Looking back at 2025: What drove the price of BTC through "four seasons"?

Deng Tong, Jinse Finance

As 2025 draws to a close, Jinse Finance presents a series of articles titled "Looking Back at 2025" to mark the New Year. This series reviews the progress of the crypto industry throughout the year and expresses the hope that the industry will overcome its winter and shine brightly in the new year.

In 2025, the crypto market experienced a period of brilliance, reaching record highs before returning to a period of consolidation and bottoming out. This article reviews the performance of the crypto market this year.

BTC price trend chart in 2025

From a policy signal perspective, the January meeting statement removed the previous statement that "inflation has made progress toward the 2% target" and added a focus on the "risk of reflation." Federal Reserve Chairman Powell explicitly stated that a rate cut would only be considered after "real progress in inflation or weakness in the labor market," but emphasized that "the threshold for a rate hike reversal is extremely high," ruling out the possibility of restarting rate hikes. The February meeting minutes further revealed that officials unanimously agreed that the current restrictive monetary policy was to allow time to assess the economy, while also expressing concern that Trump's tariff policies could push up inflation. However, they generally agreed that "rate cuts in 2025 remain the general direction," leading institutions such as Goldman Sachs and Barclays to predict two 25-basis-point rate cuts this year. Additionally, former US President Trump returned to the White House on January 20, becoming the first "crypto president" in US history, resonating with the Fed's easing expectations and becoming a catalyst for the rise in the crypto market.

II. March-April: Tariffs and Slower Fed Easing Lead to BTC Correction

Since Trump's return to the White House, the market has been digesting expectations of his imposition of tariffs.

At the end of February, Trump announced that the planned tariffs on Canada and Mexico would be postponed and take effect as scheduled next month—giving the two countries additional time to resolve border security issues, the tariffs would officially take effect after March 4th.

With the US officially moving forward with the expected policy of imposing tariffs on Canada and Mexico, the market began to reassess the global trade environment. The expectation of the tariffs taking effect on March 4th triggered concerns about global trade frictions, and rising risk aversion led to a withdrawal of funds from risky assets, with short-term funds favoring the US dollar and cash-like assets.

On March 23rd, the Fed's interest rate meeting concluded. The Fed maintained the interest rate unchanged but raised its inflation forecast, signaling a possible slowdown in the pace of easing, breaking the market's previous optimistic expectations of rapid interest rate cuts. Under the combined pressure of multiple negative factors, the cryptocurrency market experienced a short-term sell-off.

III. May-October: Policy Support + Resumption of Interest Rate Cuts Boost BTC to New Double Tops and Highs The US's cryptocurrency regulatory policies and interest rate cuts truly ushered in a "crypto summer" for the cryptocurrency market. Affected by this, the price of BTC surged, reaching an all-time high of $123,561 on August 14th, and then further climbing to an all-time high of $124,774 on October 7th. From July 14th to 18th, the US "Crypto Week" kicked off, with three major cryptocurrency regulatory bills being passed. On June 17th, the US Senate passed the *Directing and Establishing a National Innovation for Stablecoins Act* (the *GENIUS Act*), advancing the US federal government's regulatory efforts on stablecoins and pressuring the House of Representatives to plan the next phase of national digital asset regulation. On July 18th, the bill was signed into law by Trump. The passage of this bill marks the first time the US has formally established a regulatory framework for digital stablecoins. On July 17, the House of Representatives passed the "Anti-CBDC Surveillance Nation Act" by a vote of 219 to 210. On June 23, the House Financial Services Committee and Agriculture Committee submitted the "Clarity Act on Digital Asset Markets," which defines digital goods as digital assets whose value is "intrinsically linked" to the use of blockchain technology. It was passed by the House of Representatives on July 17. On September 18, the Federal Reserve announced a 25 basis point interest rate cut, lowering the federal funds rate to 4%-4.25%, and expectations of further liquidity easing returned. Simultaneously, central banks in several countries began to include small amounts of Bitcoin in their foreign exchange reserves for diversification; the Dutch central bank disclosed holding $1.5 billion worth of Bitcoin assets, boosting market confidence. On October 1, the US federal government faced a 43-day shutdown due to insufficient funds, and investor concerns about economic uncertainty fueled demand for safe-haven assets. BTC became a favorite among large institutional and retail investors, thus surging to a new all-time high on October 7th. Although its momentum weakened afterward, the price of BTC remained above $110,000 for most of October. Additionally, the Circle IPO on June 5th, the Hong Kong Stablecoin Ordinance bill that came into effect on August 1st, the Trump family's WLFI transaction on September 1st, and announcements of cryptocurrency reserves by various companies also served as catalysts for the price increase from time to time. While the price was rising steadily, a crisis was also brewing. After reaching its all-time high of over $120,000 in October, BTC began a slow decline, sparking widespread discussion in the last two months of the year about whether it had entered a bear market. IV. November-December: Concerns about the future economy weakened BTC's upward momentum. On November 1st, the price of BTC was $109,574, after which it began a downward trend. On November 23, BTC hit a low of $84,682, a 22.71% drop from the beginning of the month. Although it fluctuated above $90,000 for most of the time afterward, the upward trend lacked strength, sparking various speculations within the industry. The US government shutdown led to a lack of key economic data, causing market concerns about economic fundamentals and future interest rate trends, thus negatively impacting the performance of risk assets. Furthermore, despite prior expectations of further interest rate cuts by the Federal Reserve, the Fed issued cautious signals before the actual cuts, leading to divergent market expectations regarding future liquidity. On December 10, the Fed implemented its third interest rate cut of the year, but the market interpreted it as a "recession-style rate cut" to address a weakening economy, exacerbating pessimistic expectations. Investors are reassessing macroeconomic variables such as the global interest rate path and fiscal health, favoring more conservative asset allocations amidst uncertainty. As the crypto market remains sluggish, many DAT companies are struggling to survive. Increased liquidations due to drastic market changes will further push the market down. Currently, the market is anticipating a "Christmas rally," which may be the "hope for the whole village" this year. Summary The year 2025 began with an almost "certain" optimism, with Trump's rise to power filling the industry with anticipation. After experiencing tariffs and a slowdown in the Fed's easing pace, the market rebounded after a period of dormancy: favorable policies, the resumption of interest rate cuts, IPOs of crypto companies like Circle, hype surrounding Trump family projects, and a surge in DAT companies all contributed to BTC breaking through the $120,000 mark twice. However, influenced by macroeconomic expectations, BTC is likely to experience a period of consolidation and bottoming out at the end of the year. Looking at the overall crypto market trend throughout the year, the correlation between BTC and traditional financial markets has significantly increased. The improvement of the regulatory framework and the Fed's policy pace will likely continue to be key variables influencing BTC's price trend in 2026.