk of ending the year on a decline for the first time since 2022 due to the sharp swings it has experienced throughout the year.
Bitcoin 12 Month Chart
Bitcoin’s 2025 rally may end with a fall at the end of the year
Market concerns about tariffs, interest rates, and artificial intelligence have caused global stock indexes to fluctuate as well.
Analysts say the correlation between Bitcoin and the stock market has strengthened significantly this year, making the crypto asset even more sensitive to macro trends.
Bitcoin’s rise in early 2025 accelerated with the election of U.S. President Donald Trump, a cryptocurrency advocate. However, new tariffs announced in April sent a severe shock to both crypto markets and stocks.
Bitcoin has since recovered, reaching an all-time high of over $126,000 in early October. However, on October 10th, when President Trump announced new tariffs on imports from China, the market crashed again, causing more than $19 billion in deleveraging. This was the largest liquidation in the history of cryptocurrencies.
Bitcoin posted its steepest monthly decline since mid-2021 in November, and investors’ year-end price expectations also weakened. Market participants still see a 15% chance that Bitcoin will end the year below $80,000.
A few weeks ago, that percentage was about 20%. That’s a worrying situation for big investors like Michael Saylor’s firm Strategy, which expects annual profits of $150,000.
Experts believe that the synchronization between Bitcoin and stocks, especially AI companies, is mainly due to the increased participation of traditional investors and speculative awareness of both asset classes. According to LSEG data, the correlation between Bitcoin and the S&P 500 rose to an average of 0.5 through 2025, while the correlation with the Nasdaq 100 remained at 0.52.
Analysts say interest rate cut expectations and moves by artificial intelligence companies will determine Bitcoin prices in the final weeks of the year. There is an 86% chance that the US Federal Reserve will cut interest rates by 25 basis points this week, and the Fed’s message is expected to largely determine the direction of the crypto market.
*This is not investment advice.
