2025: The darkest year for the crypto market, and also the dawn of the institutional era.

Written by: Jocy, Founder of IOSG

This is a fundamental shift in market structure, while most people are still viewing the new era through the logic of the old cycle.

In the 2025 crypto market review, we see a paradigm shift from retail speculation to institutional allocation, with core data showing institutional holdings at 24% and retail investors exiting at 66% — the turnover in the 2025 crypto market is complete. Forget about 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.

1/ 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%

Cryptographic assets:

BTC -5.4%

ETH -12%

Mainstream Altcoins -35% to -60%

Looks bad? Keep reading.

2/ But if you only look at the price, you will miss the most important signal.

Although BTC had an annual decrease of -5.4%, it reached a historical high of $126,080 during that period.

More importantly: what happened while the price was falling?

BTC ETF net inflow in 2025: $250 million USD

Total AUM: $114-120 billion

Institutional holding ratio: 24%

Some are in panic, some are buying.

3/ This is the first key judgment:

Market dominance has shifted from retail investors to institutions.

The approval of the BTC spot ETF in January 2024 is a watershed moment. The market, previously dominated by retail investors and OGs, 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.

4/ The data supports this judgment:

BlackRock IBIT reached $500 billion AUM in 228 days, becoming the fastest-growing ETF in history. It now holds 780,000 to 800,000 BTC, surpassing MicroStrategy's 670,000 BTC. Grayscale, BlackRock, and Fidelity account for 89% of the total assets in BTC ETFs. 13F investment fund plans.

86% of institutional investors currently hold or plan to allocate digital assets.

The correlation between BTC and the S&P 500 rises from 0.29 in 2024 to 0.5 in 2025.

5/ Looking again at the aggressive strategies of BlackRock and MicroStrategy:

BlackRock IBIT holds about 60% market share of the BTC ETF, with a position of 800,000 BTC, surpassing MicroStrategy's 671,268 BTC.

Institutional participation continues to rise:

13F filing institutions hold 24% of the total AUM of the ETF (Q3 2025)

The proportion of professional institutional investors reached 26.3%, an increase of 5.2% compared to Q3.

Large asset management companies account for 57% of the 13F BTC ETF holdings, while professional hedge fund institutions account for 41% of the BTC ETF, with the two combined nearing 98%: this indicates that the current institutional holdings are mainly comprised of these two types of professional investors, excluding more conservative institutions like pension funds and insurance companies. ( They may still be observing or just starting to allocate ).

FBTC institutional holdings accounted for **33.9%**

Major institutional investors include the Abu Dhabi Investment Council (ADIC), Mubadala Sovereign Wealth Fund, CoinShares Harvard University Endowment Fund (holding $116 million IBIT), among others. Large 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 accumulating positions at “high levels”?

6/ 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, worth $121.17 billion.

This is an unprecedented supply release.

But the amazing thing is — the price did not collapse.

Why? Because institutions and corporate treasuries have absorbed all of this selling pressure.

7/ Three waves of selling by long-term holders:

Three Waves of Selling by OG Investors

From March 2024 to November 2025, long-term holders (LTH) are expected to cumulatively sell approximately 1.4 million BTC (worth $121.17 billion).

First wave ( end of 2023 - early 2024 ): ETF approval, BTC $25K→$73K

Second wave ( by the end of 2024: Trump elected, BTC surges to ). The third wave $100K in 2025: BTC has been long above (.

Unlike the single explosive distributions in 2013, 2017, and 2021, this time it is a multi-wave continuous distribution. In the past year, we have been in a sideways market at the peak of BTC for a whole year, a situation that has never occurred before. BTC that has not moved for over 2 years has decreased by 1.6 million coins (approximately $140 billion) since early 2024.

But the market's digestion capacity has improved.

8/ Meanwhile, what are retail investors doing?

The number of active addresses continues to decline.

Google search “Bitcoin” falls to an 11-month low

$0-) small transaction volume decreased by 66.38%

Transactions over $100K increased by 59.26%.

River estimates that retail investors will net sell 247,000 BTC in 2025 $1 about $1000 billion (

Retail investors are selling, while institutions are buying.

9/ This leads to the second key judgment:

It is currently not the “bull market top”, but rather the “institutional accumulation period”.

Traditional cycle logic: retail frenzy → price surge → crash → restart

New cycle logic: Institutional stable allocation → Volatility narrowing → Price center elevation → Structural increase

This explains why the price is consolidating, but capital inflow continues.

