Bitcoin’s Wild Ride to Nowhere

Among the many stories grabbing headlines recently, did you hear about the bitcoin bear market? As some outlets have noted, the price of the world’s preeminent cryptocurrency dipped below $90,000 Monday and again on Wednesday, leaving it down more than -28% from early October’s all-time high of $126,000—and erasing all its gains this year.^[i] Smaller cryptocurrencies are also getting rocked. Bitcoin’s recent pullback offers a timely reminder of cryptocurrencies’ boom-and-bust nature—the digital currency remains a speculative commodity that doesn’t have a place in a long-term, growth-oriented 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.^[ii] From that early 2025 high, bitcoin plummeted -28.1% through April 8 (the same day the global stock market correction ended).^[iii] Bitcoin then climbed throughout the spring and summer, with many crediting President Donald Trump’s supposed “crypto-friendly” agenda. Bitcoin hit an all-time high of $126,170 on October 6, bringing its return to 33.6% on the year … but then proceeded to surrender all those gains.^[iv] It now sits down -4.0% year to date).^[v]

For visual learners, here is a chart.

Exhibit 1: Bitcoin’s Rollercoaster 2025

Source: FactSet, as of 11/19/2025. Bitcoin price, 12/31/2024 – 11/19/2025.

The reasons to be bullish on bitcoin and other cryptocurrencies seemingly evolve year to year, from an inflation hedge (as bitcoin supply is sort of capped^[vi]) to a haven from “dedollarization” to the future of payments, with some even nodding to central bank-backed coins. In 2025, much excitement surrounded pro-crypto 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, and other digital asset legislation (e.g., the CLARITY Act, which focuses on crypto oversight) remains under congressional review.

Some viewed bitcoin’s ascent this year as part and parcel with an “everything bubble.” After the Liberation Day correction, global stocks rebounded and reached new highs by June, with lots of attention on the more speculative corners (e.g., “meme” stocks and SPACs). Gold surpassed $4,000 per ounce for the first time. But the big story: surging AI investment and its potential implications. There was some excitement around the supposed huge productivity gains—but also a lot of fear 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 quick look at full-year market movement should dispel this. Bitcoin, Tech and gold haven’t exactly moved in lockstep even in the brief periods when all rose simultaneously. Yes, bitcoin and Tech stocks followed a similar path during the Liberation Day correction and subsequent rebound—but the former has bounced around much more violently over the past six weeks than the latter. 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. (Exhibit 2)

Exhibit 2: 2025’s Returns Are All Over the Place

Source: FactSet, as of 11/19/2025. Bitcoin price, gold price, Nasdaq Total Return Index, 12/31/2024 – 11/17/2025. Indexed to 100 on 12/31/2024.

All this year shows is that bitcoin remains a speculative commodity, with demand largely dependent on feelings or, in Gen Z parlance, the vibes.^[vii] 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. While there are exceptions among meme stocks and speculative pure AI plays, many of the booming Tech stocks headlines cast as “speculative” generate a boatload of earnings. 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, not something one can reliably forecast or predict, as the last month’s slide shows.

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