2025: The Darkest Year for the Crypto Market, But Also the Dawn of the Institutional Era

Author: Jocy, Founding Partner, IOSG Ventures; Source: X, @jocyiosg

A 2025 crypto market recap reveals a paradigm shift from retail speculation to institutional allocation. Core data shows institutional holdings at 24%, while retail investors exited at 66%—the 2025 crypto market saw a complete turnover. Forget the four-year cycle; the institutional era of the crypto market has new rules! Let me use data and logic to dissect the truth behind this "worst year."

1. First, let's look at the surface data—asset performance in 2025:

Traditional Assets:

• Silver +130%

• Gold +66%

• Copper +34%

• Nasdaq +20.7%

• S&P 500 +16.2%

10. The policy environment is the third dimension.

The Trump administration's 2025 initiatives include:

• The Crypto Executive Order (signed on January 23);

• The Strategic Bitcoin Reserve (~200,000 BTC);

• The GENIUS Act stablecoin regulatory framework;

• A change in SEC chairman (Atkins takes office).

• A change in SEC chairman (Atkins takes office).

Pending:

• Market Structure Act (77% probability of passing before 2027);

• Stablecoins buying short-term US Treasury bonds, with a tenfold increase in scale over the next three years.

Potential Impact of the 2026 Midterm Elections

435 House seats and 33 Senate seats will be up for re-election in 2026. 274 "pro-crypto" candidates were elected in 2024, but banking lobbying groups plan to spend over $100 million to counter the impact of crypto donations. Polls show that 64% of crypto investors consider a candidate's crypto stance "very important."

Unprecedented policy friendliness.

11. But there is a time window issue here:

There is a midterm election in November 2026.

Historical pattern: "Election years see policy implementation first" → Intensive policy implementation in the first half of the year → Awaiting election results in the second half of the year → Increased volatility. Therefore, the investment logic should be: First half of 2026 = Policy honeymoon period + Institutional allocation = Bullish outlook; Second half of 2026 = Political uncertainty = Increased volatility. 12. Now, returning to the initial question: Why is crypto still bullish despite being the "worst performing" market in 2025? Because the market is undergoing a "handover": list-paddingleft-2">

From retail investors to institutional investors

From speculative chips to allocated chips

From short-term speculation to long-term holding

This process is inevitably accompanied by price adjustments and fluctuations.

13. How do institutions view target prices? VanEck: $180,000 Standard Chartered: $175,000-$250,000 Tom Lee: $150,000 Grayscale: New high in the first half of 2026 It's not blind optimism, but based on: Continued inflows into ETFs. left;">Listed company treasury DAT increases holdings (134 companies globally hold 1.686 million BTC)

Unprecedented policy window in the US

Institutional allocation has just begun

14. Of course, risks still exist:

• Macro: Fed policy, strong dollar

• Regulation: Market structure bill may be delayed

• Market: LTH may continue to be sold

• Politics: Uncertainty of midterm election results

15. Final Investment Logic:

• Short-term (3-6 months): $87K-$95K range fluctuation, institutions continue to build positions

• Mid-term (first half of 2026): Policy + institutional dual drivers, target $120K-$150K

• Long-term (second half of 2026): Increased volatility, watch election results and policy continuity

Core Judgment:

This is not the top of the cycle, but the beginning of a new cycle.

• 16. Why am I so confident?

  Because history tells us:

  • 2013 saw retail investors dominate, reaching a peak of $1,100

  • 2017 witnessed the ICO frenzy, reaching a peak of $20,000

  • 2021 saw DeFi + NFT, reaching a peak of $69,000

  • 2025 saw institutional entry, currently at $87,000

  Each cycle sees more professional participants, larger amounts of capital, and more complete infrastructure.

17. The "worst performance" of 2025 is essentially a transition period from the old world (retail speculation) to the new world (institutional allocation). Price is the price of this transition, but the direction is already determined. When BlackRock, Fidelity, and sovereign wealth funds were building positions on the left side, retail investors were still wondering "Will it fall further?" This is the cognitive gap. 18. In conclusion: 2025 marks an acceleration of the institutionalization process in the crypto market. Despite a negative annual return for BTC, ETF investors demonstrated strong "HODL" resilience. 2025 appears to be the worst year for crypto, but it actually represents: the largest supply turnover, the strongest institutional allocation intentions, the clearest policy support, and the most extensive infrastructure improvements. Prices were -5%, but ETFs saw $25 billion in inflows, which in itself is the biggest signal. We are optimistic about the first half of 2026. 19. As long-term practitioners and investors, our job is not to predict short-term prices, but to identify structural trends. Key developments to watch in 2026 include: progress on market structure legislation, the possibility of expanding the strategic Bitcoin reserve, and policy continuity after the midterm elections. In the long term, the improvement of ETF infrastructure and regulatory clarity lay the foundation for the next round of growth. When market structure fundamentally changes, old valuation logic will become invalid, and new pricing power will be rebuilt. Stay rational and patient.