Bitcoin Wipes Out 2025 Gains as Price Falls Under US$90,000

Bitcoin has entered a bear market, falling more than 28% from its recent record high and wiping out all gains for the year. The cryptocurrency dropped below US$90,000 (MX$1.65 million) on Monday for the first time in seven months, extending a slide that has erased over US$600 billion in market value, according to CoinMarketCap data.

A bear market, defined as a decline of more than 20% from a recent peak, reflects a broader shift in investor sentiment as traders pull back from riskier assets such as crypto and AI stocks. This risk-off environment is being fueled by macroeconomic uncertainty, including questions over whether the Federal Reserve will cut interest rates next month.

Macro and Market-Specific Pressures

Bitcoin’s decline stems from a combination of factors. Long-term holders are reportedly taking profits after “meteoric gains” in recent years. Gerry O’Shea, head of global market insights, Hashdex Asset Management, said the cryptocurrency has struggled under selling pressure from these investors, compounded by uncertainty surrounding Fed policy and broader macro conditions.

The market has also failed to stabilize following the Oct. 10 flash crash triggered when President Donald Trump “reignited his trade war with China,” causing significant liquidations and pushing some traders to exit positions.

Peter Chung, head, Presto Research, noted that October’s liquidations left Bitcoin with thinner order books, making prices more vulnerable to “intense fluctuations.” He said Bitcoin’s downside is "amplified due to a crypto-specific factor" tied to reduced liquidity among market makers.

Before the recent downturn, Bitcoin had been on a strong upswing—surging roughly 83% from around US$69,000 after Trump’s re-election in November to a record above US$126,000 in early October. The rally was fueled by optimism over potentially favorable crypto regulation under the new administration, including the July signing of the GENIUS Act.

Outlook and Investor Sentiment
While Bitcoin has erased its yearly gains, other assets have fared better: the S&P 500 is up 13.4% year-to-date, and gold has climbed 53%. Although tech stocks such as Nvidia (NVDA) have also come under pressure, investors have been “buying the dip”—a trend not yet mirrored in crypto.

Some analysts say the market has reached an inflection point, where positive catalysts are already priced in and uncertainty is increasing. Haider Rafique, global managing partner, OKX, said price movements in the coming days will determine whether the downturn deepens into a “reset” or proves to be a “short-term dip.”

Despite the volatility, others remain bullish. Ryan Rasmussen, head of research, Bitwise Asset Management, said the current sideways trading environment offers “the perfect opportunity for investors to build on existing bitcoin positions.”