Bitcoin Faces Headwinds in Late 2025: Analysis of Key Factors

Underperformance Against Market Expectations

Bitcoin, the world's largest cryptocurrency, has failed to deliver the typical year-end rally, instead experiencing a significant 30% decline from its October peak. This underperformance is particularly notable given the favorable macroeconomic environment characterized by global interest rate cuts and increased liquidity - conditions that typically boost risky assets.

Four Key Factors Driving Bitcoin's Weakness

Analysts David Brickell and Chris Mills of London Crypto Club highlight four primary reasons behind Bitcoin's current weakness:

1. Macroeconomic Factors: Despite global monetary easing, Bitcoin hasn't benefited as expected
2. Institutional Adoption Trends: Changes in institutional investment patterns have affected demand
3. US Crypto Policy Developments: Regulatory advancements haven't translated to price support
4. Relative Performance: Bitcoin's underperformance compared to gold and other assets

Market Comparison and Future Prospects

The cryptocurrency has underperformed not just in absolute terms but also relative to other assets. While gold has shown strong gains, Bitcoin has declined about 5% year-on-year against the US dollar and underperformed gold by approximately 40%. This relative underperformance raises questions about Bitcoin's role as a store of value and hedge against economic uncertainty.

Conclusion

The current weakness in Bitcoin's price reflects a complex interplay of macroeconomic factors, regulatory developments, and market dynamics. As the cryptocurrency market looks toward 2026, investors will be closely watching how these factors evolve and whether Bitcoin can recover its momentum.