99Bitcoins’ Q4 2025 State of Crypto Market Report

This report is presented in partnership with Crypto.com, a regulated crypto platform focused on security, usability, and global access. Together, we work to make crypto easier to understand and access.

Q4 has historically been the strongest quarter for crypto, with Bitcoin delivering average returns of 79% since 2013. Q4 2025 broke that pattern; instead of rallying, the market corrected, falling short of expectations and leaving many investors disappointed heading into the new year.

Total crypto market cap rose 18-21% from $3.3T in Q2 to $4.0T in Q3 2025, before contracting 25-27% in Q4 to $2.9T, marking one of the sharpest quarter-over-quarter (QoQ) drawdowns of the year.

The market declined alongside elevated trading volumes. Thus, signaling distribution and heightened risk-off behavior from investors. Overall sentiment remained bearish, averaging in the fear zone, with confidence fading steadily as prices fell and volatility increased.

What Actually Happened in Q4 2025: Summary

Retail search interest for Bitcoin remained almost flat through most of Q4, with only a brief spike in mid-November, and stayed well below the peaks seen in 2021. In contrast, blockchain-related mentions in SEC filings surged to a Q4 high of 8.26k in November, before dropping sharply in December.

State of the Crypto Market in Q4 2025

Investors this quarter were more focused on preserving their capital than trying to trade the market. Digital Asset Treasury (DAT) companies slightly increased their crypto holdings, with 118 firms now holding digital assets on their balance sheets. As of late December, the combined net asset value stood at $112.6 billion, with Bitcoin accounting for 83% of total holdings, or $93.4 billion.

Trading activity remained strong, with total volume reaching $887.3 billion over the past 30 days. Michael Saylor’s Strategy continued to dominate the landscape, holding an unmatched 660,624 BTC.

On the Ethereum side, 10 active companies collectively held 5,567,885 ETH, valued at approximately $16.4 billion. Among them, Bitmine Immersion Technologies emerged as the largest holder, with a substantial 3,864,951 ETH on its balance sheet.

ETF flows were largely positive through mid-year, with several strong inflow spikes between July and September reflecting solid institutional demand. However, momentum shifted in Q4 as outflows became more frequent. While inflows still appeared intermittently, they were far less consistent, signaling growing caution among ETF investors.

Despite this pullback, corporate Bitcoin holdings continued to edge higher, highlighting a clear divergence in behavior. While ETF investors moved to lock in profits, corporate buyers quietly accumulated. In total, ETF outflows reached roughly $5.5 billion in Q4 2025, the highest level since spot Bitcoin ETFs launched.

BlackRock’s iShares Bitcoin Trust (IBIT) accounted for the largest share of these redemptions, including a single-week outflow of around $435 million.

After talking to various experts, 99Bitcoins learnt that, unlike Q3, crypto hiring picked up only in select, specialized areas. Companies showed a clear preference for experienced professionals, with demand shifting toward non-engineering roles such as compliance, operations, and risk management. Entry-level opportunities remained limited, as most employers focused on senior talent with cross-domain expertise.

Blockchain development continued to rank among the fastest-growing skills globally, while 99Bitcoins also observed rising demand for cybersecurity and blockchain security roles. According to RecruitBlock, the global crypto talent pool has grown by over 50% since 2020, with hiring expected to increase another 30% over the next two years. Remote work is set to remain dominant, as companies increasingly hire talent from across the world.

VC investment in crypto softened in Q4, pressured by a wider market pullback and reduced expectations for near-term upside in Bitcoin. This marked a clear contrast to VC funding trends in Q3. As per Galaxy Digital,

A Look at Leverage Market & Stablecoin Adoption

Stablecoins now account for 30% of all on-chain crypto transaction volume, hitting a record $4 trillion+ in year-to-date volume by August 2025, up 83% from the same period in 2024. This surge in stablecoin usage has directly fueled growth in crypto-collateralized lending, which reached a new all-time high by the end of Q3 2025, overtaking the previous peak set in Q4 2021.

What’s changed is the market structure. On-chain lending dominated 66.9% of total crypto lending, up from 48.6% in Q4 2021, reflecting a clear shift toward decentralized borrowing. Within this segment, lending apps such as Aave now make up over 80% of on-chain borrowing, while CDP stablecoins like DAI have fallen to just 16%, down sharply from 53% in 2021.

