Bitcoin 2025: from the myth of halving to the liquidity cycle… And the november correction

In a matter of a few weeks, the crypto market went from euphoria to discomfort. At the beginning of October 2025, Bitcoin set an all-time high of around $125–$126k, driven by record inflows into exchange-traded funds (ETFs) and a relatively favorable political-regulatory environment in the United States. Last week, the story changed its tone; The price fell below $90,000, erasing virtually all of the year’s gains and chaining a correction of close to 30% from highs. In parallel, financial press estimates indicate that the crypto market as a whole would have lost around $1.1–1.2 trillion in value in about six weeks.

What’s interesting is not just the magnitude of the move, but how this episode fits into Bitcoin’s new dynamics. It is less and less a cycle dominated solely by the halving and more of a cycle marked by institutional liquidity, ETFs, interest rate expectations and a regulatory framework that is being built “on the fly”.

The objective of this text is precisely to try to order some of these ideas, to dimension what cryptocurrencies represent today and, in particular, Bitcoin; describe what happened in the last correction; and read it in the light of what the official bodies are saying.

The real size of the crypto phenomenon

Recent reports from the International Monetary Fund (IMF) and other organizations allow us to put figures on the phenomenon. By the end of 2024, the total capitalization of crypto assets was approaching $3.9 trillion. In the second quarter of 2025, the market returned to above $3.5 trillion, with Bitcoin at all-time highs, and accounting for around 60% of the total. By the third quarter, new editions of the IMF’s Crypto Assets Monitor put the market as a whole at around $4.2 trillion, with Bitcoin’s share somewhat lower, close to 56%. Simply put, one out of every two dollars in the crypto ecosystem is still concentrated in Bitcoin.

Stablecoins are the second big block. The combined capitalization of these tokens pegged to fiat currencies surpassed $230 billion by mid-2025, with USDT (Tether) and USDC concentrating more than $200 billion. Various central banks and the Bank for International Settlements (BIS) have documented that the reserves of these issuers are heavily invested in U.S. Treasury bills and other very short-term assets, to the point that they already compete, in scale, with some money market funds. Recent BIS studies show that sharp inflows and outflows in stablecoins can move bond yields to 3 months, evidencing that the bridge between “crypto” and “safe haven” is no longer anecdotal.

At the same time, the “institutionalization” of the sector is advancing. Global surveys of hedge funds indicate that more than half already invest in crypto assets, although most limit that exposure to a relatively low percentage of their assets (around 2%). The IMF itself, through its crypto monitor, documents a shift in the investor base: flows into Bitcoin funds and exchange-traded products have become more important and the relative weight of the pure retail investor has decreased versus investment advisors, regulated intermediaries, and institutional vehicles.

Last week’s correction: what happened and why

Against this backdrop, the November correction is no longer a simple scare. Technically, Bitcoin was coming off a very rapid climb; from levels below $80,000 to new all-time highs above $125,000 in just a few months. That bullish leg coincided with weekly inflows into crypto ETFs that, according to market data, approached $6 billion, of which more than half was concentrated in Bitcoin-referenced products. The price rose, the flows accompanied and the dominant discourse was that of “new cycle”.

The turning point came when three elements converged. First, on Oct. 5, 2025, Bitcoin reached an all-time high of around $125–$126k, driven by record inflows into crypto ETFs (around $5.95 billion in a single week, of which $3.55 billion went to Bitcoin products). A sharp change in ETF flows from the second week of November caused the price to fall by about 30%, starting to register net outflows. Estimates from data providers and platforms place those outflows, in a few days, at between $1.8 billion and $2.5 billion in Bitcoin products alone. In a market where a significant part of the supply is tied up in exchange-traded funds, this reversal of flows quickly translates into selling pressure.

Second, a less benign macro context. Bitcoin’s correction coincided with several days of declines in global stock indices, fueled by debate over a potential “AI bubble” in tech stocks and growing uncertainty regarding the pace of the Federal Reserve’s rate cuts. The IMF’s April 2025 Global Financial Stability Report already warned that market risks had increased significantly due to the combination of high valuations, leveraged institutions, and sensitivity to negative surprises in rates and inflation. In that framework, Bitcoin increasingly acts as a risk asset: when global appetite falls, its price tends to amplify movements.

The third element was technical and psychological. The breakdown of support levels closely followed by traders — such as long-term moving averages — and the “extreme fear” narrative reflected by sentiment indices accelerated the selling. The result was a close to 30% drop from highs, a piercing of the symbolic threshold of $90,000, and a rapid adjustment in the valuations of listed crypto companies (miners, exchanges, infrastructure companies), which tend to overreact to the coin’s movements.

The immediate consequences are clear. Many investors who entered the last phase of the rally, especially via ETFs, accumulate latent losses; many leveraged strategies had to be forcibly undone; and the tone in other areas of the ecosystem, such as DeFi, became more cautious. It is no coincidence that, in parallel, reports of cyberattacks and losses due to the exploitation of decentralized protocols put the number of cryptoassets stolen at more than 2,000 million dollars in the first half of the year alone: episodes of market stress and security problems tend to feed off each other in terms of trust.

ETFs, institutionalization and systemic risks

None of the above means that the underlying trend has reversed. Bitcoin has become “normalized” as a financial asset in the sense that it is already part of the product menu of many investment platforms and that a significant portion of its supply is held in regulated vehicles.

