Tom Lee, the representative bull from Wall Street, quietly adjusted his year-end forecast from $250,000 to "perhaps recovering" to $125,100, a change that reflects a collective failure of the entire market prediction system.
As the end of 2024 approaches and into early 2025, Bitcoin's price rises amid optimism surrounding the halving expectations and the approval of spot ETFs, with a widespread expectation of a "$200,000" target. Analysts painted a seemingly clear path: reduced supply, institutional influx, and improved regulation.
However, the reality is that Bitcoin fluctuated repeatedly in 2025, with the year-end price showing a significant gap from mainstream predictions made at the beginning of the year, as the market did not follow the anticipated smooth upward trend.
1. Consensus of Predictions: The Carnival of Institutional Narratives
At the beginning of 2025, the Bitcoin market formed a rare consensus expectation. Multiple institutions and well-known market figures provided a relatively concentrated annual target range, with $200,000 becoming a recurring anchor point.
● This is not a fringe view. Wall Street bulls, including Tom Lee, emphasized institutional allocation and macro tailwinds; Cathie Wood and her team argued for higher valuation space based on long-term adoption and structural deflation.
● The core pillar of market optimism is the approval of Bitcoin spot ETFs. The batch of ETFs approved by the U.S. Securities and Exchange Commission in 2024, particularly BlackRock's IBIT fund, became one of the most successful debut products in the ETF industry in 35 years.
Traditional financial institutions finally gained access to regulated investment tools, and the influx of mainstream capital into the market was just a matter of time.
2. Reality of Divergence: Misalignment of Price and Expectations
Entering 2025, Bitcoin's actual performance sharply contrasted with the optimistic predictions made at the beginning of the year. Although the price rose multiple times throughout the year and reached new interim highs, the upward trajectory was highly unstable.
● Whenever the price approached high ranges, volatility quickly amplified, and pullbacks repeatedly interrupted the trend. After Bitcoin's price broke $122,000 in July, setting a historical high, the market did not continue to break upward as expected but instead entered a period of high volatility.
● Analyzing the market at the end of 2025, Bitcoin remained in the high range of $90,000, but market sentiment had plunged to extreme fear levels not seen since the pandemic in 2020. The Fear and Greed Index briefly touched 16, marking the coldest emotional reading since the global pandemic crash in March 2020.
The extreme divergence between price and sentiment reflects a structural differentiation within the market.
3. Cycle Transition: The End of the Four-Year Halving Narrative
The traditional four-year halving cycle theory was once the most reliable macro framework in the crypto space. This theory posits that halving mechanically reduces new supply, weak miners exit, reducing selling pressure, ultimately driving prices up, repeating approximately every four years.
However, data from 2025 suggests that this cycle may have become ineffective.
● The key change is that the impact of supply shocks has significantly weakened. After the 2024 halving, Bitcoin's daily issuance was only about 450 coins, valued at approximately $40 million at that time. In contrast, ETF inflows/outflows typically exceed $1 billion to $3 billion within a single week.
● Institutional purchases have far exceeded miner output. Data shows that institutions accumulated approximately 944,330 Bitcoins in 2025, while miners only produced 127,622 new coins this year, making institutional purchases 7.4 times the new coin supply.
● This structural shift means that the dominant force in the Bitcoin market has shifted from miner economics and retail FOMO to ETF cost basis psychology and fund manager performance pressure.
4. New Driving Logic: The Formation Mechanism of Institutional Cycles
● The Bitcoin market is forming a new two-year institutional cycle, driven by ETF cost basis and fund performance evaluation mechanisms. The average cost basis for U.S. spot ETF holders is currently about $84,000, which has become the most important price anchor in the Bitcoin market.
● Professional fund evaluations are based on a 1-2 year time frame, with fees and performance bonuses settled on December 31. This creates a strong behavioral anchor: as the year-end approaches and managers lack sufficient "locked-in" profits and losses as a buffer, they tend to sell their riskiest positions.
