Bitcoin’s Wild Ride to Nowhere

Amongst the many stories leading financial headlines we follow, did you hear about the bitcoin bear market?^[i] The price of the world’s preeminent cryptocurrency has fallen sharply, down more than -28% from early October’s all-time high of $126,170 to $90,660 (£96,353 to £69,235) as of Wednesday—erasing all its gains this year.^[ii] Smaller cryptocurrencies have also been selling off.^[iii] In our view, bitcoin’s recent pullback offers a timely reminder of cryptocurrencies’ boom-and-bust nature, and investors benefit from questioning whether this speculative commodity makes sense in their portfolio.

The world’s first cryptocurrency has had quite the ride this year, getting off to a fast start with a 13.6% gain by the third week of January.^[iv] From that early 2025 high, bitcoin plummeted -28.1% through 8 April (the same day the global stock market correction, which is a short, sharp, sentiment-driven pullback of -10% to -20%, ended).^[v] Bitcoin then climbed throughout the spring and summer, with many crediting US President Donald Trump’s supposed crypto-friendly legislative agenda. It hit an all-time high of $126,170 on 6 October, bringing its return to 33.6% on the year … but then proceeded to surrender all those gains.^[vi] As of 19 November, bitcoin sits down -4.0% year to date.^[vii]

For visual learners, here is a chart.

Exhibit 1: Bitcoin’s Rollercoaster 2025

Source: FactSet, as of 19/11/2025. Bitcoin price, 31/12/2024 – 19/11/2025. Presented in US dollars. Currency fluctuations between the dollar and pound may result in higher or lower investment returns. Please see our Annex at the end for an extended, five-year version of this chart.

The reasons to be bullish on bitcoin and other cryptocurrencies seemingly evolve year to year based on our observations of financial headlines, from an inflation hedge (as bitcoin supply is sort of capped^[viii]) to a haven from dedollarisation (the supposed deliberate reduction of the use of US dollars in the global financial transactions) to the future of payments. In 2025, we found a lot of optimistic analyses tied to pro-crypto US legislation, especially after President Trump signed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in July. Despite the enthusiasm, the GENIUS Act’s broader implications look limited to us given its application to just one type of cryptocurrency (stablecoins, which are cryptocurrencies with a fixed value that are backed by a basket of securities).

Another take we saw: Bitcoin’s ascent this year has been part and parcel with a so-called everything bubble (in which investor enthusiasm drives prices up to unwarranted heights for assets across the board). After this year’s pullback ended on 8 April, global stocks rebounded and reached new highs by August, with lots of attention on the more speculative corners, including meme stocks and special-purpose acquisition companies (SPACs).^[ix] Gold surpassed $4,000 (roughly £3054) per ounce for the first time. But the big story, based on our review of financial headlines: surging artificial intelligence (AI) investment and its potential implications. We read about some excitement around the supposed huge productivity gains—but also some cautionary takes that the AI spending boom was unsustainable and wouldn’t deliver on its promises. Throw in bitcoin, and you allegedly get a speculative asset boom whose driving force is rising prices, not fundamentals.

But a review of full-year market movement dispels this, in our view. Bitcoin and US Tech (as tracked by America’s Nasdaq Index, which has a large weighting toward Information Technology companies) haven’t exactly moved in lockstep even in the brief periods when they rose simultaneously.^[x] Yes, bitcoin and Tech stocks followed a similar path during early-2025’s correction and subsequent rebound—but the former has bounced around much more violently over the past six weeks than the latter.^[xi] Since 6 October, whilst bitcoin has plunged -29.1%, the Nasdaq is down a much-milder -1.6%.^[xii] We think it is a classic case of short-term correlation without causation and a sign people are reaching for reasons to dismiss Tech’s rally, not justify it. In an actual bubble, you would have the opposite, based on our studies of market history.

In our view, all this year shows is that bitcoin remains a speculative commodity, with demand largely dependent on feelings.^[xiii] For instance, when investors buy stocks, they are purchasing slices of ownership in a company that can generate future earnings by selling goods and/or services. Whilst there are exceptions amongst meme stocks and speculative pure AI plays, many of the booming Tech stocks headlines cast as speculative generate a boatload of earnings.^[xiv] When someone buys a bond, they do so for the interest payments. For bitcoin, as far as we can tell, the primary thesis to buy these days is the greater fools theory, i.e., however much you pay, you will be able to find someone to buy it from you later at a higher price. A greater fool than you, if you will. That is a pure guess on fickle human behavior, in our view, not something one can reliably forecast or predict, as the last month’s slide shows.

Whilst we aren’t inherently for or against cryptocurrencies, we don’t think they are beneficial as a prominent part of a long-term, growth-orientated portfolio. An asset like bitcoin is extremely volatile, which can steer investors off the path to reaching their investment goals.

Annex: Bitcoin Price, November 2020 – November 2025

Source: FactSet, as of 20/11/2025. Bitcoin price in USD, 19/11/2020 – 19/11/2025. Currency fluctuations between the dollar and pound may result in higher or lower investment returns.