Bitcoin Core Development Activity Sees Significant Growth in 2025, Reversing Multi-Year Decline Trend

Bitcoin closed 2025 with a price lower than it began, marking its first annual loss since 2022. After reaching a record high above $126,000 in October, the cryptocurrency faced a sharp decline following Trump's tariff announcements and export controls on Chinese imports. This decline triggered over $19 billion in liquidations across leveraged positions, the largest in crypto history.

The year saw growing correlations between Bitcoin and traditional financial assets, especially U.S. equities. Analysts noted that as traditional investors moved into crypto, Bitcoin increasingly mirrored equity market sentiment, especially during periods of regulatory and macroeconomic uncertainty.

In the U.S., the crypto industry achieved major regulatory progress under the Trump administration. The SEC dismissed several Biden-era lawsuits, and new federal rules for dollar-pegged tokens were passed. However, long-term structural reforms remain pending, leaving regulatory uncertainty for the sector.

The Bybit hack in February 2025 exposed critical weaknesses in custody systems, even those using cold storage and multisignature wallets according to reports. The $1.4 billion breach led to increased scrutiny of custody security models. The Financial Action Task Force called for tighter oversight and emphasized the systemic risks posed by unsecured transactions and cross-chain movements.

The hack also prompted global regulators to tighten licensing requirements. Singapore enforced stricter rules for crypto firms, while other countries like Thailand and the Philippines followed similar enforcement campaigns. The incident reshaped how the industry viewed custody risk, shifting focus from cryptographic security to transaction approval and signer integrity.

Crypto wallet usage evolved significantly in 2025, shifting from a trading-centric model to broader financial utility. Bitget Wallet data showed a rise in onchain spending, stablecoin-based earnings, and decentralized derivatives trading. The expansion of real-world applications, such as card-based spending and integrated bank transfers, reflected growing mainstream adoption according to industry analysis.

Why Did Bitcoin See Its First Annual Loss Since 2022?

Bitcoin's 2025 performance was shaped by macroeconomic trends and regulatory dynamics. Early in the year, the cryptocurrency surged following the election of President Donald Trump, who positioned himself as crypto-friendly. However, policy shifts, including tariff announcements and export controls, led to sharp price corrections.

Analysts attributed the year-end decline to fading momentum and the strengthening correlation with traditional risk assets according to research. Bitcoin's movements increasingly aligned with equity markets, particularly during periods of macroeconomic uncertainty.

The year also highlighted structural challenges in the crypto market. While institutional adoption rose, regulatory delays and volatility dampened long-term investor confidence. Some executives expressed concern that unresolved structural issues, such as SEC rules for market structure, could hinder future growth.

How Did the Bybit Hack Impact Global Regulatory and Security Standards?

The Bybit hack forced a reevaluation of custody security models. Previously, cold storage and multisignature wallets were considered secure; the breach demonstrated that vulnerabilities could exist in transaction approval flows and signer environments.

In response, exchanges and infrastructure providers reinforced transaction visibility and approval mechanisms. The hack also spurred the FATF to urge global regulators to address risks in cross-chain activity and stablecoins.

The incident elevated the profile of North Korea-linked hacking groups, such as Lazarus. Experts and regulators linked the breach to state-sponsored actors, highlighting the role of geopolitical threats in crypto security.

Regulatory enforcement also intensified in 2025. Countries like Singapore and Thailand introduced stricter licensing regimes, pushing unlicensed firms out of the market. This tightening reflected a broader global push for crypto compliance and transparency.

What Are Analysts Watching for 2026 Market Developments?

As 2026 begins, Bitcoin remains in a compressed trading range around $88,890. Analysts are watching for a breakout in either direction, particularly as the RSI and Bollinger Band indicators suggest potential volatility.

The start of 2026 saw Bitcoin briefly pushing above $90,000, signaling a potential shift in market sentiment according to traders. Traders noted that the year-end selloffs during U.S. trading hours in 2025 were atypical, and early signs of a reversal could signal a stronger bull market ahead according to market analysis.

Regulatory developments will also be key. The SEC's new generic listing standards may lead to a surge in crypto ETPs, though many may struggle with long-term adoption. Analysts predict over 100 new ETFs in 2026, but only a fraction may survive into 2027.

Market participants are also monitoring macroeconomic trends, including U.S. debt dynamics and potential monetary policy shifts. Some believe Bitcoin could benefit from looser monetary conditions and increased capital flows into risk assets according to financial analysis.

The growth of real-world assets (RWAs) in DeFi also continues to gain traction. Tokenized Treasuries and commodities now hold over $19 billion in distributed asset value, with RWAs surpassing decentralized exchanges in total value locked.

With Bitcoin core development activity seeing a resurgence, the stage is set for 2026 to bring more clarity on crypto's evolving role in global finance according to industry observers.