Crypto market: preliminary results of 2025 and prospects for next year

[Ben Graham]

The crypto market is currently experiencing a downtrend that began to intensify in mid-October.

While major financial markets are closed for Christmas, the cryptocurrency market is still operating, though trading activity is minimal. The downward trend that started in mid-October persists. While gold, silver, and stock market assets are setting record after record, the crypto market has entered a phase of free fall.

Investors appear to be overlooking market expectations regarding further monetary policy easing by the Fed, the weakening dollar, and Donald Trump's promises to make the US "the crypto capital of the world," create a strategic Bitcoin reserve, lift regulatory restrictions, and generally support the industry.

Federal Reserve The CME FedWatch tool estimates the probability of rate cuts in 2026 at about 70%, and market participants have priced in two cuts despite positive economic reports. President Donald Trump stated on social media that critics of his policies and desire for lower interest rates will not be able to lead the Federal Reserve. White House advisor Kevin Hassett also noted that the Fed is not cutting rates quickly enough amid stronger-than-expected economic growth. Meanwhile, members of the Fed leadership, including board member Stephen Miran, a proponent of lower rates, indicate a gradual reduction of disagreements regarding future rate cuts.

Trump Overall, Donald Trump's return to power in the US has resulted in significant changes in financial markets in 2025. Trump's unpredictability has led to unprecedented uncertainty, impacting investor sentiment and creating a complex environment for market analysis. One of the key aspects has been the policy of imposing mass tariffs on goods and services entering the US. This has affected nearly all trading partners and resulted in significant changes in the economy and trade, directly impacting the financial sector.

By positioning himself as a strong supporter of the crypto industry during the 2024 election campaign, Donald Trump sparked a sharp surge in Bitcoin buyer activity following his victory in November 2024. The BTC/USD exchange rate soared from $70,000.00 to $126,000.00 by October 2025.

However, the price subsequently fell for the remainder of 2025, while some altcoins plummeted significantly. For instance, let's consider two of the top-10 popular altcoins, Dogecoin (DOGE) and Cardano (ADA). Each employs its own approach to market positioning, reflecting different growth and sustainability strategies.

Some ideas about altcoins

1. Dogecoin (DOGE): Originally started as an internet joke, Dogecoin has become one of the most recognizable meme coins. Initially conceived as a satirical take on cryptocurrency trends, its rapid rise can largely be attributed to its dedicated followers and intermittent support from high-profile figures like Elon Musk on social media. Despite significant volatility, Dogecoin's mass popularity and network effect have allowed it to remain among the leading assets, continually attracting investor interest.
2. Cardano (ADA): Founded in academic circles, the blockchain platform Cardano is focused on smart contract development. Its robust infrastructure appeals to long-term investors seeking reliability and scalability over immediate profits. Although real-world application adoption has lagged behind initial forecasts, Cardano retains a loyal audience among the top cryptocurrencies.

Looking back at the same period and the time when Bitcoin and the cryptocurrency market began their fall in the autumn-winter season, in just three incomplete months from mid-October to the still-ongoing December, DOGE (in the DOG/USD pair) depreciated by 2.25 times, dropping from an October local maximum of 0.2700 to a December low near 0.1200. ADA (in the ADA/USD pair) fell from an October peak of 0.8915 to a December minimum around 0.3460, depreciating by 2.57 times.

Today, during the festive Christmas period and with minimal trader activity at the time of this article's publication, the DOG/USD pair traded near 0.1263, slightly rising from an intraday low of 0.1257, while the ADA/USD pair was near 0.3500, 10 pips above its intraday minimum of 0.3490. Both cryptocurrency pairs are moving within the zone of a long-term bear market toward their minimum values since their release and entry into the market.

Overall, 2025 can likely be characterized as quite controversial, extremely volatile, and turbulent, following a different trajectory from the typical stock market dynamics.

For the upcoming year of 2026, cryptocurrency market experts outline three main scenarios:

1. Base case (most likely): Stabilization of volatility as institutional capital flows in and regulatory improvements take shape. Bitcoin and major altcoins maintain their leading positions, while DeFi grows through L2 solutions and the tokenization of real-world assets (RWA). Periodic corrections remain frequent.
2. Rapid growth (optimistic): A favorable regulatory ecosystem and large-scale asset tokenization attract significant institutional capital, leading to rapid market capitalization growth and increased real-world use of crypto technologies in payments and finance.
3. Constrained (pessimistic): Strict regulatory measures in key economies, major hacks, or failures of systemic projects lead to liquidity outflows and significant corrections. Technological and regulatory barriers hinder mass adoption. Bitcoin and most altcoins continue to decline.

What should be monitored in 2026?

1. General for investors:

• Volumes and inflows into spot and futures ETFs.
• Changes in the share of stablecoins in market circulation (a measure of liquidity inflow/outflow).
• Adoption of regulations on stablecoins and tokenized securities in the U.S., EU, and China.
• Macroeconomic indicators: inflation, central bank rates, and risk dynamics in traditional markets.
• 2. Additionally, for more in-depth analysis by specialists:

• Adoption rates of L2 and zk solutions (number of transactions, fees, UX metrics).
• On-chain metrics: addresses with positive balances, smart contract activity, total value locked (TVL) in DeFi.

Practical recommendations for investors (not investment advice, but general principles):

• Diversification: A combination of "core" assets (BTC, ETH) and carefully selected promising projects.
• Risk management: Determine the limit of drawdown, use positions of adequate size, and establish a stop-loss plan.
• Stay updated on regulatory news and prepare a response plan in the event of tightened requirements.
• Evaluate projects based on real-world usage, team quality, security standards, and token economics.

Conclusion By 2026, the crypto space is likely to be more integrated into the global financial system, with improved infrastructure, a clearer regulatory environment, and more significant participation from institutional investors. However, risks will remain high: technological vulnerabilities and regulatory shifts may cause sharp fluctuations. The success of the market will depend on how well participants can combine innovation with a responsible approach to security and regulatory compliance.

The year 2026 will likely mark an important stage in the development of the crypto market, characterized by a high level of uncertainty and, at the same time, significant profit opportunities. Key growth drivers include improved regulation, technological advancement, and increased trust from institutional investors.

Nevertheless, investors face serious challenges related to price volatility and the need for thorough risk analysis. It is essential to remember that success in the cryptomarket requires a deep understanding of the unique characteristics of each specific cryptocurrency and the ability to respond promptly to changes in market conditions.

The material has been provided by InstaForex Company - www.instaforex.com