Bitcoin entered 2025 with high expectations. Analysts predicted aggressive growth due to spot ETF demand, institutional buying and post-halving cycles. Instead, Bitcoin is stumbling. Recent data shows that Bitcoin, the world’s best-known digital asset, is performing worse than U.S. Treasuries, considered the safest investment. For a market built on high-risk, high-return momentum, this shift is a frowning one.
U.S. government bonds are backed by the U.S. government and are among the lowest risk assets. The fact that Bitcoin is lagging behind U.S. Treasuries is a sign that investors are withdrawing from risk, choosing safety over potential returns. Bitcoin is currently up about 8% this year, an unusually low rate for an asset known for explosive growth during bull cycles.
When the number of people falls below 100,000, sentiment turns negative.
For most of the year, Bitcoin comfortably outperformed the Treasury. That confidence evaporated earlier this week when Bitcoin fell and briefly fell below the 100,000 mark. The sudden drop wiped out a significant portion of the year’s profits and changed the tone of the market from hopeful to defensive.
Investors are now questioning whether Bitcoin can maintain its momentum. With increased volatility and reduced liquidity, traders are choosing to exit rather than double down.
Retail traders reach emotional breaking point
Matt Hogan, Bitwise’s chief investment officer, described the current mood as “extreme despair.” Retail traders are exhausted by repeated declines and waning confidence. Many people entered the market expecting high returns after ETF approval. Instead, the market is facing selling pressure and significant volatility.
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But Hogan remains optimistic. He does not think this marks the beginning of another prolonged crypto winter. Rather, he believes panic is a natural reaction during transitions in market cycles. Historically, periods of extreme fear have often preceded strong recoveries in cryptocurrencies.
ETFs provide important support criteria
A whopping $578 million was lost from Bitcoin ETFs on Tuesday. When financial institutions raise capital, the market reacts quickly. Interesting details have emerged from on-chain data. The average cost basis of the Spot Bitcoin ETF is near 89,600. This level is becoming a line in the sand. If Bitcoin rises above that, institutional buyers can continue to profit, reducing the risk of further decline.
Bitcoin is currently battling more than just price volatility. The company is battling changes in investor sentiment. U.S. Treasuries are winning the confidence game, and it will take a strong rebound in Bitcoin to lure investors back into risk.
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FAQ
Bitcoin has been falling amid high volatility and profit-taking pressure as investors move away from risky assets and toward safer options such as U.S. Treasuries.
Many analysts see this as a short-term correction. Historically, periods of fear like this often lead to periods of strong recovery in the cryptocurrency market.
A potential surge could see Bitcoin (BTC) price end the month at a high of $110,000.
According to Coinpedia’s BTC price forecast, if the bullish trend continues, Bitcoin price could peak at $168,000 this year.
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