Author: Jocy, Founder of IOSG
This is a fundamental shift in market structure, yet most people are still viewing the new era with old-cycle logic.
Recapping the 2025 crypto market, we see a paradigm shift from retail speculation to institutional allocation. Core data shows institutional holdings at 24%, while retail participation dropped by 66% — the 2025 crypto market handover is complete. Forget 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%
Crypto Assets:
- BTC -5.4%
- ETH -12%
- Major altcoins -35% to -60%
Looks bad? Keep reading.
2/ But if you only look at the price, you're missing the most important signal.
Although BTC was down -5.4% for the year, it hit a new all-time high of $126,080 during the period.
More importantly: what happened while the price was falling?
BTC ETF net inflows in 2025: $25 billion
Total AUM: $114-120 billion
Institutional holdings: 24%
Some are panicking, some are buying.
3/ Here's the first key judgment:
Market dominance has shifted from retail to institutions.
The approval of the BTC spot ETF in January 2024 was a watershed moment. The market, previously dominated by retail and OGs, is now led by macro investors, corporate treasuries, and sovereign funds.
This isn't just a change in participants; it's a rewrite of the game rules.
4/ Data supports this judgment:
BlackRock's IBIT reached $50 billion AUM in 228 days, becoming the fastest-growing ETF in history. It now holds 780-800k BTC, surpassing MicroStrategy's 670k BTC. Grayscale, BlackRock, and Fidelity account for 89% of total BTC ETF assets. 86% of institutional investors already hold or plan to allocate to digital assets.
BTC's correlation with the S&P 500 rose from 0.29 in 2024 to 0.5 in 2025.
5/ Look at BlackRock and MicroStrategy's aggressive strategies:
BlackRock's IBIT holds about 60% of the BTC ETF market share, with 800k BTC, surpassing MicroStrategy's 671,268 BTC.
Institutional participation continues to rise:
* 13F filing institutions hold 24% of total AUM (Q3 2025)
* More professional institutional investors account for 26.3%, up 5.2% from Q3
* Major asset managers account for 57% of 13F BTC ETF holdings, professional hedge funds account for 41% of BTC ETF holdings — together nearly 98%. This shows that current institutional holdings are mainly these two types of professional investors, not including more conservative institutions like pension funds and insurance companies (which may still be watching or just starting to allocate).
* FBTC institutional holdings account for 33.9%
Major institutional investors include Abu Dhabi Investment Council (ADIC), Mubadala Sovereign Wealth Fund, CoinShares, Harvard University Endowment (holding $116 million in IBIT), etc. Large traditional brokers and banks have also increased their Bitcoin ETF holdings. Wells Fargo reported holdings of $491 million, Morgan Stanley $724 million, and JPMorgan $346 million. This shows Bitcoin ETF products are being continuously integrated by major financial intermediaries.
The question is: why are institutions continuing to accumulate at "high" prices?
6/ Because they're looking at the cycle, not the price.
After March 2024, long-term holders (LTH) cumulatively sold 1.4 million BTC, worth $121.17 billion.
This is an unprecedented supply release.
But miraculously — the price didn't crash.
Why? Because institutions and corporate treasuries absorbed all this selling pressure.
7/ The three waves of selling by long-term holders:
From March 2024 to November 2025, long-term holders (LTH) cumulatively sold about 1.4 million BTC (worth $121.17 billion).
First wave (late 2023 - early 2024): ETF approval, BTC $25K→$73K
Second wave (late 2024): Trump elected, BTC冲向$100K
Third wave (2025): BTC sustained above $100K
Unlike the single explosive distributions in 2013, 2017, and 2021, this was a multi-wave, sustained distribution. Over the past year, we've seen BTC横盘 around highs for a year — something that has never happened before. BTC unmoved for 2+ years has decreased by 1.6 million since early 2024 (约$140 billion).
But the market's absorption capacity has strengthened.
8/ Meanwhile, what are retail investors doing?
Active addresses continue to decline.
Google searches for "Bitcoin" hit an 11-month low.
$0-$1 small transaction volume down 66.38%.
$10 million+ large transaction volume up 59.26%.
River estimates retail net sold 247,000 BTC in 2025 (约$23 billion).
Retail is selling, institutions are buying.
9/ This leads to the second key judgment:
The current phase is not a "bull market top" but an "institutional accumulation period."
