1. The stark contrast between heated policy hype and market indifference
In early 2025, the Trump administration's crypto-friendly policies sparked market imagination: On January 1, Trump's personal meme coin TRUMP launched with a daily increase of 1250%, briefly surpassing a market value of 4 billion USD, which helped Bitcoin surge from 97,000 USD to 105,000 USD; in March, an executive order established Bitcoin's status as 'digital gold', authorizing the Treasury to create a national strategic reserve, and coupled with the SEC's signals of regulatory easing by initiating approvals for over 30 altcoin ETFs, the market widely predicted that crypto assets would usher in a 'policy dividend period'.
However, this enthusiasm was quickly extinguished by the cold price trends. As of October 2025, Bitcoin recorded only a 2.13% quarterly cumulative increase for the year, with a closing price of $110,700, experiencing multiple rounds of severe fluctuations: in February, due to Trump's tariff threats and the Bybit exchange's $1.5 billion theft case, it fell 8% in a single day, breaking below the $90,000 mark, with over 310,000 people liquidated for amounts exceeding $900 million; in March, TRUMP coin's 12% plunge triggered a chain reaction, causing Bitcoin to pull back over $1,100 within the day; even with the Federal Reserve cutting rates by 25 basis points in October and ending quantitative tightening, it failed to push past previous highs, instead falling into a vicious cycle of 'price drop upon news release'.
Two, the 'lagging behind' predicament in asset comparison
When comparing various major assets horizontally, Bitcoin's performance is dismal:
In the internal crypto market: Ethereum has exploded due to DeFi ecosystem and enterprise treasury allocation demand, with a rise of 59.16% in Q3 2025. Altcoins like SOL and XRP have seen even greater increases due to expectations of ETF approvals, forming a pattern of 'leading coins stagnating, altcoin frenzy';
Traditional financial assets: Gold has steadily risen under the continuous accumulation (over 1000 tons annually) by central banks around the world, with the total value of global official gold reserves reaching $4.5 trillion, while the total market cap of the crypto market where Bitcoin resides is only $3.85 trillion, less than 90% of gold; the S&P 500 index benefits from moderate expansion of the US economy and the recovery of tech stocks, having risen over 10% for the year, while the bond market has also gained steady returns due to expectations of rate cuts by the Federal Reserve;
Institutional capital flow: Despite Bitcoin ETF inflows exceeding $169.5 billion, BlackRock's IBIT fund has a management scale of $88 billion, but the concentration of funds has not translated into price momentum, instead showing a phenomenon of 'buying exhaustion leads to pullbacks'. Conversely, Ethereum ETF has seen capital outflows but achieved rapid market cap growth through ecosystem upgrades.
Three, the triple core contradictions behind disappointment
The dislocation between policy narrative and actual support: Trump's 'crypto debt repayment' concept has been criticized by economists as a 'political performance'—the current total market cap of the crypto market is less than $5 trillion, and to cover $38 trillion in US national debt, Bitcoin's price would need to soar to $1.16 million, while its average daily trading volume of $70 billion is far from sufficient to support such a scale of liquidity conversion; policies like 401(k) account investment authorization have failed to generate substantial capital inflow due to high compliance thresholds and cautious attitudes from institutions.
Insufficient compatibility between the macro environment and risk assets: Although the Federal Reserve cut interest rates in October, the core PCE remains high at 2.8%, and the combination of 'dovish actions + hawkish guidance' has left the market skeptical about future easing. As a high-volatility asset, Bitcoin struggles to attract stable funds for long-term holding in a context of uncontrolled inflation and 'K-shaped economic divergence', becoming a 'speculative tool' for short-term traders.
The impact of market structure and fund diversion: The SEC's advancement of ETF approvals for altcoins like SOL and LTC has allowed institutional funds to allocate diversified crypto assets through compliant channels, leading to the diversion of incremental funds that were previously concentrated in Bitcoin; at the same time, although 'whale' holdings have increased by 2.5%, they are largely held indirectly through ETF channels, lacking the direct price-driving effect of increased holdings, causing Bitcoin to be in the awkward situation of '57% market cap but the lowest increase'.