● This mechanism leads to a typical behavioral pattern: the first year is a period of accumulation and price increase, with new funds flowing into ETFs, leading prices to outpace the cost basis; the second year is a period of distribution and reset, with performance pressure driving profit-taking, and prices correcting until a new, higher cost basis is established.
5. Liquidity Dilemma: Repricing of Macroeconomic Factors
● In addition to changes in market structure, the macro liquidity environment has also significantly impacted Bitcoin prices. In 2025, the true "market maker" for Bitcoin is not institutions or whales, but the Federal Reserve. The market widely expects the Fed to gradually begin a rate-cutting cycle from the second half of 2024 to early 2025, which was a key driver of the previous rally.
● However, a recent series of economic data and official statements have led to a repricing of this expectation. While U.S. employment and inflation have slowed, they have not reached levels that would support aggressive easing; some officials have even signaled "cautious rate cuts."
● The cooling of rate cut expectations directly reduces the present value of future cash flows, thereby compressing the valuations of risk assets, with high-volatility sectors, including Bitcoin, being the most affected.
6. Market Structure: Redistribution of Chips and Emotional Freezing Point
● On-chain data from the Bitcoin market at the end of 2025 reveals deeper structural changes. The market is not experiencing a complete withdrawal but rather a rapid redistribution of chips—from short-term, emotional funds to entities with longer patience and greater risk tolerance.
● Medium-sized whales holding 10-1,000 BTC have consistently become net sellers in recent weeks, clearly cashing out profits as early players. Meanwhile, super whales holding over 10,000 BTC have been increasing their positions, with some long-term strategic entities buying against the trend during the downturn.
● Retail behavior is also showing differentiation: some of the most emotional novice users may panic and cut their positions, while another group of more experienced long-term retail investors is seizing opportunities. This combination means that the selling pressure in the market mainly comes from weaker hands, while chips are concentrating in stronger hands.
7. Technical Signals: The Game of Key Price Levels
From a technical analysis perspective, Bitcoin is at a critical crossroads at the end of 2025. Analysts unanimously agree: if Bitcoin fails to maintain the $92,000 level, the bull market rebound may be declared over.
That level acts like a bottleneck: either it breaks through and drives the entire crypto market upward, or it falls and returns to test the lows.
● Technical charts indicate that Bitcoin is currently forming a rising wedge pattern, a bearish formation that appears after a downtrend. If the price breaks below this pattern, it may retest the November low of $80,540, and further declines could test the intra-year low of around $74,500 in 2025.
● Data from the derivatives market is also crucial: as of the end of November, a large number of open contracts were concentrated on $85,000 put options and $200,000 call options. This extreme positioning suggests a significant divergence in market expectations for future direction.
8. The Spillover Effect of the AI Bubble
● Another important feature of the Bitcoin market in 2025 is the transmission of external risks. Artificial Intelligence (AI) has overwhelmingly become the core force in pricing global risk assets, with its volatility directly impacting the Bitcoin market through risk budgets and liquidity conditions.
● A deeper influence comes from the competition of narrative systems. The grand framework of the AI narrative directly suppresses the narrative space of the crypto industry, making it difficult for the crypto sector to regain valuation premiums even when on-chain data is healthy and the developer ecosystem is active.
● As the AI bubble enters an adjustment phase, the fate of crypto assets may face a decisive opportunity, as AI will re-release liquidity, risk appetite, and resources.
The average cost basis for Bitcoin ETF holders has replaced miner output, becoming the new price anchor. The year-end performance pressure on professional fund managers and the calendar cycle is shaping Bitcoin's price rhythm every two years rather than every four years.
As the market shifts from mechanical selling by miners to spreadsheet-driven actions by fund managers, the key to predicting Bitcoin prices is no longer calculating halving dates but tracking the tides of global liquidity and the red and black numbers on institutional profit and loss statements. The collective failure of Bitcoin predictions in 2025 is essentially a collective belated realization of this profound transformation.
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