Bitcoin Core Sees Developer Revival in 2025, Casa's Jameson Lopp Highlights Key Metrics

Bitcoin is on track to record its first annual loss since 2022, driven by macroeconomic pressures and shifting market sentiment in 2025. After hitting a record high in October 2025, the cryptocurrency fell sharply in late October following new tariff announcements by U.S. President Donald Trump. The market faced the largest liquidation event in crypto history, with over $19 billion in leveraged positions wiped out. Analysts attribute the growing correlation between bitcoin and traditional risk assets to increased participation from institutional and retail investors.

The crypto industry secured major regulatory victories in the first year of the Trump administration, including the dismissal of Biden-era lawsuits against major exchanges like Coinbase and Binance. A landmark law also established federal rules for dollar-pegged stablecoins. However, core legislative solutions addressing market structure and SEC rule adjustments remain pending.

The Bybit hack in 2025 brought heightened scrutiny to custody security and decentralized finance infrastructure. North Korean-backed hackers were linked to the breach, which shifted industry focus from cryptographic vulnerabilities to cross-chain automation and decentralized routing protocols. This event reshaped perspectives on the role of decentralized infrastructure in large-scale theft and money laundering.

Why Did This Happen?

Bitcoin's performance in 2025 was heavily influenced by U.S. macroeconomic developments and regulatory shifts. The election of a crypto-friendly president initially drove prices higher in early 2025. However, Trump's subsequent tariff policies triggered sharp sell-offs. Analysts say the correlation between bitcoin and traditional markets strengthened as more institutional investors and retail traders entered the crypto space.

Regulatory developments in the U.S. played a critical role in shaping the sector's trajectory. The swift dismissal of SEC lawsuits against major exchanges provided immediate relief for the industry. However, key legislation aimed at addressing long-standing issues remains unpassed, leaving uncertainty around market structure and enforcement.

How Did Markets Respond?

The Bybit hack highlighted vulnerabilities in custody and transaction oversight, prompting global regulators to call for stronger licensing and supervision. The incident underscored the growing risks associated with decentralized infrastructure and cross-chain movement of funds.

At the same time, real-world asset tokenization (RWAs) continued to gain traction, with total distributed asset value surpassing $19 billion in December 2025. Tokenized U.S. Treasurys accounted for the largest share of RWAs, driven by products from major institutions like BlackRock and Franklin Templeton.

Crypto wallet usage also shifted toward spending and asset management in 2025, with on-chain activity showing strong growth in payments, trading, and yield products. Bitget Wallet's data revealed a 28-fold increase in card-based spending and rising demand for stablecoin-based earning tools.

What Are Analysts Watching Next?

Bitcoin's performance in 2026 will depend on regulatory clarity, macroeconomic conditions, and institutional adoption trends. Analysts are monitoring potential changes in U.S. policy, particularly around SEC enforcement and cross-chain infrastructure.

The regulatory landscape in 2026 is expected to see continued focus on custody standards, decentralized finance protocols, and cross-border enforcement efforts. In addition, investors are watching for further developments in real-world asset tokenization and the role of stablecoins in global finance.

The tax environment for 2026 also introduces new considerations for crypto holders. The 2025 tax law added deductions for tips, overtime, and senior citizens, which may influence investment behavior. New rules around auto loan interest and standard deductions are also expected to impact portfolio strategies.

Investor sentiment remains mixed as the sector transitions from speculative trading to more institutional-grade applications. The growing adoption of decentralized infrastructure and tokenized assets signals a shift toward more mature market structures. However, macroeconomic risks and regulatory uncertainty continue to shape the near-term outlook.