Critical Points and Their Consequences in the Crypto Market in 2025
Introduction
Source: investopedia
The 2025 cryptocurrency market stands out as a period defined more by macroeconomic and political headlines than on-chain data, unlike previous cycles. Government shutdowns, US-China trade tensions, central bank communication, corporate Bitcoin strategies, stock market security issues, and fluctuations in global liquidity conditions have led to clear breaks in both the Bitcoin and crypto markets. In this context, to understand the events around which the clear breakouts in the cryptocurrency market in 2025 took shape and how the critical turning points throughout the year formed a summary, it is necessary to examine the eight key events of the year in a chronological and cause-and-effect-focused manner.
Key Breakdown Moments Throughout the Year
- January 9–13: Silk Road Bitcoins and the Year’s First Sharp Correction
The first major disruption of the year emerged on January 9 when a US court approved the sale of 69,370 Bitcoins seized in the Silk Road case. The market interpreted this decision as a large-scale supply risk that could extend into the medium and long term, and this expectation created pressure, particularly on leveraged long positions. While Bitcoin remained relatively resilient, a wave of selling rapidly spread across the altcoin market, leading to the year’s first broad-based correction amid leveraged position liquidations. Thus, the regulatory-driven supply shock, leveraged liquidation, and general market sell-off that would recur throughout 2025 was clearly visible for the first time during this period.
- February 24–28: Bybit hack and risk aversion combined with tariffs
The second break at the end of February occurred as a combination of crypto-specific and macro-driven shocks. The news of the Bybit hack brought concerns about exchange security and custody infrastructure back to the forefront, exposing the market’s technical vulnerabilities. During the same week, Trump’s emphasis on continuing tariffs on Canada and Mexico, his statement on imposing a 25% customs duty on the European Union, and his messages of additional taxes and sanctions against China led to the repricing of the risk of a global trade war. Thus, the crypto market faced both the hacking incident and macro pressure from tariffs at the same time, resulting in weakened liquidity, reduced risk appetite, and a significant downward break at the end of February with the unwinding of leveraged positions.
- April 21–22: Relief rally driven by tariff optimism
The wave of growth at the end of April served as a relief rally following the pressure in February. Following US President Donald Trump’s statement that “we will make a lot of money, tariff negotiations are going well,” news that preparations were being made for an agreement with China on tariffs led markets to price in that the worst-case scenario of a trade war had been partially left behind. This easing of trade tensions has also brought renewed buying momentum to technology stocks and crypto assets, with Bitcoin and major altcoins entering a bullish phase that partially repaired their previously damaged technical outlook. Thus, the dynamic of sharp sell-offs when tariff rhetoric turned negative and rapid recoveries when it turned positive, which has become characteristic of 2025, has never been so pronounced.
- May 6–8: Institutional buying, Pectra update, and Fed rhetoric
The movement at the beginning of May was one of the strongest positive breakouts of the year. Nvidia’s announcement that it was exploring the possibility of adding Bitcoin to its balance sheet paved the way for discussions about holding digital assets on corporate balance sheets as a mainstream strategic move. During the same period, Strategy’s announcement that it had purchased 1,895 Bitcoin between April 28 and May 4, along with Metaplanet’s purchase of 555 Bitcoin, provided a backdrop of solidifying institutional demand. On the Ethereum side, the smooth rollout of the Pectra update has strengthened network efficiency and long-term adoption expectations, creating strong momentum in major altcoins as well. While the Fed kept interest rates unchanged, Powell’s statement that conditions for interest rate cuts could arise during the year was interpreted as a signal supporting all risky assets through discount rates. Trump’s statements before and after his Middle East visit, referring to positive announcements that would shake the world, combined with the US-UK comprehensive trade agreement and messages about a possible reduction in Chinese tariffs, led to a broad-based and high-volume rise in both Bitcoin and major altcoins in early May.
