Bitcoin despite fluctuations in December, institutions show strong appetite for purchases

In the fourth quarter of 2025, Bitcoin faced a significant test – December declines reached nearly 9%, and market volatility hit the highest level since April. However, beneath these turbulences lies an intriguing story of structural transformation in the market.

Capital Flow Reverses: Institutions Buy When Others Sell

Analysis conducted by VanEck reveals deep divisions in the behaviors of different market participants. While investors in Bitcoin (ETF) exchange-traded products were withdrawing from the market, digital asset management firms did something entirely different – in December, they increased their holdings by 42,000 BTC, marking the largest monthly growth since July. This accumulation allowed them to surpass the symbolic threshold of 1 million BTC in wallets.

This is no coincidence. According to VanEck’s “ChainCheck” report, institutional players are ultimately taking the lead. Some asset management firms are even exploring new financing channels – issuing preferred shares instead of common – to raise capital for further BTC accumulation. This signals long-term commitment rather than short-term speculation.

On-Chain Data Show Evolution of Holders

Analysis of on-chain parameters provides further clues. Tokens held from 1 to 5 years show significant movement – likely due to profit-taking or portfolio rebalancing. In contrast, positions held for over 5 years remain practically “dormant,” suggesting that the oldest and most experienced holders still believe in Bitcoin’s fundamental value.

This means the market is naturally segregating: cyclical and short-term investors are gradually exiting positions, while long-term “diamond hands” hold firmly.

Mining Under Pressure – But History Suggests Growth

The situation for Bitcoin miners is becoming more complex. In December, the network’s hash rate dropped by 4% – the largest decline since April 2024. Production cuts in high-power regions, especially Xinjiang, under regulatory pressure, directly impacted this decrease. At the same time, miners’ profit margins are shrinking.

However, VanEck points to an interesting historical pattern: after each sustained decline in hash rate, Bitcoin typically experienced significant growth within 90 to 180 days. If this pattern repeats, it could be a positive signal for more optimistic investors.

The GEO Model Changes Market Health Perspective

Instead of focusing solely on price fluctuations, VanEck employs its proprietary GEO model assessing Bitcoin’s structural health across three dimensions: global liquidity, ecosystem leverage, and on-chain activity.

From this perspective, the picture becomes more nuanced. Although the growth of active on-chain addresses stagnates and transaction fees decline, improvements in market liquidity and increased institutional resources provide an important counterbalance to weaker signals. This suggests the market is not in poor condition – it is simply transforming.

Macroeconomic Context: Dollar Weakens, but Pressure Remains

The US dollar index recently hit its lowest level in nearly three months, traditionally supporting precious metals and digital assets. However, Bitcoin still faces pressure – which constitutes an interesting anomaly.

The landscape of financial ecosystems is changing. “Exchange of everything” platforms – integrating stocks, cryptocurrencies, and predictive markets using AI – are gaining popularity. Recently, Coinbase expanded its offerings to include stock trading, predictive markets, and futures contracts. This indicates that traditional brokers and crypto firms are competing for this growing market – which could ultimately strengthen Bitcoin’s liquidity and utility.

What to Expect in the New Year?

VanEck summarizes the current situation as an adjustment phase. Short- and medium-term speculation wanes, long-term positions stabilize, and institutional accumulation continues. Volatility remains a characteristic of Bitcoin – although over the past three years, BTC’s value has nearly tripled, changes have been more disciplined than in previous cycles.

The report suggests that the market is approaching a consolidation phase, which could lay solid foundations for potential growth in the first quarter of 2026. The current Bitcoin price stands at $93.01K with a 24-hour decline of -2.39%, but structural market updates may open new opportunities for investors looking beyond current price turbulence.