(Bloomberg) — The asset once expected to “go to the moon” is struggling to keep pace with Treasuries. Bitcoin has fallen nearly 30% from its 2025 peak, lagging behind everything from tech stocks to T-bills.
Once promoted as a high-growth play, an inflation hedge, and a portfolio diversifier, the world’s largest cryptocurrency now faces the prospect of ending the year in the red – without fulfilling any of those roles.
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Gold – often dismissed by bitcoin believers as outdated – is easily outperforming the token, which the crypto faithful have dubbed digital gold. So are long-term bonds and the Nasdaq, in a year defined by falling interest rates and shrinking risk appetite.
The underperformance is even starker against benchmarks Bitcoin was supposed to outclass. The MSCI Emerging Markets Index is up sharply this year, and even the US Utilities Index – a byword for low-volatility, low-growth stability – has outpaced Bitcoin’s slide.on Tuesday, Bitcoin briefly dipped below $90,000 – roughly the average entry price of all ETF inflows since their launch – meaning the typical ETF investor was, for a while at least, underwater. The largest cryptocurrency climbed off the seven-month low to trade about 1.5% higher to $93,241 as of 11:46 a.m. in New York.
For many,this was supposed to be crypto’s breakout year.A pro-crypto White House, new rules allowing launch of exchange-traded funds across tokens, and a wave of institutional inflows had seemingly secured digital assets a place in mainstream finance. Instead, for investors who bought near the highs, Bitcoin’s 2025 story feels familiar: a burst of euphoria, a crash, and growing disbelief.
Bitcoin Stabilizes Around $90,000 Amidst Defensive Trading and Diminished Record High Expectations
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Bitcoin is currently attempting to solidify its position around the $90,000 mark, shifting from a source of market stress to a potential indicator of stabilization, according to recent analysis. While the cryptocurrency remains impressive, traders are adopting a defensive posture, increasing demand for downside protection. This comes as expectations for a return to the all-time high above $126,000 by the end of the year have significantly diminished.
Defensive Positioning and Options Data
Demand for options contracts protecting against further declines around the $85,000 and $80,000 levels has surged, signaling increased investor caution. Data from Deribit, a leading cryptocurrency options exchange owned by Coinbase, indicates that the probability of Bitcoin revisiting its peak above $126,000 before year-end is now less than 5%. https://www.deribit.com/
This shift in sentiment suggests that, for now, investors are prioritizing risk management over aggressive bullish bets. The increased demand for protective options reflects a growing concern about potential further corrections in the short term.
Bloomberg Strategist Viewpoint
Brendan Fagan, FX Strategist at Bloomberg Markets Live, believes Bitcoin’s current behavior could be a positive sign. He suggests that if the $90,000 level holds, it could indicate a turning point where digital assets begin to lead risk sentiment higher, rather than exacerbate market downturns. https://www.bloomberg.com/markets/live
This perspective highlights a potential change in Bitcoin’s role within the broader financial landscape. Historically, Bitcoin has often been viewed as a risk-on asset, prone to sharp declines during periods of market uncertainty. A sustained move above $90,000 could signal a maturing market with increased institutional participation and a more stable outlook.
Key Takeaways
* Defensive Trading: Investors are increasingly seeking downside protection, indicating a cautious outlook.
* Diminished Record High Expectations: The probability of Bitcoin reaching $126,000 by year-end is now below 5%.
* Potential Stabilization: Holding above $90,000 could signal a shift in Bitcoin’s role, potentially leading risk sentiment.
* Options Market Signals: Increased demand for put options around $85,000 and $80,000 reflects investor concern about further price declines.
Looking Ahead
The coming weeks will be crucial in determining Bitcoin’s trajectory. The ability to maintain support around $90,000 will be a key indicator of its strength and potential to resume its upward trend. Continued monitoring of options market data and broader macroeconomic conditions will be essential for understanding the evolving dynamics of the cryptocurrency market.
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