2025 Bitcoin: "Contrasting Four Seasons" of Market Factors and Policies

2025 is seen as a “shipwreck” year for cryptocurrencies — from a historic peak of $124,774 (on October 7) down to $84,682 USD (on November 23), Bitcoin has experienced dramatic fluctuations like four seasons in one year. The core of this story is not the price, but the invisible forces that have driven the market: policy signals, expectations of monetary easing, and concerns over the global economy.

Optimistic Spring: When Trump and the Fed “Align”

On January 1, 2025, Bitcoin started the new year at $93,507.88 — a seemingly normal figure but full of potential. Just a few weeks later, BTC broke the $100,000 mark in early February, opening a period filled with industry-wide optimism.

The reasons? Two main factors:

First, the U.S. Federal Reserve (Fed) sent clear signals: the policy meetings in January and February kept interest rates steady at 4.25%-4.5%, but with cautious statements like “monitoring closely, expecting to loosen.” The February meeting minutes revealed that most officials acknowledged “rate cuts in 2025 remain the main trend,” with organizations forecasting at least two 25 basis point reductions.

Second, former President Trump returned to the White House on January 20 — an event regarded as significant in the crypto market. He is called the “Crypto President” for his publicly supportive history of Bitcoin. The synergy between the Fed’s easing policy and Trump’s crypto-friendly stance created a “storm of optimism” that few anticipated.

Difficult Summer: When Tariffs and Inflation Fears Strike

From late February, Trump began announcing tariff plans. On March 4, tariffs on Canada and Mexico officially took effect, sparking a new “trade war.”

The market reevaluated the entire context: investors started to worry that tariffs could trigger a surge in inflation, forcing the Fed to change its strategy. Risk-averse sentiment rose, capital flowed out of risky assets like Bitcoin, and moved into USD and cash.

By March 23, the Fed’s policy meeting confirmed fears: the Fed did not cut interest rates, but raised inflation forecasts, signaling a “possible slowdown in easing.” The previously optimistic expectations of rapid rate cuts were dashed. Bitcoin reacted with a sell-off wave, dropping from its January peak.

Raging Autumn: When Crypto Policies Rise Above

But not everything was bleak. From May onward, a “crypto summer” began to emerge with strong policy-driven boosts.

U.S. Crypto Week (14-18/7) marked a turning point: three major bills were passed:

• GENIUS Act (17/6, passed by the Senate): establishing the first legal framework for stablecoins in U.S. history
• National CBDC Ban Bill (17/7): passed by the House with 219 votes
• CLARITY Act (23/6, 17/7 House approval): clearly defining digital assets related to blockchain

At the same time, the Fed began to cut interest rates again. On September 18, the Fed made its first cut of the year, lowering rates to 4%-4.25%, signaling a new easing cycle. Many central banks worldwide started to include Bitcoin in their foreign reserves — the Dutch Central Bank announced holding $1.5 billion in BTC, creating a positive domino effect.

These months are considered the “autumn of October” of the year — when Bitcoin repeatedly hit historic highs. On August 14, BTC reached $123,561, then surpassed further to $124,774 on October 7. Despite looking at what season October is in the context of the global economy, the market continued to rise supported by key policy factors.

IPO of Circle (5/6), Hong Kong’s Stablecoin Bill Draft (1/8), Trump family’s activities in the crypto industry… all had positive impacts. On October 1, the U.S. government shut down for 43 days, increasing demand for “safe-haven” assets, with Bitcoin becoming the preferred choice for institutional and retail investors.

Cold Winter: When Macroeconomics Dominate Sentiment

However, after months of exuberance, a shadow of economic downturn loomed.

From November, Bitcoin began to lose momentum. The BTC price dropped from $109,574 on November 1 to $84,682 on November 23 — a 22.71% decline in just three weeks. Most of the subsequent period fluctuated around $90,000, but the upward trend was clearly halted.

Main reasons:

First: The U.S. government shutdown led to missing key economic data, creating uncertainty about the economic fundamentals. The market feared that U.S. fiscal health might be worse than expected.

Second: The Fed signaled caution before continuing rate cuts. Although expectations of further easing persisted, Fed’s cautious stance caused market divisions. On December 10, the Fed made its third cut of the year, but it was seen as a “recession-style cut” — lowering rates to save a weak economy, not driven by strong growth. This increased pessimism.

Third: Digital Asset Trading companies (DAT) faced operational difficulties, with increased liquidations due to volatility, further pushing the market down.

Currently, Bitcoin is around $91.99K, with an ATH of $126.08K — indicating that from October’s peak, the market has lost about 27% of its value. The market hopes for a “Christmas rally,” but that remains just a “last hope” in a year full of volatility.

Overall Remarks

2025 proves that Bitcoin is no longer an isolated asset but increasingly exhibits characteristics of traditional financial assets. Its price is driven by:

• Global monetary policy (Fed, other central banks)
• Trade policy expectations (Trump tariffs)
• Macroeconomic sentiment (recession fears, fiscal uncertainty)

A more complete legal framework for cryptocurrencies is positive, but dependence on macro factors is becoming more evident. In 2026, key variables will continue to be: Fed policy statements, inflation expectations, and global economic health. Bitcoin will continue to act as a “barometer” of market risk sentiment.