Bitcoin’s Rollercoaster Ride: Navigating Volatility and Future Trends
Bitcoin has experienced significant price swings recently, with a more than 50% drop from its peak of $124,720 in October 2025 before a partial recovery. This volatility has sparked debate about the reasons behind the downturn, with varying interpretations emerging from financial analysts.
The Recent Crash: A Deeper Dive
Bloomberg highlighted a $2 trillion slide since October, calling it “unusual and unclear.” Others suggest simpler explanations for the price halving. Experts at Amina Bank identify “100 reasons” for the rapid price decline, noting a broader trend towards less risky assets and a reaction from newer retail investors unfamiliar with Bitcoin’s typical volatility.
Volatility as a Feature, Not a Bug
Franz Bergmüller, CEO of Amina Bank, points out that Bitcoin historically experiences corrections of 58-72% within four-year cycles. He emphasizes preparedness for such downturns, noting that the past two years have been successful for growth. While revenue from asset custody may decrease with lower prices, trading volumes remain relatively high.
Bergmüller states, “Practically all have provided additional collateral given that they believe in the potential.” This highlights continued confidence among investors despite the price drop.
Margin Calls and Investor Resilience
Bitcoin Suisse has also observed a similar trend, with many credit customers adding funds to their accounts. Peter Camenzind, CEO of Bitcoin Suisse, notes that the firm acts as an intermediary for loans between customers and has seen increased activity in this area. He suggests the market may be finding a bottom, with some signals indicating stabilization.
Bitcoin Suisse has proactively reduced costs, adjusting its staff from 300 to 200 and outsourcing some production to Slovakia, demonstrating a commitment to cost discipline.
Impact on Major Holders: Strategy’s Losses
The price decline has significantly impacted major Bitcoin holders. Strategy (formerly MicroStrategy) reported a net loss of $12.6 billion in the fourth quarter of 2025, largely due to unrealized losses on its Bitcoin holdings. Its stock price fell 17% following the announcement. Strategy aggressively acquired 218,887 Bitcoin for $20.5 billion in the fourth quarter, now holding a total of 713,502 Bitcoin with an average purchase price of $76,052 per coin.
Large Investors and Market Dynamics
Pascal Hügli, a crypto specialist at Privatbank Märki Baumann, notes that Strategy’s large position is increasingly viewed critically within the industry, raising concerns about potential forced sales. He observes that relatively few Bitcoins are being moved on the blockchain, but those transactions involve large sums, indicating that primarily large investors are driving market movements.
Hügli points out that investor leverage has decreased since October, suggesting the market hasn’t yet reached a bottom. He anticipates a period of consolidation, with Bitcoin trading between $55,000 and $70,000, which he describes as a “value zone.”
Extreme Fear and Potential Reversal
The Fear and Greed Index from Coinmarketcap recently indicated “extreme fear.” Hügli believes a collective increase in short positions could signal a market bottom, offering an entry point for long-term, contrarian investors.
He also notes that Bitcoin has not yet established itself as a widely used payment method or a reliable “digital gold” alternative.
Shifting Ownership and Deleveraging
A study by 21Shares reveals that realized losses are concentrated in short-term wallets (those active for less than three months). However, the number of large Bitcoin holders has increased by 6.6% to 1299 since November, suggesting a transfer of holdings to larger, less price-sensitive investors, consistent with deleveraging.
Russel Barlow, CEO of 21Shares, states the price decline was expected and that customers have remained resilient, with continued inflows of new capital from both retail and institutional investors. He also notes a growing interest in alternatives to Bitcoin and Ethereum.
Pro Tip
Frequently Asked Questions (FAQ)
- What caused the Bitcoin price crash in late 2025?
- Multiple factors contributed, including a broader shift towards less risky assets and reactions from newer investors to price declines.
- Is Bitcoin still a good investment?
- That depends on your risk tolerance and investment goals. Experts suggest it remains a high-risk, high-reward asset.
- What is the Fear and Greed Index?
- It’s an indicator of market sentiment, ranging from “extreme fear” to “extreme greed.”
- What is deleveraging in the context of Bitcoin?
- It refers to investors reducing their leveraged positions, often by selling assets to cover margin calls.
Did you know? The Bloomberg Terminal now quotes Bitcoin in millions, reflecting its growing status as a high-value asset.
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