Why Bitcoin Missed Most Forecasts in 2025
Bitcoin peaked above $126,200 on October 6, 2025, but four days later experienced a flash crash that revealed trading vulnerabilities and fragility in the market.
Following this peak, bitcoin's price declined about 30%, subsequently trading mostly between $83,000 and $96,000 through late 2025. This performance was well below many analysts' forecasts for the year.
The October crash was characterized as a liquidity event triggered by macroeconomic stress and crowded positioning, which caused a re-pricing of bitcoin from a revolutionary asset to more of a risk asset.
Bitcoin's entry into the institutional macro complex shifted its trading dynamics to be more influenced by liquidity, positioning, and policy, rather than purely ideological factors.
U.S. spot bitcoin ETFs saw significant activity during 2025, with approximately $9.2 billion in net inflows from January to October, followed by net outflows exceeding $1.3 billion from October to December, including $650 million in just four days.
The overall macroeconomic environment, including unfulfilled expectations for Federal Reserve easing and continued liquidity withdrawal, contributed to the fragile price dynamics and heightened sensitivity to risk sentiment.
Despite the volatility experienced throughout 2025, experts remain optimistic about bitcoin's longer-term prospects due to institutional adoption, clearer regulatory frameworks, concerns over fiat currency debasement, and real-world use cases. Some forecasts even suggest the possibility of new all-time highs in 2026 beyond the traditional halving cycle.
