Author: Jocy, Founder of IOSG

This is a fundamental shift in market structure, while most people are still viewing the new era through the lens of old cycle logic.

In the 2025 crypto market review, we see a paradigm shift from retail speculation to institutional allocation, with core data showing institutional holdings at 24% and retail investors exiting at 66% — the turnover in the 2025 crypto market is complete. Forget about 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, let's 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 grim? Keep reading.

2/ But if you only look at prices, you will miss the most important signal.

BTC, despite being down -5.4% for the year, reached a historical high of $126,080 during that time.

More importantly: what happened while the price was falling?

BTC ETF net inflow in 2025: $25 billion

Total AUM: $114-120 billion

Institutional holding ratio: 24%

Some are panicking, while others are buying.

3/ Here is the first key judgment:

Market dominance has shifted from retail to institutional investors.

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 is not just a change in participants; it is a rewriting of the rules of the game.

4/ Data supports this judgment:

BlackRock's IBIT reached $50 billion AUM in just 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 together account for 89% of total BTC ETF assets. 13F investment funds plan

86% of institutional investors currently hold or plan to allocate digital assets.

The correlation between BTC and the S&P 500 rose from 0.29 in 2024 to 0.5 in 2025.

5/ Now let's look at the aggressive strategies of BlackRock and MicroStrategy:

BlackRock's IBIT holds about 60% market share of BTC ETFs, with a holding of 800,000 BTC, surpassing MicroStrategy's 671,268 BTC.

Institutional participation continues to rise:

• 13F reported institutional holdings account for 24% of total ETF AUM (Q3 2025)
• The proportion of more professional institutional investors has reached 26.3%, an increase of 5.2% from Q3
• Major asset management companies account for 57% of 13F BTC ETF holdings, while professional hedge fund institutions account for 41% of BTC ETFs, together nearing 98%: indicating that current institutional holdings are mainly from these two types of professional investors, not including more conservative institutions like pensions and insurance companies (which may still be observing or just starting to allocate)
• FBTC institutional holding ratio reaches 33.9%

Major institutional investors include Abu Dhabi Investment Council (ADIC), Mubadala Sovereign Wealth Fund, CoinShares Harvard University Endowment Fund (holding $116 million in IBIT), etc. Large traditional brokers and banks have also increased their holdings in Bitcoin ETFs. Wells Fargo reports holdings of $491 million, Morgan Stanley reports $724 million, and JPMorgan reports $346 million. This shows that Bitcoin ETF products are being continuously integrated by major financial intermediaries.

The question arises: why are institutions continuing to build positions at "high levels"?

6/ Because they are not looking at prices, but at cycles.

After March 2024, long-term holders (LTH) sold a total of 1.4 million BTC, worth $121.17 billion.

This is an unprecedented release of supply.

But the amazing thing is — the price did not crash.

Why? Because institutions and corporate treasuries absorbed all this selling pressure.

7/ Three waves of selling by long-term holders:

Three waves of selling by OG investors

From March 2024 to November 2025, long-term holders (LTH) sold a total of about 1.4 million BTC (worth $121.17 billion).

First wave (end of 2023 - early 2024): ETF approval, BTC $25K→$73K

Second wave (end of 2024): Trump elected, BTC surges to $100K

Third wave (2025): BTC remains above $100K

Unlike the single explosive distribution in 2013, 2017, and 2021, this time it is a multi-wave continuous distribution. We have been in a sideways market at BTC's peak for a year, a situation that has never occurred before. BTC that has not moved for over 2 years decreased by 1.6 million since early 2024 (about $140 billion).

But the market's digestion capacity has strengthened.

8/ Meanwhile, what are retail investors doing?

Active addresses continue to decline.

Google searches for "Bitcoin" have dropped to an 11-month low.

The volume of small transactions ($0-$1) has decreased by 66.38%.

Large transactions over $10 million have increased by 59.26%.

River estimates that retail investors net sold 247,000 BTC in 2025 (about $23 billion).

Retail investors are selling, while institutions are buying.

9/ This leads to the second key judgment:

This is not the "top of a bull market," but rather an "institutional accumulation period."

Traditional cycle logic: retail frenzy → price skyrockets → crash → restart

New cycle logic: institutions stabilize allocation → volatility narrows → price center rises → structural increase

This explains why prices are stagnant, but capital inflows continue.

