Bitcoin May Signal Structural Issues in Crypto Despite 2025’s Regulatory Wins

• Structural breaks in crypto: High leverage and liquidations signal deeper market shifts amid historic debt levels.

• Positive drivers ignored: Pro-crypto policies, stablecoin growth, and tokenized assets haven’t lifted prices as expected.

• Market performance data: Total crypto cap down 32% from October peak of $4.4 trillion, ending 2025 lower than start.

Discover why crypto isn’t in a bull market in 2025 despite ETF approvals and institutional buys. Uncover structural issues, expert insights, and future outlook for investors navigating this downturn. Stay informed on crypto market trends.

Why Isn’t Crypto in a Bull Market?

Why crypto isn’t in a bull market remains a pressing question for investors in 2025, as the sector faces declining prices despite numerous tailwinds. Favorable factors like increased liquidity, a pro-crypto U.S. government stance, multiple exchange-traded fund (ETF) launches, and strong institutional buying have not translated into gains. Instead, the total market capitalization is poised to close the year lower, down nearly 13% from January 1 and over 32% from its early October all-time high of $4.4 trillion.

Crypto has tracked lower late this year despite pro-regulation shifts, ETF launches, and institutional buying, prompting analysts to question structural issues.

Analysts and investors are questioning why crypto isn’t in a bull market, given the amount of positive drivers that have taken place this year.

“At some point, we need to admit that something is structurally broken in the crypto market,” CNBC crypto contributor Ran Neuner said on Tuesday.

He said that multiple favorable factors should be leading to crypto markets performing better, such as increased liquidity, a pro-crypto US government, various exchange-traded fund launches, major institutional and crypto treasury company buying, and strong performance in traditional markets such as gold, silver, and major stock indexes.

However, crypto markets are on track to end the year lower than when they began, with the total market capitalization falling more than 32% from its all-time high of $4.4 trillion in early October and almost 13% down from Jan. 1. 

Crypto market cap is on track to end the year lower than it started. Source: CoinGecko

What Are the Two Possible Outcomes for Crypto Markets?

Ran Neuner outlined two potential paths forward for the crypto sector amid its underperformance. The first involves identifying and addressing what’s fundamentally broken, including pinpointing sources of persistent selling pressure that counteract bullish catalysts. The second scenario envisions a dramatic “catch-up trade,” where markets eventually align with underlying positives, as is common in financial cycles.

Economist Adam Kobeissi highlighted ongoing mass liquidations in recent months, attributing them to a structural shift driven by unprecedented leverage levels in the market. Data from on-chain analytics shows leverage ratios reaching historic highs, exacerbating volatility and forcing sales during downturns. PlanB, a prominent analyst known for stock-to-flow models, described the current dynamics as an “epic battle” where sellers— including those scarred by the 2021 crash, technical traders eyeing relative strength index signals, and cycle theorists anticipating a bear phase—deplete their resources before buyers regain control.

These insights underscore the tension between short-term pain and long-term potential, with leverage amplifying risks. For instance, Glassnode reports indicate that most crypto sectors have lagged Bitcoin’s performance over the past three months, concentrating value creation narrowly and limiting broader market recovery.

Frequently Asked Questions

Why Is Crypto Experiencing Structural Issues in 2025?

Crypto’s structural issues in 2025 stem from high leverage, unresolved selling from past cycles, and uneven adoption focused mainly on Bitcoin. Despite ETF inflows exceeding $10 billion and regulatory progress, liquidations have wiped out gains, with market cap dropping 13% year-to-date. Experts like Ran Neuner point to broken mechanics preventing alignment with traditional asset rallies.

Is the Crypto Bear Market Already Underway This Year?

Yes, the crypto bear market appears to have begun in late October 2025, as Bitcoin led declines among major risk assets amid economic slowdown signals. Retail engagement remains low this cycle, with gains confined to Bitcoin rather than altcoins or DeFi. According to 10x Research CEO Markus Thielen, this winter has arrived early, pricing in broader uncertainties without widespread participation.

Key Takeaways

• Structural Challenges Persist: High leverage and liquidations reveal deep market fractures, overriding positives like ETFs and policy shifts.
• Industry Fundamentals Hold Strong: Milestones including U.S. Bitcoin reserves and tokenized asset growth signal long-term durability despite price dips.
• Prepare for Volatility: Investors should monitor seller exhaustion and leverage unwind for potential catch-up rallies in 2026.

Conclusion

In 2025, why crypto isn’t in a bull market boils down to structural hurdles like excessive leverage and concentrated value in Bitcoin, even as regulatory wins and institutional inflows build a robust foundation. Experts from Pantera Capital, including Erik Lowe, emphasize this year’s unprecedented progress in stablecoins and real-world asset tokenization as caissons for future growth. As the market navigates this winter, forward-thinking investors can position for recovery by focusing on fundamentals and awaiting the depletion of bearish pressures.

Two Possible Outcomes for Crypto

Neuner said there were two possible outcomes for crypto: discovery of “what’s actually broken and who is selling” or the “mother of all catch-up trades because that’s how markets work.” 

Economist Adam Kobeissi said that “one day, we will look back at the last 2 months of seemingly daily mass crypto liquidations and what’s happening will be crystal clear:”

“Crypto is experiencing a structural shift amid historic levels of leverage.”

Related: Most crypto sectors lagged Bitcoin over past 3 months: Glassnode

Analyst “PlanB” called it an “epic battle until sellers are out of ammo,” explaining that selling pressure is still coming from “OGs traumatized by 2021,” technical investors looking at relative strength index, and those who believe in the four-year cycle and that a bear market is due. 

Crypto Winter Is Already Here

Meanwhile, some analysts are convinced that the bear market is already underway. 

“Bitcoin entered a bear market in late October 2025, becoming the first major risk asset to price in a slowing economy,” 10x Research CEO Markus Thielen told Cointelegraph. 

“Retail participation never meaningfully returned this cycle, and value creation remained narrowly concentrated in Bitcoin rather than broadening across risk assets. Winter isn’t approaching; it has already arrived.”

Things Aren’t That Bad, Really 

Despite the poor performance of spot markets, the industry’s fundamentals remain solid. 

“While prices may have fallen short of expectations, this year delivered more structural progress than any in crypto’s history,” Erik Lowe, head of content at blockchain venture firm Pantera, said in a report on Tuesday.

Like Neuner, he listed several milestone achievements for the industry this year, including a shift in staff and stance at US financial regulators, the establishment of a US strategic Bitcoin reserve and digital asset stockpile, and increases in stablecoin supplies and onchain value of tokenized real-world assets. 

“From that perspective, we believe there hasn’t been a more important year for the industry than 2025. This is the year we began laying the deep caissons to support durable, long-term growth.”

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