CRYPTO GETS A REALITY CHECK

2025 WAS A DEFINING YEAR FOR CRYPTO, MARKED BY RECORD HIGHS, BRUTAL DRAW-DOWNS, AND A GROWING INSTITUTIONAL PRESENCE.

- BY MANOJ SHARMA

CRYPTOCURRENCIES HAD a rollercoaster ride in 2025. True to its volatile nature, the crypto market cap went from $3.37 trillion on December 31, 2024, to a high of $4.20 trillion in October and a down-in-the-dumps level of $2.96 trillion on December 17, 2025.

This is in sharp contrast to key stock market indices such as the S&P 500 (up 16.34% in the past year), the Nasdaq (up 20.30% for the year), and, for that matter, India's equity market benchmark, the BSE Sensex (up 8.61% year-to-date, as of December 17, 2025). Gold, one of the world's most stable assets, vastly outperformed the so-called digital gold, Bitcoin, rising 55% year-to-date in 2025 after hitting a record high of $4,370 an ounce in October. In terms of total asset value, gold is still 11x Bitcoin.

Bitcoin (BTC), the first cryptocurrency and the sector leader with a 58.8% share, had one of its defining years. After Donald Trump, the most famous backer of cryptocurrency, became U.S. President on January 20, Bitcoin crossed $100,000, rising 9.43% in the first 20 days of 2025. In May, it hit a new high at $111,681.70, recording a 20% YTD growth. The next all-time highs came in July, August and October, with October 6's high reaching $126,080, a 33% YTD gain. Days later, BTC’s price sharply dropped to $113,236.42, dealing a massive blow to investors.

Then came the meltdown from October 10-11 to October 19, triggered by Trump’s threat to impose new trade tariffs on China. The shock waves erased around $19 billion in leveraged positions.

Ethereum (ETH), which has the second-largest share (12.1%) of the crypto market, has dipped by 20.62% in the past year. Since its September high of $4,946, ETH fell 37% to $3,109.07 on December 15. Its market capitalisation was down to $374.4 billion. Other top coins and altcoins were buffeted in the wake of BTC and ETH (see chart).

Had investors expected this across-the-board collapse?