2025 has been an extremely volatile year for Bitcoin, with record highs and strong sell-offs. The world’s largest crypto asset is at risk of ending the year down for the first time since 2022 due to the sharp swings it has experienced throughout the year.
Bitcoin 12 month chart
Bitcoin Rise in 2025 Could End in Year-End Slump
Global stock indices have also fluctuated due to market concerns over tariffs, interest rates and artificial intelligence.
Analysts say the correlation between Bitcoin and stock markets has strengthened significantly this year, with the crypto asset now much more responsive to macroeconomic developments.
Bitcoin’s rally in early 2025 accelerated with the election of pro-crypto US President Donald Trump. However, the new tariffs announced in April severely shook crypto markets and stocks.
Bitcoin then recovered, hitting an all-time high above $126,000 in early October. However, the market crashed again on October 10 when Trump announced new tariffs on Chinese imports, triggering a deleveraging of more than $19 billion. This is the largest liquidation of its kind in crypto history.
Bitcoin saw its biggest monthly decline since mid-2021 in November, while investors’ price expectations for the end of the year also weakened. Market participants still see a 15% chance that Bitcoin will end the year below $80,000.
This ratio was around 20% a few weeks ago. It’s a depressing picture for big investors like Michael Saylor’s Strategy, which is forecasting a return of $150,000 for the year.
Experts believe that Bitcoin’s synchronization with stocks, especially AI companies, is mainly due to the increased participation of traditional investors and the speculative perception of the two asset classes. According to LSEG data, the correlation between Bitcoin and the S&P 500 averaged 0.5 through 2025, while the correlation with the NASDAQ 100 stood at 0.52.
Analysts say interest rate cut expectations and the trajectory of artificial intelligence companies will determine the price of Bitcoin in the final weeks of the year. With an 86% probability that the US Federal Reserve will implement a 25 basis point rate cut this week, the Fed’s messaging is expected to largely determine the direction of crypto markets.
*This does not constitute investment advice.