The available data illustrate this change. Reports from market supervisors show that, as early as 2024, crypto ETFs in jurisdictions such as Canada concentrated hundreds of thousands of BTC, valued at tens of billions of dollars. Academic analyses for 2025 estimate that the ten largest crypto ETFs accumulated in the order of 170 billion dollars between Bitcoin and Ether, around 6% of the combined capitalization of both assets. In addition, there are other structured vehicles and listed companies that have incorporated Bitcoin into their balance sheet. When these blocks are added together, the conclusion is that a relevant fraction of Bitcoin’s float depends on the behavior of institutional investors and the dynamics of listed products.

This process of institutionalization is being accompanied, not without friction, by a global regulatory framework. The Financial Stability Board (FSB), which brings together supervisors and central banks from major economies, approved in 2023 a regulatory framework for crypto-asset activities based on the principle of “same activity, same risk, same regulation”. In 2024, the FSB and IMF presented the G20 with a joint roadmap for policy implementation on cryptoassets. And in 2025, a thematic review by the FSB itself assessed the degree of progress of countries, with a nuanced message: many jurisdictions are aligning their rules with that framework, but significant gaps remain, especially in terms of stablecoins and cross-border activities.

The Bank for International Settlements has gone further on the analytical level, showing that DeFi and traditional finance share functions — lending, payments, trading, liquidity provision — but that crypto architecture introduces additional sources of risk: less visible leverage, diffuse governance via tokens, smart contracts with vulnerabilities, and a strong concentration of liquidity in a few protocols and pools. In Europe, the European Systemic Risk Board (ESRB) has warned that risks associated with crypto assets are “increasing” as the sector enters the mainstream, supported by more pro-crypto policies in some jurisdictions and by the rapid expansion of stablecoins in global use.

The result is a dual picture: on the one hand, Bitcoin and the rest of the cryptoassets are already too large and too interconnected to be ignored; on the other, the process of fitting them within the prudential and market rules in force is far from complete.

The weakest link: households and small investors

Amid these trillion-dollar figures and technical debates, the weakest point remains in the retail investor. The OECD’s Consumer Finance Risk Monitor concluded that cryptoassets were the product that generated the greatest “consumer harm” within the investment segment in 2022, and warned that authorities expected an increase in that damage in 2023. Among the reasons are the very high volatility, the complexity of many products (leverage, derivatives, “guaranteed” returns) and aggressive marketing practices towards young audiences or those with less financial capacity.

A subsequent OECD report on digital financial literacy adds disturbing nuances: on average, only about 29% of adults reach the minimum desirable level of digital financial literacy, and less than 60% of crypto holders know that these assets are not legal tender in their country. In other words, millions of people are entering a complex and volatile market with limited conceptual tools, just as volatility — as we saw in November — remains structural.

If the warnings of the IMF, BIS, FSB and the OECD itself are taken seriously, any potential investor in Bitcoin should ask themselves three basic questions before buying the ticker:

If you truly understand what you’re buying, knowing that Bitcoin doesn’t generate cash flows and that its valuation depends on expectations, liquidity, and narrative
Whether you could withstand a 50% drop without compromising essential financial goals
If you know who is protecting you if something goes wrong, i.e., under what regulatory framework the intermediary through which you are exposed operates (an ETF supervised by the securities authority, an exchange with clear custody rules, or a platform in a jurisdiction with regulatory gaps).

When the honest answer to any of those questions is “no,” the problem is no longer just Bitcoin’s intrinsic volatility, but the concrete way in which risk is being taken.

Conclusion: a large, volatile and increasingly less isolated asset

The official data paint a clear picture. The crypto market is moving around 4 trillion dollars; Bitcoin captures between half and two-thirds of that value, and stablecoins accumulate more than $230 billion with significant reserves in short-term government debt. DeFi protocols manage on the order of $150 billion while also suffering attacks and losses that are counted in the billions every year. The big regulators have stopped looking at the phenomenon as a curiosity to treat it as another front of financial stability, although they recognize that the implementation of rules is still fragmented.

Last week’s correction doesn’t erase the relevance Bitcoin has gained in global portfolios, but it does serve as a reminder of three ideas. First, that we are talking about an asset that, although part of an emerging financial infrastructure, continues to have extreme volatility. Down 30% from highs and more than a trillion dollars evaporated from the crypto market in a few weeks is a lot for any asset class. Second, that integration with the traditional financial system means that their cycles are no longer independent: what happens with interest rates, AI valuations, or stablecoin regulation translates, almost in real time, into Bitcoin’s price. And third, that the protection of the retail investor continues to be the Achilles’ heel; Financial and digital literacy lags far behind product sophistication and market size.

For the general public, the moral is simple but demanding: look at Bitcoin and crypto not as a casino on the margins of the system, but as one more chapter – very volatile – of a global finance in transformation. And apply a kind of disciplined “personal monetary policy”: be well informed, diversify and never risk more than one is willing to lose completely.

References

Bank for International Settlements (BIS). Reports and working papers on cryptocurrencies, decentralized finance, and the impact of stablecoins on safe asset markets.
Basel Committee on Banking Supervision. Documents on the prudential treatment of banks’ exposures to crypto-assets.
European Systemic Risk Board (ESRB). Recent reports on crypto assets, DeFi, and financial stability risks in the European Union.
Financial Stability Board (FSB). Global Regulatory Framework for Crypto-asset Activities, G20 Crypto-asset Policy Implementation Roadmap and Thematic Implementation Review.
International Monetary Fund (IMF). Global Financial Stability Report (2024 and 2025 editions) and Crypto Assets Monitor on market evolution, flows and risks.
IMF and FSB. Synthesis Paper: Policies for Crypto-assets and documents on effective policy elements for crypto-assets.
OECD. Consumer Finance Risk Monitor and Improving the Digital Financial Literacy of Crypto-asset Users, as well as studies on the institutionalization of cryptoassets and the DeFi–TradFi interconnection.