Bitcoin’s Latest Downturn: Understanding Macro Risks and Changing Institutional Attitudes in 2025

In November 2025, Bitcoin's value dipped below $86,000, representing a notable pullback from its earlier high of over $126,000 that year. This downturn is the result of a mix of global economic challenges, changing attitudes among major investors, and shifting regulatory landscapes. As the crypto sector navigates these obstacles, market participants must analyze how international policy, leveraged trading, and institutional actions interact to determine Bitcoin’s future direction.

Macroeconomic Headwinds: Fed Policy and Risk Reduction

The Federal Reserve’s ongoing rate hikes have been a major factor behind Bitcoin’s recent struggles. Experts point out that the Fed’s more aggressive stance has ended the era of easy money, which had previously supported riskier assets such as

. , borrowing costs for leveraged crypto trades have climbed sharply. This has led investors to reduce risk, favoring cash and assets with less volatility.

Adding to these worries is the increasing concern over global economic imbalances.

that anxiety about a potential bubble in the AI industry and Japan’s unstable government debt have intensified negative market sentiment. These issues have fueled a move away from risk, with Bitcoin—often viewed as a speculative hedge against inflation—bearing the brunt of the sell-off.

Institutional Leverage and Cascade Liquidations

Leverage among institutional investors has heightened Bitcoin’s price swings, turning small drops into larger sell-offs. Data from Investing.com shows that

in late 2025, it set off record levels of forced liquidations as leveraged bets were closed out. Trading venues like and Cboe, which provide regulated crypto derivatives, have become central to this leverage-driven volatility. Traders using high leverage suffered steep losses, triggering margin calls and adding further downward momentum.

The impact of these liquidations was worsened by unexpected regulatory developments. For example,

led to sharp declines in Bitcoin, highlighting how macroeconomic policy now plays a bigger role in crypto price movements. Institutions that once saw Bitcoin as an inflation hedge are now reassessing their positions amid growing uncertainty.

Tighter Regulations and Compliance Hurdles

New regulatory measures in the U.S. have introduced fresh challenges.

, the largest Bitcoin ATM operator in North America, has encountered obstacles due to changing compliance standards. During its Q3 2025 earnings update, would affect its revenue outlook for Q4, but remained optimistic about a rebound as transaction activity stabilizes. This underscores the broader issue for crypto businesses: finding the right balance between innovation and regulatory compliance in a fast-evolving legal environment.

At the same time,

. Nomura Securities in Japan, which oversees $670 billion in assets, plans to introduce Bitcoin investment products, potentially marking a turning point for institutional acceptance of crypto. Such initiatives could boost liquidity and broaden crypto offerings, but their success will depend on the progress of custody solutions and risk management protocols.

Institutional Sentiment: At a Crossroads?

Major investors’ attitudes toward Bitcoin are in flux. While Nomura’s move into the sector signals some optimism, it also shows a shift in risk assessment.

, these efforts could “transform the digital asset landscape” and attract long-term investors to Bitcoin. Still, this positive outlook is balanced by ongoing economic vulnerabilities. of Bitcoin, adding to the downward trend.

The relationship between institutional demand and regulatory transparency will be crucial. Should regulators worldwide continue to clarify rules—especially in key markets like Japan and the U.S.—Bitcoin may regain its status as a reliable store of value. On the other hand, more regulatory tightening or unexpected policy moves could extend the current bearish phase.

Looking Ahead: Proceeding with Caution

Bitcoin’s near-term prospects remain uncertain.

unless a positive catalyst, such as renewed monetary easing by the Fed, emerges. Nevertheless, some analysts believe the bull market could last into 2026, fueled by the delayed impact of looser monetary policy on risk-taking.

Investors are encouraged to use defensive tactics,

and margin levels to anticipate the market’s next moves. For now, Bitcoin’s price is being shaped by a delicate balance of global economic trends, institutional leverage, and regulatory developments.