Overall, the lending market has moved away from synthetic, crypto-backed stablecoins toward borrowing powered by centralized stablecoins like USDT and USDC. This shows a clear alignment with the broader rise in stablecoin adoption across on-chain activity.

On the other hand, a Q4 survey of 120 global investors by Coinbase suggests a more cautious outlook. 45% of institutional investors and 27% of non-institutional investors believe the market is already in a late-stage bull cycle. If this view proves accurate, stablecoin adoption could begin to level off in 2026.

At the same time, 38% of institutional respondents believe that macroeconomic risks pose the biggest potential threat to the broader cryptocurrency market.

CEX vs. DEX Performance

The rising DEX-to-CEX spot trade ratio showed that DEXs are starting to capture an increasing share of spot trading volume from centralized exchanges. From virtually 0% in 2019 to 20–22% by 2025 end.

While CEXs still dominate spot trading, DEXs now hold on to a larger base level of activity in every cycle, even when overall crypto volumes fall, pointing to a long-term shift of trading activity away from centralized exchanges.

We noticed volatility favored DEXs during stress and momentum phases. The sharp spikes in 2024-2025 suggested that DEX usage increased during periods of heightened volatility, when traders prioritized: Self-custody, censorship resistance, permissionless access.

During these moments, CEXs faced withdrawals, downtime, or regulatory pressure, temporarily pushing volume on-chain. In summary, CEXs still process more total spot volume, but DEXs are outperforming on a growth-rate basis.

Crypto Derivatives Market

In 2025, cryptocurrency derivatives trading totaled about $85.7 trillion, with an average daily turnover of roughly $264.5 billion. Activity remained steady at around $200 billion per day in Q1, began climbing in Q2, and peaked above $300 billion during July-August and again in October.

Despite the massive volumes, trading was highly concentrated among a few major exchanges. Binance dominated the market with $25.09 trillion in cumulative volume and an average $77.45 billion per day. Thus, giving it a 29.3% market share, nearly $30 of every $100 traded globally.

A clear second tier followed: OKX, Bybit, and Bitget each posted $8.2-$10.8 trillion in cumulative volume, with $25-$33 billion in daily averages. Combined with Binance, these four exchanges accounted for about 62.3% of total derivatives trading, underscoring the market’s strong concentration at the top.

In 2025, global crypto derivatives Open Interest (OI) told a story of panic, recovery, and overextension.

Throughout 2025, forced liquidations across long and short positions totaled roughly $150 billion, averaging about $400-500 million per day.

A Quantitative Breakdown of Bitcoin

Bitcoin significantly outperformed altcoins over the year. In the first half, many investors expected an altcoin season, with capital rotating out of Bitcoin and into altcoins, but this shift never occurred. As a result, market sentiment turned increasingly bearish. This was reflected on Polymarket, where 77% of participants predicted that Bitcoin would reach $80,000 before $150,000, while only 23% expected the higher target to be reached first.

Q4 is usually Bitcoin’s strongest quarter, but this time it was a shock. Bitcoin fell nearly 25% during the quarter, making it the worst Q4 since 2018, when the market was deep in a bear phase.

For more than a decade, the four-year cycle model had worked well and pointed to a peak in late 2025. Bitcoin topped in November 2013, December 2017, and November 2021, so most investors expected another November or December high in 2025. Instead, the market surprised everyone. Bitcoin peaked in October, much earlier than market expected, breaking the long-held pattern.  Interestingly, many analysts think that the 4-year cycle is still intact. As per the founder of Into the Cryptoverse, Benjamin Cowen:

We had a top in the fourth quarter of the post-halving year. But the nature of the current bear market is tracking the 2019 bear market, more than the 2014, 2018, and 2022, where it was just a slow bleed off the top. And what’s interesting is the top also occurred just before quantitative tightening (QT) ended. So the June 2024 top was 2 months before the QT ended in August and October 2025 top was 2 months before QT ended in December.

Bitcoin entered Q4 already extended after a strong H1. Price had been trending inside a rising parallel channel since roughly May-June 2025. This channel represented controlled bullish expansion, not parabolic excess, until late Q3. In early October, BTC rejected the upper boundary of the rising channel.

That rejection marked the cycle high and preceded a shift from trend-following to distribution. The market peaked earlier than historical Q4 seasonality suggested. Thus, setting the stage for a failed bullish continuation.

Analysis of Technical Indicators

Meanwhile, Bitcoin’s dominance remained high throughout Q4 as investors placed most trust in the king coin.