- July 9: Uptrend strengthened by tariff postponement and Fed projections
The July surge took shape at the intersection of a temporary easing on the tariff front and more positive projections from the Fed. Trump’s signing of an executive order on July 8 extending the final tariff date to August 1 reinforced the perception that there would be no new tariff shock in the short term, supporting global risk appetite. The Fed’s economic projections, which foresee higher real GDP growth for 2025 and lower inflation than previous estimates, present a framework consistent with controlled growth and falling inflation, opening the door to potential interest rate cuts in the future. This combination has led to a gradual pullback in real interest rate expectations, increasing the appeal of Bitcoin, a “limited supply” asset, and resulting in renewed upward risk appetite in spot and derivatives markets.
- October 1–6: Government shutdown and a new high of $126,200
The critical rise at the beginning of October began with the US government shutdown. Although the government shutdown on October 1 was initially interpreted as a source of uncertainty, the market priced this development as an element that would mean downward risk on growth in the medium term and, consequently, pressure for an earlier or stronger interest rate cut. Concerns about potential cuts in public spending and administrative gridlock translated into expectations of softening long-term interest rates and declining real yields. In this environment, Bitcoin gained strong momentum between October 1 and 6, reaching a new all-time high of $126,200. Although inflows into spot ETFs were not exceptionally high during this period, they followed a steady trajectory and provided a technically supportive foundation for the upward trend.
- October 10: 100% China tariff, Xi meeting rumored to be canceled, and major crash
On October 10, the prevailing market winds suddenly and sharply reversed. Trump’s announcement of plans to raise tariffs on China to 100% and his statement that he would not attend the planned meeting with Xi in South Korea were interpreted as a strong risk-off signal for global markets. This news flow, coinciding with leveraged long positions concentrated at Bitcoin’s recent peak levels, amplified its impact exponentially. Billions of dollars in long positions were liquidated in derivatives exchanges within a day, many altcoins suffered double-digit losses, and Bitcoin gave back a significant portion of its gains accumulated throughout the year. This date went down in history as one of the clearest downward breakout moments for 2025, demonstrating how deep and sudden damage tariff shocks can cause in the crypto market.
- November 11–14: Government reopening, liquidity pressure, and carry trade concerns
The last major break in mid-November was shaped by liquidity and the carry trade channel. The reopening of the government after a 43-day shutdown meant that delayed Treasury issuances would come to the fore in a short period of time, reinforcing expectations that funding costs would rise and pressure would build on risky assets. Simultaneously, the increased likelihood of interest rate hikes in Japan highlighted the risk of unwinding yen carry trade positions, which have fueled global risky assets for years. These developments reinforced the perception that global liquidity could tighten, weakening the recovery attempts in Bitcoin and the broader crypto market that began after the October crash. The movement in mid-November turned into a new wave of selling that erased a significant portion of the 2025 rally.
Conclusion
Looking at 2025 from a holistic perspective, it is evident that significant disruptions in the cryptocurrency market largely took shape around macroeconomic and geopolitical issues. Periods marked by the Bitcoin sale approval stemming from Silk Road, the Bybit hack, and tariff rhetoric demonstrated how cryptocurrency-specific risks, when compounded by macroeconomic pressures, can lead to severe selloffs. Conversely, tariff optimism, institutional Bitcoin purchases, updates on major networks such as Ethereum, and the Fed’s relatively softer communication have formed the basis for the strong upward steps seen throughout the year. The government shutdown and reopening process revealed the extent to which US borrowing dynamics and liquidity conditions, combined with carry trade concerns originating in Japan, could impact the crypto market.
The answer to the question, “What were the critical events in 2025 that led to clear breakouts in the cryptocurrency market?” is embodied in these eight turning points. The answer to the question, “What is a summary of the critical events that occurred during the year?” can be summarized as follows: The first half of the year was characterized by a volatile but cyclical structure defined by regulatory decisions, exchange security issues, and tariff shocks. This was followed by an uptrend phase in the middle of the year, supported by institutional buying, network upgrades, and relatively positive Fed rhetoric. The final quarter, however, saw sharp corrections driven by a government shutdown, aggressive tariff hikes, and the convergence of liquidity and carry trade concerns. Ultimately, 2025 served as a macro stress test for the crypto market, clearly demonstrating that understanding Bitcoin and the broader crypto basket now requires monitoring on-chain metrics alongside tariff directions, budget balances, central bank paths, and global liquidity conditions.
