Author: Jocy, IOSG Co-Founder
This is a fundamental shift in market structure, yet most people are still viewing the new era through the lens of the old cycle.
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 has retreated by 66% — the 2025 crypto market turnover 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.
Surface Data: 2025 Asset Performance
First, 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? Read on.
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 that period. More crucially: what happened while the price was falling? BTC ETFs saw a net inflow of $25 billion in 2025, with total AUM reaching $114-120 billion, and institutional holdings accounting for 24%. Some panicked, while some bought.
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, once 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 rules of the game.
Data supports this judgment: BlackRock's IBIT reached $50 billion AUM in 228 days, becoming the fastest-growing ETF in history. It now holds 780,000–800,000 BTC, surpassing MicroStrategy's 670,000 BTC. Grayscale, BlackRock, and Fidelity collectively account for 89% of total BTC ETF assets. 13F filings show that 86% of institutional investors already hold or plan to allocate to digital assets. The correlation between BTC and the S&P 500 rose from 0.29 in 2024 to 0.5 in 2025.
Look at the aggressive strategies of BlackRock and MicroStrategy. BlackRock's IBIT holds about 60% of the BTC ETF market share, with holdings of 800,000 BTC, already surpassing MicroStrategy's 671,268 BTC. Institutional participation continues to rise: 13F filers' holdings account for 24% of total ETF AUM (Q3 2025); the proportion of professional institutional investors reached 26.3%, up 5.2% from Q3; large asset managers account for 57% of 13F BTC ETF holdings, and professional hedge funds account for 41% of BTC ETF holdings — together nearly 98% — indicating that current institutional holdings are primarily from these two types of professional investors, not yet counting more conservative institutions like pension funds and insurance companies (they may still be观望 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), and others. Large traditional brokerages and banks have also increased their holdings of Bitcoin ETFs. 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 build positions at "high" prices?
Because They Look at Cycles, Not Price
After March 2024, Long-Term Holders (LTH) cumulatively sold 1.4 million BTC, worth $121.17 billion. This was an unprecedented supply release. But miraculously — the price didn't crash. Why? Because institutions and corporate treasuries absorbed all this selling pressure.
Three waves of selling by long-term holders: From March 2024 to November 2025, Long-Term Holders (LTH) cumulatively sold approximately 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 surged towards $100K; Third wave (2025): BTC remained above $100K for an extended period.
Unlike the single explosive distributions of 2013, 2017, and 2021, this was a multi-wave, sustained distribution. We have experienced a year of sideways movement at BTC's highs, something that has never happened before. BTC unmoved for 2+ years has decreased by 1.6 million coins (approx. $140 billion) since early 2024, but the market's absorption capacity has strengthened.
Meanwhile, what are retail investors doing? Active addresses continue to decline, Google searches for "Bitcoin" hit an 11-month low, small transactions ($0-$1) decreased by 66.38%, while large transactions ($10M+) grew by 59.26%. River estimates retail net sold 247,000 BTC (approx. $23 billion) in 2025. Retail is selling, institutions are buying.
This Leads to the Second Key Judgment: The Current Phase is Not a "Bull Market Top," but an "Institutional Accumulation Phase"
Old cycle logic: retail frenzy → price surge → crash → restart. New cycle logic: stable institutional allocation → narrowing volatility → rising price floor → structural appreciation. This explains why the price is sideways, but capital inflows continue.
The policy environment is the third dimension. The Trump administration in 2025 has already delivered: Crypto Executive Order (signed 1.23), Strategic Bitcoin Reserve (~200,000 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 (size expected to grow 10x in the next three years).
Potential impact of the 2026 midterm elections: 435 House seats and 33 Senate seats up for election in 2026. 274 "pro-crypto" candidates were elected in 2024, but banking lobby groups plan to spend $100M+ to counter crypto donation influence. Polls show 64% of crypto investors believe a candidate's crypto stance is "very important." Policy friendliness is unprecedented.
But there's a timing window here: the midterm elections are in November 2026. Historical pattern: "Election year policy push" →密集 policy rollouts in the first half →等待 election results in the second half → increased volatility. So the investment logic should be: H1 2026 = policy honeymoon + institutional allocation = bullish; H2 2026 = political uncertainty = increased volatility.
Why am I Still Bullish Despite 2025 Being Crypto's "Worst Performance" Year?
Now back to the opening question: Why am I still bullish despite 2025 being crypto's "worst performance" year? Because the market is completing a "handover": from retail hands → to institutional hands, from speculative chips → to allocation assets, from short-term博弈 → to long-term holding. This process inevitably involves price adjustment and volatility.
How to view institutional target prices?
VanEck: $180,000; Standard Chartered: $175,000-$250,000;
Tom Lee: $150,000; Grayscale: New ATH in H1 2026.
Not blind optimism, but based on: Continued ETF inflows, Public company treasury DCA accumulation (134 companies globally hold 1.686 million BTC), Unprecedented U.S. policy window, Institutional allocation has just begun.
Of course, risks remain: Macro - Fed policy, strong dollar; Regulatory - Market Structure Act可能 delay; Market - LTH may continue selling; Political - Midterm election results uncertain. But the flip side of risk is opportunity. When everyone is bearish, it's often the best time to position.
Final investment logic: Short-term (3-6 months): $87K-$95K range-bound, institutions continue accumulating; Medium-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
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 more robust.
The "worst performance" of 2025 is essentially: the 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 (cognitive gap).
Summary
Final summary: 2025 marks the acceleration of the crypto market's institutionalization. Despite BTC's negative annual return, ETF investors showed strong "HODL" resilience. Superficially the worst for crypto in 2025, it was actually: The largest supply handover, The strongest institutional allocation意愿, The clearest policy support, The broadest infrastructure improvement. Price -5%, but ETF inflows of $25 billion. This itself is the biggest signal.
As long-term practitioners and investors, our job is not to predict short-term prices, but to identify structural trends. Key看点 for 2026 include: Market Structure Act progress, Potential expansion of the Strategic Bitcoin Reserve, and Policy continuity post-midterm elections. Long-term, the完善 of ETF infrastructure and regulatory clarity lay the foundation for the next leg up.
When the market structure fundamentally changes, old valuation logic fails, and new pricing power is rebuilt. Stay rational, stay patient.
