Bitcoin’s performance in 2025 is being shaped by monetary policy, regulation, institutional adoption, and political developments.
The U.S. Federal Reserve remains the most influential factor, with signs of easier liquidity driving rallies while tighter policy dampens demand.
Regulation is now more supportive, with the GENIUS Act and CLARITY Act providing clear rules and encouraging institutional confidence.
This has led large investors to build substantial Bitcoin reserves, reducing supply. Political events continue to create turbulence.
Trump’s dismissal of Fed Governor Lisa Cook unsettled markets, but the weaker dollar that followed gave indirect support to Bitcoin. These forces continue to define its path.
Bitcoin’s Latest Decline and Global Economic Pressures
Bitcoin recently fell to $108,450, its lowest level in 50 days after dipping briefly below $108,000. The drop erased about $137 million in leveraged long positions and occurred alongside a 1.2% decline in the Nasdaq 100.
The timing raised questions about whether the growth narrative around artificial intelligence can continue to sustain equity markets. Traders are weighing whether Bitcoin’s decline reflects broader economic pressures or internal crypto-specific factors.
The U.S. economy showed further weakness when July trade figures revealed a deficit increase of 22%.
Imports exceeded exports by $103.6 billion, much higher than forecasts. Analysts warned this result could slow economic growth in the third quarter. Investor concerns also rose after reports of unusual insider activity.
One X user, Malone_Wealth, highlighted that the 200 largest insider trades last week were all sales. Regulatory filings confirmed significant disposals.
Walmart’s Jim C. Walton sold $961 million, Snowflake’s Frank Slootman $164 million, Amer Sports’ Dennis J. Wilson $160 million, Dutch Bros’ Travis Boersma $81.5 million, and Klaviyo’s Andrew Bialecki $73.7 million.
China’s financial sector added to global unease. The country’s five largest banks reported record low margins and a sharp rise in non-performing loans.
The Financial Times reported that banks wrote off $5.2 billion in bad debt during the first quarter, an eightfold increase compared with last year.
This development illustrates the pressure on China’s financial system and raises concerns about potential global consequences. Together, these factors have intensified caution in global markets and reinforced a restrained appetite for risk.
Has the Era of 70 to 80% Bitcoin Crashes Ended?
In earlier cycles, Bitcoin was known for severe declines after each halving, with losses typically ranging from 70% to 80%.
After 2017, the decline reached 84%, while the cycle following the 2021 peak saw a 77% fall. These sharp corrections created the perception of extreme vulnerability and discouraged many potential investors.
Industry participants now argue that such declines may no longer be likely. Chow from Solv Protocol told CNBC that the largest decline in this cycle has been 26%, far less than in previous downturns.
He attributed this to the presence of long-term holders and consistent institutional participation, which now limit the impact of mass sell-offs. Corrections of 30% to 50% are still possible if economic or regulatory shocks occur, but they are expected to be shorter and less damaging.
Hougan shared a similar perspective, noting that the maturity of today’s Bitcoin market makes catastrophic declines less likely. Institutional investors, unlike many retail participants in earlier years, are more inclined to hold through downturns rather than sell during periods of stress.
This behaviour has reduced the likelihood of the devastating collapses of past cycles. While volatility remains, Bitcoin is now supported by stronger structural foundations and appears less prone to the extreme crashes of its earlier history.
Conclusion
Bitcoin’s fall below $108,500 highlights the influence of global conditions, including the widening U.S. trade deficit, heavy insider share sales, and the growing strain on Chinese banks. Yet beneath these challenges, Bitcoin has developed more resilience.
Clearer regulation, institutional involvement, and long-term holders have created a sturdier base that makes the sharp 70% to 80% declines of the past less likely. Corrections of 30% to 50% remain possible, but they are less severe than the wipeouts of earlier cycles.
Whether Bitcoin advances toward $100,000 soon is uncertain, but it is clear that its performance now reflects broader economic and political conditions more closely than ever.