Year ahead 2026 – Where will Bitcoin be in a year’s time?

• Investors cool on risk-on crypto trade as 2025 ends.
• Correlation with risk assets decouples; DATs, IPOs, ETF boom stalls.
• Will regulatory clarity revive bullish momentum in 2026?
• Floor at 94,000 in 2025, top at 150,000 in 2026?

Bitcoin ends 2025 down after a mid-year 30% surge

Bitcoin, which accounts for roughly 60% of total crypto market capitalization, entered 2025 with unstoppable momentum under a crypto‑friendly Trump administration. The rally was supported by major regulatory wins and accelerating institutional adoption. Key developments included the Genius Act, passed during “Crypto Week”, establishing a federal stablecoin framework, and the Clarity Act, still pending Senate approval, addressing broader market structure. A softer SEC stance with innovation exemptions under “Project Crypto” further boosted overall sentiment encouraging mainstream participation - with DATs, IPOs, and ETFs surging.

Combined with deeper crypto‑banking integration – including JPMorgan’s and other banks' strategic partnerships with crypto exchanges, as well as the launch of their own on‑chain deposit tokens – these factors helped push Bitcoin to six all‑time highs in 2025. The total crypto market cap briefly topped $4.4 trillion.

For a moment, “crypto got everything it wanted”, but sentiment deteriorated quickly. The rally from $94,937 on January 1 to the October 6 peak of $126,163 – despite a tariff-driven drop to $74,470 on April 2 – unraveled after a 42-day government shutdown stalled key legislation and a $20 billion liquidation wipeout followed tariff threats on October 10. Bitcoin slid to $80,500 in late November before stabilizing near $90,000 in early December, and the total market cap shed over a trillion to retreat to $3.1 by year end.

Now on track to finish the year down roughly 3% (as of early December) with annualised volatility between 60-80%, traders are debating whether this is a healthy reset or the start of a deeper retreat.7

Q4 meltdown – Correlations with risk assets, Gold lose spark

The final quarter of 2025 marked a decisive shift in Bitcoin’s behaviour. Long viewed as both a “digital safe haven” and a high‑beta risk asset, Bitcoin moved out of sync with both gold and the equities it typically tracks.

While Bitcoin has historically rallied alongside stocks during monetary easing cycles, that relationship broke down this year, particularly after the October crypto crash (as illustrated in the chart). The largest crypto asset lagged through much of H2 and even fell during the Fed’s final two rate cuts, putting it on track for its cleanest divergence from equities in a decade, according to data compiled by Bloomberg.

Year‑to‑date, the S&P 500 and Nasdaq 100 are up more than 16% and 22% respectively, and gold has surged over 60%, while Bitcoin is down.

Momentum flows seem to have shifted into precious metals and the AI‑fuelled equity rally. These cross‑currents may persist into 2026, with further Fed easing likely supporting equities while geopolitical uncertainty continues to favour gold.

Institutional outlook: DATs, ETFs, IPOs lose trust badge – Can it be restored?

Institutional adoption remains a key driver for 2026, but late‑2025 volatility has cooled enthusiasm, as crypto investment vehicles proved less reliable than expected.

The year’s hottest trade – digital asset treasuries (DATs) - that is public companies using corporate cash to acquire Bitcoin and other digital tokens, collapsed after soaring in H1 – most fell by about 43%, others by as much as 99%. Most notably, SharpLink Gaming, which pivoted to Ethereum acquisitions, surged 2,600% before plunging 86%, now trading below the value of its Ether holdings.

Investors realised that holding digital tokens generates no yield, leaving many DATs struggling to service debt‑financed acquisitions. Even the sector’s bellwether, Michael Saylor’s Strategy Inc., with $60 billion in Bitcoin, saw its stock fall below its net asset value in November - plunging more than 60% from July. The firm now faces potential MSCI index exclusion by January 15, which could trigger up to $8.8 billion in outflows if other index providers follow suit.

Crypto IPOs also struggled - Galaxy Digital listed in May, stablecoin issuer Circle in June, followed by Gemini and the Trump‑affiliated American Bitcoin - but many underperformed post‑debut.

