2025 Cryptocurrency Market Review: Record Highs and Sharp Declines Coexist, Institutional Capital Drives Market Evolution

2025 Cryptocurrency Market: Record Highs Amid Sharp Declines—Kaiko Research’s Take on the Year of Bitcoin

Source: TokenPost Original Title: 2025년 암호화폐 시장, 사상 최고가 속 급락…카이코 리서치가 읽은 비트코인의 해 Original Link:

In 2025, the cryptocurrency market saw dramatic surges alongside unexpected declines. Bitcoin reached an all-time high, and major coins like XRP and Ethereum also staged successful rebounds, but the market simultaneously experienced historic liquidations and a contraction in liquidity.

Bitcoin Performance and Macro Environment

In 2025, Bitcoin started the year at $90,000-$100,000 and began to rise. After a brief drop following the announcement of trade policy in April, Bitcoin continued to climb, driven by a weaker US dollar, Federal Reserve rate cuts, and a global appetite for risk assets. In August, Bitcoin appreciated 26% against the US dollar and 10-19% against major fiat currencies such as the Chinese yuan and the euro. Market analysis shows that cryptocurrencies remain highly influenced by US policy, and US political uncertainty exerts direct downward pressure on Bitcoin prices.

Liquidity Improvement and Institutional Inflows

Overall liquidity improved in 2025, thanks to strong institutional demand and regulatory progress. Bitcoin market depth reached historic highs in the summer; despite relatively shallow spot trading volumes, liquidity continued to improve. Factors such as increased corporate crypto holdings and spot fund inflows drove Bitcoin purchases. Between May and August, 98 companies raised or announced fundraising totaling about $90 billion, providing substantial inflows into the crypto market. This institutional capital created a liquidity floor, helping prevent sharp market drops even during large-scale sell-offs.

Rebound of Major Coins

XRP hit a new 7-year high, reaching the $2-$3 range, marking a major upward phase. Ethereum, after years of decline, broke through its 2021 all-time high for the first time. These rebounds reflect both the intrinsic value growth of the respective projects and their close correlation with Bitcoin’s performance.

Market Risk Events

Following the October 10th trade policy announcement, the market saw a historic liquidation event. Bitcoin and major coins fell nearly 60% in a single day, with one leading exchange seeing tens of millions of dollars in long positions liquidated. The single-day liquidation totaled $2 billion, mostly from unprotected long positions. This highlights the risks of excessive leverage and market concentration, as well as the fragility of decentralized systems in protecting users.

Stablecoin Market Development

Competition between stablecoins and traditional assets entered a new stage. USDC trading volume surged ahead of its IPO, hitting a record $24 billion in April. This milestone benefited from a major exchange accounting for over 57% of USDC spot trading. Euro stablecoins (EURC, EURCV) also saw significant trading volume growth after the MiCA legislation, indicating that regulated stable assets could become key trading tools in the future.

Turning Point for the Derivatives Market

In 2025, the US approved the launch of perpetual futures, marking a major turning point for the derivatives market. Perpetual futures, which require no physical delivery and offer flexibility amid high volatility, became the dominant product, accounting for 68% of Bitcoin trading. Traditional financial institutions showed growing interest in this product, and US exchanges plan to introduce “continuous futures,” which will accelerate the expansion of the derivatives market.

Overall Assessment

2025 marked further evolution of the cryptocurrency market on multiple fronts: Bitcoin set new records, major coins rebounded, institutions entered, and liquidity structures shifted. At the same time, the market reaffirmed the ongoing risks of governance, vulnerability to external shocks, and the persistent dangers of excessive speculation.