Gold – often dismissed as outdated by Bitcoin believers – easily outperforms the token, which crypto believers call digital gold. That includes long-term bonds and the Nasdaq, in a year marked by falling interest rates and declining risk appetite.The underperformance is even more pronounced compared to the benchmarks that Bitcoin should have surpassed. The MSCI Emerging Markets Index has risen sharply this year, and even the US Utilities Index – a byword for low volatility and low growth stability – has outpaced Bitcoin’s decline.On Tuesday, Bitcoin briefly fell below $90,000 – roughly the average entry price of all ETF inflows since their launch – meaning the typical ETF investor was now underwater. The largest cryptocurrency climbed from a seven-month low to trade about 1.5% higher at $93,241 as of 11:46 a.m. in New York.
For many, this would be crypto’s breakthrough year. A pro-crypto White House, new rules allowing the launch of exchange-traded funds in various tokens, and a wave of institutional inflows had seemingly given digital assets a place in the mainstream financial world. Instead, for investors who bought near the highs, Bitcoin’s 2025 story feels familiar: a burst of euphoria, a crash, and growing disbelief. Once presented as everything from an inflation hedge to a growth engine and an uncorrelated store of value, the token has fallen short on every count lately. Volatile? Always. Trustworthy? Less and less. That is important for professional investors. In diversified portfolios, Bitcoin has failed to offset losses from rate-driven selloffs or amplify gains during recoveries. Nor did it act independently when other markets became volatile. For fund managers who see crypto as a strategic addition, the disappointment goes beyond performance: it hits the mark.Theories about what went wrong vary. Some blame October’s violent crash, which wiped out about $19 billion in leveraged positions and left deep psychological scars on the market. “October 10 is definitely a longer-lasting shock to the market than it might seem at first glance,” said George Mandres, senior trader at XBTO Trading. “As much as market participants may try to forget or brush this off, it will remain deeply entrenched in market makers’ appetite to provide liquidity and in market participants’ beliefs and appetite for risk.”
Others point to broader market weakness. “Asia showed softer growth overnight, Chinese shares weakened and global tech valuations retreated as investors reassessed prices ahead of Nvidia’s Nov. 19 earnings,” said Timothy Misir, head of research at BRN, a digital asset analytics firm. “With liquidity conditions already tight, correlations returned to their high-beta defaults. Crypto traded not as a hedge, but as the most common expression of macro tightening.”
“The talk of a coming bear market is starting to get louder,” said Augustine Fan, director of SignalPlus.
To be sure, Bitcoin is still trading well above its pre-Donald Trump re-election levels, and its history is filled with sharp declines followed by spectacular recoveries. In the longer term, returns remain impressive. But for now, traders are positioned defensively. Demand for downside protection around the $85,000 and $80,000 levels has surged, and options data suggests there is less than a 5% chance that Bitcoin will regain its all-time high above $126,000 by the end of the year, according to data from Coinbase-owned Deribit.
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