ETFs faced similar pressure. Bitcoin ETFs recorded $6 billion in global outflows in November - nearly their worst month since the 2024 launch. BlackRock’s iShares Bitcoin Trust saw its longest streak of weekly withdrawals, with $2.7 billion pulled over five weeks that month.

That said, the Clarity Act could reignite momentum, unlocking a second wave of tokenisation, stablecoin and digital credit listings, as several firms remain in the IPO queue for early 2026.

Bitcoin options signal ‘crypto winter’ caution

Bitcoin traders are bracing for range-bound action in the months ahead. Options data show short-dated contracts dominating, with volatility sold off and traders expecting muted near-term moves, while longer-dated contracts leave room for larger swings later.

Perpetual futures contracts for Bitcoin, the most heavily traded crypto instrument, remain bearish, with negative funding rates meaning shorts pay longs to hold positions. Ether and altcoins face similar pressure, while DeFi volumes remain subdued since the October 10 liquidation. Meanwhile, open interest in Solana, XRP and other tokens has yet to recover meaningfully, according to Coinglass data. On this note, 2025 marked the year when altcoins significantly underperformed with the CMC Altcoin Season Index, which measures the performance of the top 100 altcoins relative to Bitcoin, dropping to nearly its yearly low of 12.

This said, the current lacklustre action raises concerns of yet another 'crypto winter’, a term cemented in the industry to define the broader boom‑and‑bust nature of digital assets. The last major 'winter' occurred between 2021-2023 during which Bitcoin fell more than 70% from peak‑to‑trough. 

Upside still in the cards - Could $150,000 be next?

The market currently lacks clear direction, with Bitcoin trading in a narrow $90,000-$95,000 range. However, JPMorgan analysts identify a potential floor near $94,000 into year‑end and project meaningful upside through 2026. Their forecast for next year sees Bitcoin approaching $150,000-$170,000, supported by ETF growth, a reset of corporate crypto treasuries, expanding stablecoin integration by banks and increased availability of crypto custody, staking and lending services. Wall Street’s push toward asset tokenisation is set to further strengthen the structural case.

Additionally, major blockchain upgrades - including Ethereum’s Pectra and Fusaka launches — are expected to accelerate payment‑network integration. Ethereum could rise to $8,000-$10,000 with network expansion and renewed DeFi momentum, as well as demand by a rising 'future-of-money' stablecoin and central bank digital currencies (CBDCs) industry for its blockchain infrastructure.

Potential headwinds

Bitcoin could face several challenges in 2026. Tighter monetary policy, slower economic growth or a new wave of tariff threats could weigh on prices if central banks revert to a restrictive stance .

Moreover, regulatory crackdowns in key markets remain a possibility, even though crypto oversight was not included in the SEC’s 2026 agenda. That said, new IRS reporting rules taking effect on January 1, 2026, requiring exchanges to report cost‑basis details for all customer transactions, may increase compliance burdens and influence investor behaviour.

Additionally, competition from Ethereum, Solana and other networks, combined with broader economic volatility or a potential equity‑market downturn, could further pressure Bitcoin’s performance.

What lies ahead: Outlook hinges on ‘Clarity’

The sharp reversal of 2025 revealed both the fragility and resilience of the crypto market. Prices fell, institutional momentum faded, and Bitcoin trailed the S&P 500 for the first time in over a decade - a rare divergence despite an administration pledging to make America the “crypto capital of the world.”

Renewal may hinge on the forthcoming ‘Clarity Act’ in early 2026, which promises long‑awaited regulatory certainty. Momentum could be further reinforced by crypto‑friendly leadership, with Kevin Hassett emerging as Donald Trump’s top candidate to lead the Fed, a move markets expect to bring a dovish and digital‑asset supportive stance.

If combined with Fed cuts, solid economic growth, the AI‑driven equity boom, expanding blockchain payments, and sustained stablecoin demand, the essential pieces could be reassembled, provided none are found missing, and conditions could align for a renewed bullish phase. Structural tailwinds suggest Bitcoin may still target $150,000, though risks remain should regulatory or economic shocks materialise.