MW Crypto investors got almost everything they wanted in 2025, yet prices still fell. They're looking for more help from the White House in 2026.
By Frances Yue
Crypto bulls are hoping that more positive developments on the policy side can reignite price momentum next year
Some small cryptocurrencies are down 90% from their record highs.
Crypto investors got almost everything they wanted in 2025: A "crypto president" in the White House, talk of a federal bitcoin reserve, friendlier regulations, a wave of exchange-traded funds investing in smaller cryptocurrencies, and a handful of high-profile digital-asset companies making their public-market debuts.
Yet all of this good news wasn't enough to lift prices. Digital-asset prices had a terrible year in 2025. Bitcoin (BTCUSD) has lost over 6% year to date, significantly underperforming gold (GC00) and the S&P 500 SPX, which have risen by more than 70% and 17% this year, respectively, FactSet data showed. Smaller cryptocurrencies experienced even bigger losses, with prices for some popular tokens down 90% from their all-time highs.
The disconnect between industry developments and market performance has left some investors puzzled. "If you are a short-term investor, seeing almost everything you had hoped for in crypto happen this year while prices are still down would likely be disappointing," said Matt Hougan, chief investment officer at crypto investment manager Bitwise Asset Management.
Still, Hougan said more crypto-friendly developments on the policy side and a supportive macroeconomic environment could set the stage for a rebound in 2026. In particular, investors will be looking to the White House - and President Donald Trump - to help push prices higher in the new year.
Why prices fell
Crypto investors learned a couple of hard lessons this year. Perhaps the biggest was the power that psychologically important price thresholds can have, several market experts said.
In late 2024, bitcoin crossed above $100,000 for the first time as Trump won re-election to the White House promising a friendlier regulatory regime that would be a sharp contrast to the aggressive enforcement actions taken under President Joe Biden.
"We got it in a hurry after Trump won the election," Hougan said.
Bitcoin ultimately hit a high above $125,000 in October of this year. But the psychological pull of bitcoin prices in six-digit territory was apparently too much for many longtime holders to resist, Hougan said.
Even as spot bitcoin ETFs continued to see strong inflows this year, signaling interest from investors who appeared more comfortable with traditional financial products, longtime bitcoin "whales" - which most blockchain analytics firms define as holders of 1,000 coins or more - seized the opportunity to cash out.
Bitcoin ETFs recorded a combined $35.5 billion of net inflows in 2024, following the launch of the first batch of such ETFs on Jan. 11 of that year. Although the pace of inflows slowed a bit this year, they were still pretty substantial, taking in another $22.1 billion so far in 2025 through Monday, Dow Jones Market Data showed.
Analysts at crypto research firm Reflexity Research said in a recent report that structural progress on the policy front can improve digital assets' long-term outlook, but it doesn't necessarily have an impact on short-term price dynamics.
Read: Crypto 'whales' are selling bitcoin as it sinks further below $100,000. Should investors be worried?
Another development that weighed on prices this year: On Oct. 10, crypto investors endured the biggest liquidation event in the history of the market, which wiped out at least $20 billion in leveraged positions. It has had a lasting impact on the market, according to Jim Ferraioli, director of crypto research and strategy at the Schwab Center for Financial Research.
Also read: So much for 'Uptober.' Crypto markets will be recovering from this month's historic $20 billion wipeout for a long time.
Potential catalysts in 2026
The weak price action in crypto this year could set investors up for a stronger 2026, some said.
After underperforming most major risk assets in 2025, bitcoin could be entering next year on firmer footing than stocks, partly because it has more room to rally following a weak year, said Bitwise's Hougan. That comes as investors expect a supportive economic backdrop in 2026, including two additional 25-basis-point interest-rate cuts from the Federal Reserve, according to data from CME Group.
But beyond the favorable macro conditions, investors are closely watching policy developments that could help boost crypto prices.
One key focus is the so-called Clarity Act, a legislative proposal aimed at establishing clear federal rules for how crypto is regulated and which agencies oversee different parts of the industry. Supporters said clearer jurisdictional lines between regulators would reduce legal uncertainty, encourage greater institutional participation and attract more capital into the market.
While crypto bulls had hoped the bill would make it to the president's desk in 2025, it stalled out despite passing the U.S. House of Representatives in July with bipartisan support. The legislation remains pending in the Senate, but some investors are hoping to see it pass in 2026, said Liz Davis, a former attorney in the Commodity Futures Trading Commission's enforcement division and now a partner at law firm Davis Wright Tremaine.
The delay, she added, has had less to do with opposition to the bill itself and more to do with the longest U.S. government shutdown in history, which started Oct. 1 and lasted 43 days.
If approved, the Clarity Act could emerge as the biggest catalyst for crypto in 2026, said Ferraioli at the Schwab Center for Financial Research.
Meanwhile, some of the most ambitious policy hopes that once energized crypto markets have begun to fade. Trump's campaign promise to create a federal bitcoin reserve was initially viewed by many investors as the ultimate policy win for the industry. But enthusiasm has cooled after a report prepared by the White House's crypto working group earlier this year offered no new details on the plan.
-Frances Yue
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(END) Dow Jones Newswires
December 24, 2025 11:30 ET (16:30 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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