10/ The policy environment is the third dimension.

The Trump administration has been implemented in 2025:

Cryptographic Executive Order $230 1.23 Signed )

Strategic Bitcoin Reserve (~200,000 BTC)

GENIUS Act Stablecoin Regulatory Framework

SEC Chairman Change ( Atkins Takes Office )

To be determined:

Market Structure Bill (77% Probability of passing before 2027 )

Stablecoins purchase short-term U.S. Treasury bonds, with a tenfold growth in scale over the next three years.

Potential Impact of the 2026 Midterm Elections

In 2026, elections will be held for 435 House seats and 33 Senate seats. In 2024, 274 “pro-crypto” candidates were elected, but banking lobby groups plan to invest **( billion + to counter the impact of crypto donations. Polls show that 64%** of crypto investors believe a candidate's stance on crypto is “very important.”

The friendliness of the policy is unprecedented

11/ But there is a timing window issue here:

There will be a midterm election in November 2026.

Historical rule: “Election year policies take precedence”

→ In the first half of the year, policies were implemented intensively.

→ Waiting for election results in the second half of the year

→ Volatility Amplification

So the investment logic should be:

The first half of 2026 = Policy honeymoon period + Institutional allocation = Optimistic

Second half of 2026 = Political uncertainty = Increased volatility

12/ Now back to the initial question:

Why do I still have confidence despite the fact that cryptocurrency is “performing the worst” in 2025?

Because the market is completing a “rotation:”

From retail hands to institutional hands

From speculative chips → allocation chips

From short-term speculation → long-term holding

This process will inevitably be accompanied by price adjustments and fluctuations.

How to interpret the target price of an institution?

VanEck: $180,000

Standard Chartered: $175,000-$250,000

Tom Lee: $150,000

Grayscale: New highs in the first half of 2026

It is not blind optimism, but rather based on:

ETF continuous inflow

The listed company Dat has increased its holdings of ) globally, holding 1.686 million BTC across 134 companies $1 .

The unprecedented policy window period in the United States

Institutional allocation has just begun.

14/ Of course, risks still exist:

Macroeconomics: Federal Reserve Policy, Strong US Dollar

Regulation: The Market Structure Bill may be delayed

Market: LTH may continue to sell.

Politics: The results of the midterm elections are uncertain.

But the other side of risk is opportunity.

When everyone is bearish, it is often the best time to position oneself.

15/ The final investment logic:

Short-term ( 3-6 months ): $87K-( range fluctuations, institutions continue to accumulate positions.

Mid-term )2026 First half $95K : Policy + Institutional dual drive, target $120K-( Long term )2026 second half $150K : Increased volatility, watch the election results and policy continuity.

Core Judgment: This is not the peak of the cycle, but the starting point of a new cycle.

16/ Why do I have this confidence?

Because history tells us:

In 2013, dominated by retail investors, reaching a peak of $1,100.

The ICO frenzy in 2017 peaked at $20,000

In 2021, DeFi+NFT reached a peak of $69,000.

Institutional entry in 2025, currently $87,000

With each cycle, participants become more professional, the amount of funds increases, and the infrastructure becomes more complete.

The “worst performance” of 2025 is essentially:

Old world ( retail speculation ) towards the new world ( institutional allocation ) transition period.

The price is the cost of transition, but the direction has been determined.

When BlackRock, Fidelity, and sovereign funds are building positions on the left side,

Retail investors are still struggling with “Will it drop again?”

This is the cognitive gap.

18/ Final Summary:

The year 2025 marks the acceleration of the institutionalization process in the crypto market. Despite the negative annual returns of BTC, ETF investors show strong “HODL” resilience. On the surface, 2025 appears to be the worst for crypto, but in reality, it is:

The largest scale of supply turnover

The strongest institutional allocation willingness

The clearest policy support

The most comprehensive infrastructure improvement

Price - 5%, but ETF inflow ( billion

This itself is the biggest signal.

Looking forward to the first half of 2026

19/ 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 potential expansion of strategic Bitcoin reserves, and policy continuity after the midterm elections. In the long run, the improvement of ETF infrastructure and regulatory clarity lay the foundation for the next round of increases.

When the market structure undergoes fundamental changes,

The old valuation logic will become ineffective,

The new pricing power will be rebuilt.

Stay rational, stay patient.

Data source:

CoinDesk, CryptoSlate, Glassnode, CoinShares, Farside Investors, Strategy official website, CME Group, Yahoo Finance

Not investment advice, DYOR