What Shaped Bitcoin’s Price Trajectory?

Bitcoin’s Q4 price action was driven by a mix of forces, including shifting macroeconomic conditions, on-chain dynamics, and the ongoing tug-of-war between demand and supply.

Macroeconomic Factors

99Bitcoins’ research shows that geopolitical factors came out as a major macro driver in Q4, shaping overall market risk sentiment. Rising conflicts, trade tensions, and energy-market disruptions redirected capital toward traditional safe havens like, while higher-beta assets such as Bitcoin faced increased pressure.

Geopolitical Tension & BTC-Gold Correlation

Recent U.S. actions related to Venezuela raised geopolitical tensions, increasing safe-haven demand. Meanwhile, Russia continued military actions targeting Ukraine’s Black Sea ports and energy infrastructure, threatening global trade and commodity supplies. These factors supported gains in gold and silver, while oil prices stayed relatively stable due to an abundant global supply. The rise in geopolitical risk also briefly influenced Bitcoin’s price, as investors reacted to the uncertainty.

Owing to investors’ declining confidence in the crypto market, we saw the Bitcoin-Gold ratio drop to its lowest level in nearly two years. Gold continued to attract safe-haven flows, while Bitcoin peaked earlier and underperformed through consolidation and pullbacks.

Bitcoin’s relationship with U.S. equities strengthened during periods of stress in Q4. As equity markets became more volatile toward the end of the year, Bitcoin showed a higher positive correlation with the S&P 500, moving largely in the same direction rather than decoupling.

U.S. & Global M2 Money Supply

During this period, the U.S. M2 money supply continued to expand, reaching a fresh record of roughly $22.3–$22.4 trillion by November 2025. At the same time, global M2 also increased, standing at approximately $97.47 trillion as of January 6, 2026.

However, despite these new highs in U.S. and global liquidity, fresh money did not meaningfully flow into risk assets during Q4. A large portion of the liquidity expansion was absorbed by government debt issuance, money-market funds, and bank reserves. As a result, Bitcoin failed to benefit from the traditional “excess liquidity” effect that powered previous bull markets.

Fed Rate Cut, High Tariffs & De-Dollarization Narrative

In December, the Fed delivered a widely expected 25-bps rate cut, lowering the federal funds rate to a range of 3.5%-3.75%, marking the third cut of the year. Meeting minutes showed that most FOMC members believe further cuts may be appropriate next year if inflation continues to ease, though policymakers remain divided on risks.

Some warned that sticky inflation could require higher rates for longer, while others favored deeper cuts to address early signs of labor market softening. The SEP also pointed to a more optimistic growth outlook for next year, reflecting a smaller-than-expected impact from tariffs. However, we must also highlight that investors’ confidence in the Fed’s data was at its lowest point in the last quarter.

One of the biggest shocks to the crypto market came in early April, when President Trump announced sweeping new tariffs, triggering a sharp risk-off move across stocks, crypto, and commodities. The impact was especially severe for import-dependent areas like blockchain development and crypto mining.

Higher tariffs pushed up the cost of mining hardware, components, and energy, adding pressure on miners worldwide. As trade tensions rose, market volatility jumped, with Bitcoin’s 30-day realized volatility climbing from 45% to 68% in April.

A 25% tariff on machines like the Antminer S19 added around $1,250 per unit, forcing miners to optimize or relocate operations. Even so, Bitcoin network hashrate growth has slowed by about 12% since March, reflecting growing disruption in global mining supply chains. Basically, tariff announcements earlier in the year increased global trade uncertainty, and their effects carried into Q4. Investors became more cautious, reducing exposure to Bitcoin.

99Bitcoins also found that De-dollarization, led by BRICS trade discussions, local-currency settlements, and reduced reliance on the U.S. dollar, remained a powerful macro theme in Q4. In theory, this should favor crypto, especially Bitcoin. However, in relaity, the narrative did not translate into immediate capital inflows.

U.S. Policy Support, Rising Debt & Bond Market Pressure

Investors got more clarity about the crypto market structure legislation, widely viewed as the next major regulatory milestone after the passage of the GENIUS Act on stablecoins. Several U.S. crypto bills expected to progress in 2026 could significantly improve market confidence.

