Source: CryptoNewsNet Original Title: Bitcoin 2025: The great rewiring of global finance Original Link:

2025 Market Transformation

2025 delivered a brutal lesson in market structure for Bitcoin. The year began with political momentum and drifted into a summer of aggressive policy signals. Yet, it snapped into one of the sharpest boom-to-bust sequences in the asset’s history.

By December, the price had round-tripped, leaving the asset flat for the year. But the flat chart masked a violent transformation underneath. While Wall Street banks finally opened their doors and ETFs vacuumed up record capital, the network’s physical infrastructure faced a solvency crisis.

Bitcoin Reserve Race

Government policy shifted decisively. On March 6, the White House signed Executive Order 14233, formally establishing a Strategic Bitcoin Reserve (SBR). The order consolidated forfeited federal bitcoin holdings into a dedicated US Digital Asset Stockpile, ending the era of sporadic auctions by the US Marshals. A week later, lawmakers introduced the BITCOIN Act of 2025 to codify this framework.

This legislation transformed the US government from a net seller into a strategic holder, signaling to global sovereigns that Bitcoin is a recognized reserve asset.

Following this lead, states like Texas and Pennsylvania launched similar initiatives. Internationally, France, Germany, the Czech Republic, and Poland began exploring sovereign accumulation.

In the corporate sector, the “Bitcoin Treasury” trend accelerated. Over 100 public companies now hold more than 1 million BTC on their balance sheets. Industry experts explained that these entities embraced BTC because it “is a superior reserve asset to gold.”

Bitcoin is digital. Bitcoin is fully auditable in real time, and can be transferred instantly. Bitcoin has an absolute fixed supply. Gold’s supply will continue to expand, forever, from ongoing mining.

The Regulatory Green Light

Another major milestone that defined the year was the traditional financial regulatory environment that shifted to accommodate Bitcoin.

The US Securities and Exchange Commission (SEC) and its sister financial organizations, such as the Commodity Futures Trading Commission (CFTC), made significant regulatory progress that enshrined Bitcoin into the traditional financial system.

The CFTC approved Bitcoin as a valid margin in regulated derivatives markets, and the US Federal Housing also recognized the top crypto as an asset for mortgage qualification in the United States.

However, the most significant changes came from the banking regulators. Earlier this month, the Office of the Comptroller of the Currency (OCC) issued Interpretative Letter 1188. This document clarified that national banks can execute “riskless principal” crypto transactions.

Previously, banks hesitated to broker trades because they did not want to hold volatile assets on their balance sheets. A “riskless principal” trade solves this. It allows a bank to buy an asset from a seller and resell it to a buyer immediately. The bank facilitates liquidity but never holds market risk.

This letter, combined with conditional charter approvals for firms like BitGo and Fidelity Digital Assets, effectively integrated crypto into the US banking stack.

TradFi Opens the Gates

Due to these regulatory milestones, banks that hitherto treated Bitcoin as a reputational risk changed their stance. In 2025, they began fighting for market share.

60% of the top 25 US banks now pursue strategies to sell, safeguard, or advise on Bitcoin. Major financial institutions like PNC Bank, Morgan Stanley, JPMorgan, and others opened their operations to enable Bitcoin trading and custody for interested clients.

Bitcoin analyst Joe Consorti argued that BTC had become “too big for Wall Street to ignore.”

Bitcoin ETFs

Away from the banks’ embrace of Bitcoin, the Bitcoin exchange-traded fund market also provided strong performance for industry players this year.

A major asset management company’s Bitcoin Trust (IBIT) dominated the ETF landscape. This year, IBIT attracted over $25 billion in inflows, ranking it sixth among all US ETFs.

Crucially, investors used Bitcoin differently from gold. While traditional gold ETFs saw inflows as gold hit record highs, Bitcoin ETF inflows persisted even as BTC’s price stagnated.

IBIT is the only ETF on the 2025 Flow Leaderboard with a negative return for the year…That’s a really good sign long term. If you can do $25 billion in bad year imagine the flow potential in good year.

Market analysts explained that investors treated Bitcoin as a structural accumulation play rather than a momentum trade.

Meanwhile, other positive developments within the ETF complex saw the US SEC approve “in-kind” creations and redemptions for spot ETFs. This technical change enabled Authorized Participants (APs) to swap actual BTC for ETF shares, rather than first converting to cash. The financial regulator also allowed options on major Bitcoin ETFs to go live, providing hedgers and basis traders with necessary tools to manage risk and completing the institutional derivatives stack.

Bitcoin’s Price Boom and Bust

Unsurprisingly, BTC’s price action followed its own volatile script. In early October, Bitcoin broke resistance to set a new all-time high above $125,000.

While the government and ETFs bought, long-term holders sold. On-chain data showed that wallets holding Bitcoin for 155 days or more contributed heavily to the October rally. This distribution, combined with macro-deleveraging, drove prices back under $90,000, which represented an over 30% correction.

Meanwhile, global macroeconomic conditions complicated the picture. The US economy saw significant Federal Reserve rates cuts this year, with some arguing that these moves were positive for BTC price performance. However, central banks in other regions simultaneously tightened policy, which tightened global liquidity and squeezed speculative carry trades.

Still, despite these market conditions, Bitcoin advocates believe the top crypto would shine.

Bitcoin can be understood as a global “savings reservoir” for excess capital: when interest rates are low, liquidity is abundant, and high expected ROIC real investments are scarce, savings migrate into Bitcoin because it is a finite scarcity, a global digital open source network with a fixed 21 million supply.

BTC Miners and AI

While Wall Street integrated Bitcoin, the miners securing the network faced a crisis.

Following the October peak, BTC’s hashrate collapsed from a peak of 1.3 zetahash per second (zh/s) to 852 EH/S recently. It has recovered to 1.09 zh/s as of press time.

Hashrate is the lifeblood of Bitcoin security, which is used to drive network trust. The higher the hashrate, the harder it is for any attacker to rewrite Bitcoin’s ledger.

As BTC’s price corrected below $90,000, older machines became a liability to Bitcoin miners. This is because the total cost to produce 1 BTC (including depreciation) for the average listed miner hovers near $137,800. With spot prices trading at a $47,000 discount to production cost, margins evaporated.

To survive, miners pivoted to Artificial Intelligence (AI) and High-Performance Computing (HPC). Seven of the top ten miners now report revenue from AI contracts.

Google emerged as a key financier in this shift. Rather than acquiring mining firms outright, Google provided credit support to help miners upgrade their infrastructure for AI workloads.

This transition signals a permanent change in the industry: miners are evolving into hybrid energy-compute centers to hedge against Bitcoin volatility.

Past Ghosts

Despite all of the institutional progress and positives of the past year, psychological fears remained.

Mt. Gox: The trustee extended the repayment deadline to October 2026. However, a sudden transfer of ~10,600 BTC from estate wallets in November triggered an algorithmic sell-off, proving that “zombie supply” still dictates short-term sentiment.

The Quantum Threat: Over the past year, the Bitcoin development community accelerated discussions about how to secure the network against future quantum computing attacks. While many argue that the fears are still years away, worries about the threat remain dominant across broader industry discussions.

The Verdict

2025 was the year of integration. The “plumbing” is no longer theoretical. ETFs now function with in-kind efficiency, banks possess the regulatory clearance to trade, and the U.S. government formally holds the asset. However, the miner insolvency crisis and the long-term holder sell-off proved that structural adoption does not guarantee “up only” price action. Bitcoin is now fully exposed to the ruthless efficiency of macro markets.