Bitcoin Set for First Yearly Loss Since 2022 as Macro Pressures Weigh on Crypto
Despite hitting record highs earlier this year, bitcoin has struggled to regain momentum since October.
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Bitcoin is heading for its first annual decline since 2022. Despite hitting a fresh record high earlier this year, it has struggled to regain momentum since October and is now on course to end the year more than 6% lower, after posting gains in each of the previous two years. Bitcoin was last trading around $87,474.
The downturn comes after a volatile year in which bitcoin initially surged on optimism following the election of Donald Trump, who campaigned as a crypto-friendly candidate. That rally pushed prices above $126,000 in early October. However, the momentum proved short-lived. Just days later, markets sold off sharply after Trump announced new tariffs on Chinese imports and threatened export controls on critical software, triggering more than $19 billion in liquidations across leveraged crypto positions—the largest such event in the sector’s history.
Broader market instability compounded the pressure. Global stock benchmarks swung between record highs and sharp pullbacks amid concerns over tariffs, interest rates, and the sustainability of lofty valuations in AI-related stocks. “In 2025, the market showed that bitcoin increasingly exhibits the characteristics of a risk asset within the global financial system,” Linh Tran, senior market analyst at XS.com, told Reuters.
That linkage marks a shift from bitcoin’s earlier reputation as an alternative or hedge asset. Analysts say deeper participation by retail and institutional investors has tethered crypto more closely to the same macro forces that drive stocks, including monetary policy expectations and risk appetite.
Regulatory developments in the U.S. have been mixed. The crypto industry scored early wins under the Trump administration, including the dismissal of several Biden-era lawsuits against major exchanges and the passage of a federal framework for dollar-pegged stablecoins. But broader market-structure legislation—long seen as essential for long-term stability—has yet to materialise, tempering industry optimism.
Outside the U.S., the Middle East continues to position itself as a crypto hub. In December, DIFC Courts formally classified cryptocurrency as intangible personal property, reinforcing legal clarity. The UAE has since emerged as the leading MENA market for crypto adoption and ranks among the top five globally, according to industry reports.
Momentum is also building through partnerships. During Binance Blockchain Week in Dubai, Binance signed an MoU with botim money to explore expanding digital asset access for UAE users, highlighting the region’s ambition to bridge digital finance flows between Asia, Europe, and Africa—even as global crypto markets grapple with a tougher macro reality.