10/ The policy environment is the third dimension.

The Trump administration has implemented the following in 2025:

• Crypto executive order (signed 1.23)
• Strategic Bitcoin reserves (~200,000 BTC)
• GENIUS Act stablecoin regulatory framework
• SEC chair change (Atkins takes office)

Pending:

• Market structure bill (77% probability of passing before 2027)
• Stablecoins buying short-term U.S. Treasury bonds, with a projected tenfold growth in scale over the next three years.

Potential impact of the 2026 midterm elections.

In 2026, 435 House seats and 33 Senate seats will be up for re-election. In 2024, 274 "crypto-friendly" candidates were elected, but banking lobby groups plan to invest $100 million+ to counter the impact of crypto donations. Polls show that 64% of crypto investors believe a candidate's stance on crypto is "very important."

Policy friendliness is unprecedented.

11/ But there is a timing window issue:

The midterm elections are in November 2026.

Historical pattern: "Election year policies precede"

→ Policies intensively implemented in the first half of the year

→ Waiting for election results in the second half of the year

→ Volatility amplifies

So the investment logic should be:

First half of 2026 = Policy honeymoon period + institutional allocation = optimistic

Second half of 2026 = Political uncertainty = increased volatility

12/ Now back to the initial question:

Why is 2025 the "worst performance" in crypto, yet I remain optimistic?

Because the market is completing a "hand-off":

• From retail hands → to institutional hands
• From speculative chips → to allocation chips
• From short-term speculation → to long-term holding

This process will inevitably be accompanied by price adjustments and volatility.

13/ How to view institutional target prices?

VanEck: $180,000

Standard Chartered: $175,000-$250,000

Tom Lee: $150,000

Grayscale: New highs in the first half of 2026.

This is not blind optimism, but based on:

• Continuous inflow into ETFs
• Public company treasury DAT increasing holdings (134 companies globally hold 1.686 million BTC)
• An unprecedented policy window for the U.S.
• Institutional allocation has just begun.

14/ Of course, risks still exist:

Macro: Federal Reserve policy, strong dollar.

Regulatory: Market structure bill may be delayed.

Market: LTH may continue to sell.

Political: Uncertainty in midterm election results.

But the other side of risk is opportunity.

When everyone is bearish, it is often the best time to position.

15/ Final investment logic:

Short-term (3-6 months): $87K-$95K range volatility, institutions continue to accumulate.

Mid-term (first half of 2026): Policy + institutional dual drive, target $120K-$150K.

Long-term (second half of 2026): Increased volatility, watch election results and policy continuity.

Core judgment: this is not the top of the cycle, but the starting point of a new cycle.

16/ Why do I have this confidence?

Because history tells us:

• In 2013, retail dominated, peak at $1,100.
• In 2017, ICO frenzy, peak at $20,000.
• In 2021, DeFi + NFT, peak at $69,000.
• In 2025, institutions enter, currently at $87,000.

With each cycle, participants become more professional, the amount of capital increases, and the infrastructure improves.

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 has been determined.

When BlackRock, Fidelity, and sovereign funds are building positions on the left side,

Retail investors are still struggling with "will it drop further?"

This is the cognitive gap.

18/ In conclusion:

2025 marks the acceleration of the institutionalization process in the crypto market. Although BTC's annual return is negative, ETF investors show strong "HODL" resilience. On the surface, 2025 appears to be the worst for crypto, but in reality, it is:

• The largest scale of supply hand-off
• The strongest institutional allocation willingness
• The clearest policy support
• The most comprehensive infrastructure improvement

Price -5%, but ETF inflow of $25 billion.

This itself is the biggest signal.

Looking forward to the first half of 2026.

19/ As long-term practitioners and investors, our job is not to predict short-term prices, but to identify structural trends. Key points to watch in 2026 include: progress on market structure bill legislation, the possibility of expanding strategic Bitcoin reserves, and policy continuity after the midterm elections. In the long term, the improvement of ETF infrastructure and regulatory clarity lays the foundation for the next round of increases.

When the market structure undergoes fundamental changes,

Old valuation logic will fail,

New pricing power will be rebuilt.

Stay rational, stay patient.

Data sources:

CoinDesk, CryptoSlate, Glassnode, CoinShares, Farside Investors, Strategy official website, CME Group, Yahoo Finance

Not investment advice, DYOR.

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