With a series of record highs and crushing sell-offs, 2025 has been a rollercoaster ride for bitcoin, the world's largest cryptocurrency, which is at risk of ending the year with its first annual decline since 2022.
The world's main stock benchmarks have also had a turbulent year, repeatedly hitting record peaks and then pulling back as worries over tariffs, interest rates and a possible AI bubble whipsawed markets. While equities are mostly up year-to-date, bitcoin's overall correlation with share prices has strengthened markedly this year.
Analysts say bitcoin's gyrations increasingly tracked stock market sentiment as traditional retail and institutional investors jumped into cryptocurrencies, which next year may be even more closely tethered to factors driving stocks and other risk assets, such as monetary policy shifts and nervousness over the lofty valuations of AI-related stocks.
"Crypto reacting to broader equities has been a consistent theme in 2025," said Jasper De Maere, desk strategist at crypto algorithmic trading firm Wintermute. Bitcoin was hovering around $89,000 on Monday.
After soaring earlier this year with the election of crypto-friendly U.S. President Donald Trump, cryptocurrencies - along with stocks - plummeted in April on his tariff announcements, but quickly rebounded. Bitcoin went on to hit an all-time peak above $126,000 in early October.
But just days later, on October 10, the market plunged again when Trump announced a new tariff on Chinese imports and threatened export controls on critical software. That sparked more than $19 billion worth of liquidations across leveraged crypto market positions, the largest liquidation in crypto history.
Bitcoin has struggled to regain its footing ever since and in November experienced its biggest monthly drop since mid-2021, although options market bearishness has ebbed a little in recent weeks, according to options platform Derive.xyz.
Traders as of late last week had assigned a 15% probability that bitcoin will finish the year below $80,000, compared with the 20% probability they had assigned just a few weeks ago.
That's still a blow for crypto bulls, including Michael Saylor's Strategy, the world's biggest bitcoin hoarding company, which had projected as recently as October 30 that the token would hit $150,000 this year. Analysts at Standard Chartered last year forecast bitcoin would hit $200,000 by the end of 2025, due in part to flows into bitcoin exchange-traded funds.
In a change of tune, Strategy CEO Phong Le warned on a podcast last month of a possible "bitcoin winter." In October, Standard Chartered forecast bitcoin would fall below $100,000 but said that may be the last time it will hit that low, according to media reports.
Saylor, speaking to Reuters last week, said his company could survive a 95% fall in the price of bitcoin.
Those April and October plunges highlighted the growing correlation between bitcoin and equities, and in particular, artificial intelligence stocks, which share similar attributes and have been hit by worries that valuations are in bubble territory.
Historically, bitcoin and stocks did not move in tandem because crypto was seen as an alternative investment. But with broader crypto adoption by traditional retail investors and some institutions, the correlation looks to be strengthening, analysts said.