Traditional cycle logic:
Retail frenzy → price surge → crash → restart
New cycle logic:
Stable institutional allocation → narrowing volatility → rising price center → structural上涨
This explains why the price is横盘, but funds keep flowing in.
10/ The policy environment is the third dimension.
The Trump administration has delivered in 2025:
✅ Crypto Executive Order (signed 1.23)
✅ Strategic Bitcoin Reserve (~200k BTC)
✅ GENIUS Act stablecoin regulatory framework
✅ SEC Chair change (Atkins appointed)
Pending:
⏳ Market Structure Act (77% probability of passing before 2027)
⏳ Stablecoins buying short-term U.S. Treasuries, scale to grow 10x in next three years
Potential impact of 2026 midterm elections
The 2026 election will see 435 House seats and 33 Senate seats up for grabs. 274 "pro-crypto" candidates were elected in 2024, but banking lobbying groups plan to spend $100 million+ to counter crypto donation influence. Polls show 64% of crypto investors consider a candidate's crypto stance "very important."
Policy friendliness is unprecedented.
11/ But there's a timing window issue:
The midterm elections are in November 2026.
Historical pattern: "Election year, policy first"
→ Policy密集落地 in the first half
→ Wait for election results in the second half
→ Volatility amplifies
So the investment logic should be:
H1 2026 = Policy honeymoon + institutional allocation = Bullish
H2 2026 = Political uncertainty = Increased volatility
12/ Now back to the initial question:
Why am I still bullish despite crypto's "worst performance" in 2025?
Because the market is completing a "handover":
- From retail hands → to institutional hands
- From speculative chips → to allocation筹码
- From short-term博弈 → to long-term holding
This process必然 accompanies price adjustments and volatility.
13/ How do institutions view target prices?
VanEck: $180,000
Standard Chartered: $175,000-$250,000
Tom Lee: $150,000
Grayscale: New highs in H1 2026
Not blind optimism, but based on:
- Continued ETF inflows
- Public company treasury DAT accumulation (134 companies globally hold 1.686 million BTC)
- Unprecedented U.S. policy window
- Institutional allocation just starting
14/ Of course, risks still exist:
Macro: Fed policy, strong dollar
Regulation: Market Structure Act可能延迟
Market: LTH may continue selling
Politics: Midterm election results uncertain
But the flip side of risk is opportunity.
When everyone is bearish, it's often the best time to position.
15/ Final investment logic:
Short-term (3-6 months): $87K-$95K range震荡, institutions continue accumulating
Mid-term (H1 2026): Policy + institutional drivers, target $120K-$150K
Long-term (H2 2026): Increased volatility, depends on election results and policy continuity
Core judgment:
This is not a cycle top, but the start of a new cycle.
16/ Why am I confident?
Because history tells us:
- 2013 retail-led, peak $1,100
- 2017 ICO frenzy, peak $20,000
- 2021 DeFi+NFT, peak $69,000
- 2025 institutional entry, currently $87,000
Each cycle, participants are more professional, capital is larger, infrastructure is better.
17/ The "worst performance" of 2025 is essentially:
A transition period from the old world (retail speculation) to the new world (institutional allocation).
Price is the cost of transition, but the direction is set.
When BlackRock, Fidelity, and sovereign funds are accumulating on the left,
Retail is still纠结 "will it fall further?"
This is the认知差.
18/ Final summary:
2025 marks the acceleration of crypto market institutionalization. Although BTC's annual return was negative, ETF investors showed strong "HODL" resilience. 2025表面上 crypto's worst, actually is:
- Largest supply handover
- Strongest institutional allocation意愿
- Clearest policy support
- Broadest infrastructure improvement
Price -5%, but ETF inflows $25 billion
This itself is the biggest signal.
Bullish on H1 2026 📈
19/ As long-term practitioners and investors, our job is not to predict short-term prices but to identify structural trends. Key things to watch in 2026 include: Market Structure Act legislative progress, potential expansion of the Strategic Bitcoin Reserve, and policy continuity after the midterm elections. Long-term, the improvement of ETF infrastructure and regulatory clarity lay the foundation for the next rally.
When market structure changes fundamentally,
Old valuation logic fails,
New pricing power is rebuilt.
Stay rational, stay patient ⚡️
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Data sources:
CoinDesk, CryptoSlate, Glassnode, CoinShares, Farside Investors, Strategy official website, CME Group, Yahoo Finance
Not investment advice, DYOR