U.S. federal debt climbed to $38.5 trillion in 2025, rising by $2.3 trillion over the year, or roughly $6.3 billion per day. Meanwhile, long-term Treasury yields remained range-bound in the low-to-mid 4% range, with the 10-year yield hovering around 4.15-4.19% by late December, near multi-month highs but below earlier peaks. These elevated yields made bonds more attractive than risk assets like crypto, weakening speculative demand.

That said, several analysts 99Bitcoins spoke to expect Bitcoin to eventually catch up to gold, as markets increasingly price in long-term currency debasement risks.

On-Chain Factors

On-chain data painted a far more constructive picture beneath the surface. Bitcoin added roughly 3.42 million net new non-empty wallets over the year, while Ethereum added about 34.85 million, nearly ten times more than Bitcoin. This growth pointed to steady accumulation and user onboarding, particularly among smaller holders, even as prices struggled to sustain rallies.

Whale activity remained largely patient rather than aggressive, while retail participation continued to build during consolidation phases. The widening gap between muted price performance and expanding network usage emerged as one of the year’s defining themes.

Key stakeholders holding between 10 and 10,000 BTC ramped up accumulation sharply throughout Q2, with no clear signs of slowing. At the same time, retail investors grew more cautious about how shifting monetary policy might affect their portfolios.

In fact, short-term holders steadily accumulated Bitcoin while price struggled to move higher. From October to early January 2026, the supply held by short-term holders rose sharply, even as BTC prices fell and then moved sideways. This suggests new or speculative buyers were entering the market, absorbing coins during dips and consolidation.

On the other hand, Bitcoin’s MVRV Z-Score steadily cooled throughout Q4, falling from elevated levels into a more neutral zone as prices declined and consolidated. This indicated that overvaluation pressures eased, with unrealized profits shrinking and speculative excess being worked off.

By late Q4 and early January, the Z-Score stabilized and began to tick higher alongside price, suggesting the market had reset from overheated conditions and was moving toward a healthier, more sustainable setup rather than a cycle peak.

After the October crash, markets moved into November with more caution. Traders cut position sizes and adjusted their risk, knowing policy news could still cause sudden price moves. Volatility stayed high, but leverage fell as traders became more defensive. To better understand market sentiment, we spoke with Ben Schiller, Head of Communications at Miden, a pioneering blockchain protocol. He noted,

There’s a lot of fatigue in the market right now, along with a wave of optimism around the Trump administration. The retail-driven phase of this cycle is still missing, we haven’t seen the level of retail participation that existed before the pandemic. Looking ahead to 2026, we expect Bitcoin to move higher, but the privacy coin sector is also one to watch, as it’s starting to gain momentum this year.

An Overview of Ethereum

Ethereum ended Q4 2025 down 28.28%, making it the fourth-worst fourth quarter in its history. Despite the price decline, network activity hit record levels.

SER entities (large holders like institutions or custodians) held 6.81 million ETH, worth about $21.94 billion. This represented 5.63% of Ethereum’s total supply, spread across 67 major participants. Ethereum ETFs, on the other hand, held 6.27 million ETH, valued at roughly $20.2 billion, which equalled 5.18% of the total ETH supply.

Ethereum spot ETFs shifted from strong inflows earlier in the year to net outflows, as ETH prices corrected sharply. October still saw mixed but relatively stable flows, while November and December were dominated by persistent red bars, showing sustained ETF selling.

According to Token Terminal, developers deployed 8.7 million smart contracts during Q4, the highest quarterly total ever. Stablecoin transfer volume on Ethereum also reached a new all-time high, surpassing $8 trillion in the quarter. This surge in activity pushed daily transactions to a record 2.23 million in late December, with transaction counts now up 48% year over year. Active monthly addresses also climbed to a new high, reaching 10.4 million in December.

Ethereum had two major upgrades in 2025, Pectra in May, focusing on staking and wallet functionality, and the significant Fusaka upgrade in December, which dramatically boosted Layer 2 scalability. The market, therefore, saw a great reduction in gas fees, which was in sharp contrast to earlier bull markets.

Through the technical analysis we found, Ethereum entered Q4 after peaking near the $4,800-$5,000 zone in late Q3. In October, the price broke down from its prior uptrend, forming a series of lower highs and lower lows, confirming a short-term bearish structure.

Looking at ETH Through a Technical Chart

The sharp sell-off from October into November marked a trend reversal, not just a shallow pullback. Momentum clearly weakened as buyers failed to defend previous support levels.

