Bitcoin set for first yearly loss since 2022 as macro developments weigh on crypto

By Hannah Lang

Dec 31 (Reuters) – Bitcoin is on observe to submit its first annual loss since 2022, as macroeconomic pressures and fading momentum weighed on the world’s largest cryptocurrency.

Regardless of reaching a contemporary report ​excessive this yr, bitcoin has struggled to regain its footing since October, and final month skilled its greatest ‌month-to-month drop since mid-2021. Now, it’s on observe to finish the yr greater than 6% decrease, after posting yearly positive factors the earlier two ‌years. It was final buying and selling at $87,474.2.

After hovering earlier this yr with the election of crypto-friendly U.S. President Donald Trump, cryptocurrencies – together with shares – plummeted in April on his tariff bulletins. They shortly rebounded, with bitcoin hitting an all-time peak above $126,000 in early October.

However simply days later, on October 10, the market plunged once more when Trump introduced a brand new tariff on Chinese language imports ⁠and threatened export controls on important software program. ‌That sparked greater than $19 billion value of liquidations throughout leveraged crypto market positions, the most important liquidation in crypto historical past.

The world’s essential inventory benchmarks have additionally had a turbulent yr, repeatedly hitting ‍report peaks after which pulling again as worries over tariffs, rates of interest and a doable AI bubble whipsawed markets.

“In 2025, the market confirmed that bitcoin more and more displays the traits of a danger asset inside the international monetary system, with a notable correlation to the U.S. ​fairness market throughout a number of intervals,” stated Linh Tran, a senior market analyst at XS.com.

Analysts say bitcoin’s gyrations in ‌2025 more and more tracked inventory market sentiment as conventional retail and institutional traders jumped into cryptocurrencies, which subsequent yr could also be much more carefully tethered to elements driving shares and different danger property, similar to financial coverage shifts and nervousness over the lofty valuations of AI-related shares.

Traditionally, bitcoin and shares didn’t transfer in tandem as a result of crypto was seen instead funding. However with broader crypto adoption by conventional retail traders and a few establishments, the correlation seems to be strengthening, ⁠analysts stated.

WINS IN WASHINGTON

The crypto trade notched main regulatory wins in ​the U.S. beneath the primary yr of the Trump administration, together with the ​Securities and Alternate Fee’s swift transfer to dismiss Biden-era lawsuits in opposition to Coinbase, Binance and others, in addition to the passage of a landmark legislation creating federal guidelines for dollar-pegged crypto tokens.

However crypto ‍market construction laws and carve-outs from ⁠SEC guidelines that ought to repair core, longstanding issues for the trade are but to return, threatening to sap the trade’s celebratory temper, in keeping with a number of trade executives.

Trump courted trade money pledging to be a “crypto president,” and ⁠his household’s personal crypto ventures have helped to propel the sector into the mainstream, say executives.

Crypto firms and executives donated greater than $245 million ‌within the 2024 election cycle to advertise pro-crypto candidates together with Trump, in keeping with Federal Election Fee knowledge.

(Reporting ‌by Hannah Lang in New York; Modifying by Chizu Nomiyama)