Latest Bitcoin Situation Analysis (as of October 2025)

1. Price and Market Performance

Bitcoin has recently displayed a pattern of "rising after a pullback followed by consolidation." In mid-September, its price broke through 120,000 USD, setting a new historical high, and then on September 26, it fell below 110,000 USD due to factors such as cooling institutional fund inflows, triggering nearly 290,000 liquidations, with a total liquidation amount exceeding 882 million USD. Entering October, the price fluctuated around the 110,000-120,000 USD range, with market bullish and bearish sentiments changing dynamically with news developments.

From the perspective of institutional expectations, mainstream institutions generally hold a bullish stance, but there are differences in expectations: Standard Chartered predicts that Bitcoin will reach $200,000 by the end of 2025; Citigroup has a baseline expectation of $135,000, which could rise to $199,000 in an optimistic scenario or drop to $64,000 in a pessimistic scenario; CoinShares has locked in the price range for the year between $80,000 and $150,000.

2. Core Driving Factors

1. Institutional and Policy Level

Institutional funds continue to flow in as a core driving force. By the second quarter of 2025, the assets under management of the U.S. spot Bitcoin ETF have exceeded $65 billion, with BlackRock's iShares Bitcoin Trust (IBIT) alone reaching $18 billion in the first quarter of that year. The expected crypto-friendly policy of U.S. President-elect Trump has significantly boosted market sentiment, as his promised policy to promote Bitcoin allocation in 401(k) retirement accounts is expected to unlock $8.9 trillion in retirement funds into the market. At the same time, companies like MicroStrategy and Tesla, as well as sovereign wealth funds from Singapore and Canada, continue to increase their holdings, with corporate holdings now exceeding 1.3 million coins.

2. Macroeconomic Background

Global monetary expansion and concerns about the credit of the US dollar have become significant catalysts. The broad money supply (M2) of central banks such as the Federal Reserve is at a historic high, combined with the over $2 trillion annual federal budget deficit in the United States, which weakens confidence in fiat currency and drives investors to allocate Bitcoin as a safe-haven asset. Data shows that 59% of institutional investors have allocated at least 10% of their investment portfolios to Bitcoin, with family offices allocating as much as 25%.

3. Technology and Community Dynamics

1. Controversy over Core Version Updates

The Bitcoin Core v30 version will be officially launched in October 2025, and its core change "increasing the OP_RETURN limit to accommodate larger non-payment data" has sparked intense debate within the community. Supporters argue that this provides a safer way to attach messages, proofs, and other data without clogging the system; critics, however, worry it could lead to spam and illegal content, steering Bitcoin away from its core purpose as a medium of exchange towards a data storage network. This controversy can be traced back to 2010, and issues such as the legal responsibilities of node operators remain to be clarified.

2. Potential Technology Upgrade

The community is advancing the first user-led soft fork upgrade in four years, focusing on the BIP-119 (CTV) and BIP-348 (CSFS) proposals, aimed at introducing a "contract" function to enhance transaction security and flexibility, supporting scenarios such as batch payments and decentralized exchanges. This upgrade is driven by grassroots communities and is seen as a sign of the Bitcoin governance model's shift towards open democracy, but it also faces skepticism regarding code complexity and substitutability risks.

4. Risks and Uncertainties

• Regulatory policy risk: Although the current expectations for U.S. policy are relatively friendly, the regulatory framework has not yet been finalized. If Trump's cryptocurrency policies fail to materialize, it could trigger significant market adjustments. At the same time, the illegal data storage issues brought by OP_RETURN expansion may trigger new regulatory interventions.

• Market cyclical fluctuations: The cyclical characteristics of cryptocurrencies are significant, with historical data showing that Bitcoin often experiences sharp corrections after significant increases. Recent price fluctuations and liquidation events have highlighted short-term volatility risks.

• Technical implementation risk: The upcoming soft fork upgrade may face compatibility issues between old and new nodes, as well as new security vulnerability risks, which need to be mitigated through strict testing and verification to avoid system stability risks.