What's happened
Bitcoin ended 2025 in a bear market, down 6% from its start. Despite setbacks, analysts see catalysts like favorable monetary policy, political backing, and undervaluation driving a strong rebound in 2026, with expectations of outperforming traditional assets.
What's behind the headline?
Bitcoin's 2025 downturn was driven by macroeconomic and geopolitical factors, including market sell-offs triggered by Trump tariffs and global risk-off sentiment. However, the outlook for 2026 is bullish, supported by several catalysts:
- Valuation: Bitcoin is trading near pre-Trump levels, making it attractive relative to other assets.
- Monetary Policy: Expectations of continued Fed rate cuts will likely boost risk assets, including crypto.
- Political Backing: Trump’s administration has shown pro-crypto signals, potentially increasing institutional and governmental support.
- Government Reserves: The US may hold around 233,736 bitcoins, removing them from sell-side pressure.
These factors suggest Bitcoin will outperform traditional assets like gold and equities in 2026, with a constructive outlook based on undervaluation and policy support. Nonetheless, market volatility remains a risk, and investors should remain cautious about macroeconomic uncertainties.
Overall, the narrative indicates a shift from a year of decline to one of potential growth, driven by macroeconomic easing and political support, which will likely catalyze a significant rebound for Bitcoin in 2026.
What the papers say
The analysis draws on insights from Business Insider UK, which highlights Bitcoin's undervaluation and the potential impact of Fed rate cuts and political backing. The Guardian emphasizes the disconnect between Bitcoin's performance and geopolitical tensions, noting that despite high tensions and inflation, Bitcoin failed to act as a safe haven in 2025. Meanwhile, other sources like the New York Times and Japan Times discuss the broader context of crypto regulation and societal implications, underscoring the ongoing debate about crypto's role in the economy. The contrasting perspectives reveal that while some see a bullish future driven by policy and valuation, others remain cautious about macro risks and regulatory hurdles, illustrating the complex landscape Bitcoin navigates heading into 2026.
How we got here
Bitcoin experienced significant volatility in 2025, with market declines following geopolitical tensions, regulatory shifts, and macroeconomic concerns. Despite initial optimism linked to pro-crypto policies under Donald Trump, the year saw a substantial loss in value, culminating in a bear market. Analysts now see potential for recovery in 2026, citing catalysts like easing monetary policy, political backing, and undervaluation relative to other assets.
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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Bitcoin is a cryptocurrency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software.