(Illustrative image: Unsplash)
The end of 2025 saw the cryptocurrency market experience a severe downturn, wiping out over $1 trillion in market capitalization in just a few months. After reaching a record peak of over $4.3 trillion in early autumn, by the end of December 2025, the total market value of cryptocurrencies had fallen to approximately $3.3 trillion.
Bitcoin – the largest cryptocurrency – has plummeted nearly 30%, from its peak of over $126,000 (October 6, 2025) to around $85,000 in early December, making 2025 the first year of Bitcoin's price drop since 2022. Many other major cryptocurrencies, such as Ether, have also experienced similar sharp declines. Even cryptocurrencies associated with President Trump's family, such as American Bitcoin Corp (ABTC) – Eric Trump's Bitcoin mining company – lost nearly 40% of its value, equivalent to approximately $1 billion, in just the first few days of December. This overall picture has shaken investors: "Bitcoin and related companies have maintained their downward trend over the past two months, mirroring the sell-off in the overvalued technology market," as an AP reporter observed. The records set at the beginning of the year were quickly overshadowed, and expectations of reaching $150,000-$200,000 from experts like Standard Chartered or Bitcoin holding funds (typically MicroStrategy) had to be lowered due to a sharp market correction.
Trends and causes of the downturn
Analysts attribute the year-end price drop to a combination of global macroeconomic and domestic market factors. In terms of macroeconomics , US trade and financial policies played a prominent role. Specifically, the announcement of a 100% tariff on Chinese imports on October 12, 2025, resulted in over $19 billion in liquidated positions within 24 hours – the largest liquidation event in cryptocurrency history. Simultaneously, concerns about the Fed's interest rate policy and even signs of technology stock prices peaking had a ripple effect on the cryptocurrency market.
The influence of the artificial intelligence (AI) market is also a significant factor. Amidst the investment frenzy in "AI stocks" (typically NVIDIA, Oracle, etc.), many investors have shifted capital away from cryptocurrencies to traditional technology sectors. A Reuters report on December 11, 2025, noted that "cryptocurrencies plummeted as investors worried about AI returns not meeting expectations" after Oracle Corporation (USA) lowered its profit forecast due to high costs for AI infrastructure. The fear of an "AI bubble" caused Bitcoin to lose more than 2.5% in a single trading session and Ether to fall 4.3%, while analysts commented that the "AI bubble" cycle could spread to the cryptocurrency market.
(Illustrative image: Unsplash)
Furthermore, investment sentiment has shifted profoundly: cryptocurrencies are now seen as a risky asset that tracks the movements of mainstream financial markets. According to expert Jasper De Maere (Wintermute fund), quoted on CNA, “2025 will see an increasingly strong correlation between bitcoin and stocks, as many traditional investors are now also participating in cryptocurrencies.” The involvement of institutional investors in crypto – such as Bitcoin ETFs and Bitcoin treasury holding companies (Michael Saylor’s Strategy) – is putting selling pressure on the cryptocurrency market, spreading from stocks. Previously, the sharp increase in Bitcoin options contract debt indicates that many investors are hedging against the risk of further bitcoin price declines. In addition, tightening liquidity – investment funds withdrawing over $3.6 billion from Bitcoin ETFs (such as Grayscale) in November 2025 – is also contributing to the pessimistic sentiment.
Analysts suggest that Bitcoin is currently more or less "affected by the general sentiment of the equity market." Bitcoin's "price drop" is occurring even as safe-haven assets like gold are being sought after (gold prices have risen nearly 7% in the past month). Many experts believe that the initial drivers of the cryptocurrency rally in 2025 – such as the White House's pro-crypto policies or strong investment flows into the sector – have given way to broader cyclical factors and macroeconomic policies. Contrary to Trump's pre-election expectations, obstacles such as tariffs and monetary policy have overshadowed political positivity.
Assessing the risk of a “second winter”
Given the unpredictable developments, many experts are warning of the risk of a second "cryptowin" (cryptocurrency winter). The first winter (from late 2021 to 2023) occurred when scandals such as the Terra/Luna fund collapse and the FTX (Sam Bankman-Fried) incident exposed systemic risks, causing Bitcoin to lose approximately 70% of its value. Currently, although there is no event of a similar scale, the rate of decline in the early part of the year is concerning. However, many analysts remain optimistic, considering this development to be within Bitcoin's normal cycle. Brent Donnelly (Spectra Markets) emphasized that 75-80% drops have occurred many times in Bitcoin's history, and stated that he does not "think we are in a crypto winter" compared to past deep corrections. In early December 2025, Bitcoin briefly touched the average purchase price of holding funds (around $80,000) but quickly rebounded above $90,000. Many experts on the four-year Bitcoin cycle also noted that the current volatility “does not necessarily indicate a long-term shift in sentiment” but rather represents a pause in a long-term bullish pattern (in which Bitcoin typically consolidates after each rapid surge).
The American Bitcoin (ABTC) logo is displayed on a phone screen, with the Bitcoin symbol in the background, in Brussels, Belgium, on December 29, 2025. (Photo AFP).jp
Nevertheless, it's hard to deny the growing pessimism. Large investment funds are warning of the possibility of further Bitcoin corrections. The CEO of MicroStrategy also admitted being prepared for further significant price drops without selling off the company's assets. However, compared to the 2021-2023 period, there are now significant differences: the market is more transparent, risk management is tighter, and there is greater participation from large institutional investors. Policies regarding cryptocurrencies in the US (such as the Treasury Department allowing the establishment of Bitcoin ETFs and removing some legal barriers) also somewhat reinforce the belief that the crypto industry has become more "legitimized." This is reflected in statements from industry leaders: Brian Armstrong, CEO of Coinbase, recently stated that he doesn't believe the price of Bitcoin can fall to zero, and believes that 2025 should be a transitional year from a "gray market to a formal structure." Larry Fink, CEO of BlackRock, also stated that many "genuine long-term investors," including sovereign wealth funds, are considering Bitcoin as part of their portfolios. This perspective has led some experts to believe that if favorable trends (new ETFs, practical blockchain applications) continue, the market could gradually recover instead of continuing its downward spiral.
With a larger user base, increased involvement of financial institutions, and clearer regulations, this cryptocurrency crisis is likely just a cyclical correction. Therefore, closely monitoring policy developments and market sentiment, as well as making sound portfolio allocations, is essential to prepare for the possibility of the market entering a second “cryptowinter.”
Source: https://vtv.vn/mua-dong-cua-tien-so-dang-den-100260128235418163.htm