During November, ETH traded inside a descending channel, reflecting controlled but persistent selling pressure. Into December, price began to compress and stabilize, forming a modest ascending structure from the lows. Thus, suggesting selling pressure was fading. This price behavior points to distribution earlier in Q4, followed by base-building toward year-end.

Ethereum ended Q4 well below its Q3 highs, confirming the quarter as a distribution and correction phase.

Ethereum Staking Health Overview

We found a structural uptrend in Ethereum staking, even through periods of price weakness. In Q4, the percentage of ETH staked held near the upper end of its historical range, around 28-29%, with only minor and short-lived dips.

This showed validator exits were limited and long-term stakers largely chose to stay invested despite market volatility. Investors had strong conviction and confidence in Ethereum’s long-term outlook. Basically, Q4 price drawdown did not translate into a loss of trust in Ethereum’s network security or yield dynamics.

While total ETH staking rewards continued to grow over time, the staking yield steadily declined as more validators joined the network. Early on, rewards were high due to low participation, but as staking became more popular, yields compressed into the low single-digit range. By Q4 2025, staking rewards largely stabilized around 3-4%, reflecting a more mature and competitive staking environment.

Meanwhile, Ethereum staker revenue trended lower but remained stable overall. Revenues started the quarter around $11-13 million per day in October, supported by occasional MEV and priority fee spikes, before easing through November as on-chain activity and speculative trading cooled. By mid-quarter, daily staker revenue settled closer to the $8-9 million range, reflecting a quieter network environment.

All of the data above pointed to the fact that ETH’s long-term holders were largely inactive, even as prices fell and consolidated. For most of the quarter, Coin Days Destroyed (CDD) metric stayed relatively low and steady, indicating that older ETH coins were not being moved in large amounts. This suggested that the price decline was driven more by short-term traders than by long-term investors exiting their positions.

Ethereum’s Derivatives Market Analysis

In Q4 2025, Ethereum’s derivatives market went through a clear leverage reset. Open interest dropped sharply in October as prices fell, driven by a large wave of long liquidations rather than fresh short positioning. This early shakeout flushed out overleveraged traders and removed excess risk from the system.

Following this reset, liquidations remained subdued and open interest stabilized through November and December, while ETH traded in a tighter range. The combination of lower leverage and reduced forced selling pointed to a more cautious market sentiment.

On the other hand, Ethereum’s funding rates stayed mostly close to neutral, showing a market that was pretty cautious of its move. After a sharp negative funding spike in early October, which lined up with the big price drop and long liquidations, funding quickly normalized.

Through November and December, funding rates stayed positive with only brief dips. This suggests traders were no longer heavily leveraged. Several well-known industry figures remain positive on Ethereum’s long-term outlook. Tom Lee, chairman of BitMine, believes Ethereum’s upside is best seen by comparing its price to Bitcoin, and says ETH could rise sharply if Bitcoin goes up higher. Tom Lee said:

This is why we think the price ratio of Ethereum to Bitcoin is really the most important to watch. If Bitcoin gets to $250,000, which is our view, and Ethereum trades at its eight-year average ratio, that’s $12,000 Ethereum. If it gets to the 2021 high, that’s $22,000 Ethereum.

Key Crypto Sectors at a Glance

RWAs, Layer-1s, and utility-focused networks emerged as the strongest sectors in late 2025. Tokenized real-world assets expanded by about 260% over the year, making them one of the fastest-growing areas in crypto. High-performance Layer-1s and major altcoins like Solana and XRP benefited from ecosystem growth, ETF interest, and improved regulatory clarity, while smaller DeFi projects and memecoins fell out of favor as liquidity tightened.

Ethereum and its Layer-2 ecosystem stood out on fundamentals. DeFi activity remained strong, with total value locked nearing $165 billion, pointing to rising use of programmable, utility-driven networks rather than speculative tokens.

2026 Outlook for Bitcoin, Ethereum & Broader Crypto Market

As more capital flows in through regulated products like ETFs and blockchain use cases continue to expand, 2026 could be a year of steady growth, though volatility and macro risks are still expected.

Disclaimer: This content is for informational purposes only and should not be considered financial, investment, or trading advice. Please conduct your own research before making any financial decisions.

The post 99Bitcoins’ Q4 2025 State of Crypto Market Report appeared first on 99Bitcoins.

Read More

99Bitcoins’ Crypto Reports

99Bitcoins

[crypto-donation-box type=”tabular” show-coin=”all”]