Why did the Bitcoin price fall below expectations: market optimists' perspective

While the Bitcoin price in 2025 showed disappointing results, dropping 13.25% over the year, major cryptocurrency fund representatives and analysts continue to advocate for the asset’s long-term potential. Their arguments are based on the conviction that the current weakening is a temporary phenomenon before an upcoming upward movement.

Gold Market Outpaces Bitcoin in the Race for Investors

Investor focus has shifted to more traditional inflation-protection assets. During periods of high inflation, geopolitical instability, and uncertainty with interest rates, gold has risen by over 80%, while Bitcoin’s price ($87.83K) remains stagnant at low levels. This divergence has called into question one of the key narratives of the crypto community: Bitcoin’s ability to serve as a reliable store of value in times of global uncertainty.

At the same time, experts from leading crypto companies offer several explanations for this paradox. Their stance remains optimistic about whether Bitcoin’s price can recover and rewrite the story of this confrontation.

Three Theories Explaining the Current Price Decline

“Muscle Memory” of Institutional Investors

According to specialists from Bitwise and ByteTree, the current capital outflow from cryptocurrencies is not due to a demand crisis but to investors’ habit of returning to familiar assets during periods of uncertainty. Large investment funds have historically relied on gold and silver, preferring to avoid experimenting with technology, even if it demonstrates better fundamentals.

An expert from ByteTree notes that gold is traditionally perceived as a reserve asset of the real world, while Bitcoin is its digital equivalent. However, since today’s problems are concentrated in the traditional economy, investors logically prefer proven protection methods.

Transfer of Ownership Instead of Loss of Interest

Risk Dimensions’ Chief Investment Officer offers an alternative view on Bitcoin’s price. He claims that the market is witnessing not a demand decline but a redistribution of assets. Massive inflows of institutional funds into Bitcoin ETFs do not lead to price increases because these funds simply absorb the supply that early participants have been dumping on the market for many years.

Thus, the current price stagnation reflects a transfer of ownership from retail investors to large funds — a process that does not necessarily accompany a bullish movement.

Correlation with Risky Assets

Gannett Wealth Advisors analyst points to a historical deviation in the GLD/BTC ratio. Since Bitcoin remains correlated with tech stocks and risky assets, its price declines along with them, despite its theoretical inflation-hedging properties. However, the expert warns that this deviation from the norm may be short-lived — Bitcoin will “catch up” with gold when its technical protocol and digital scarcity become apparent advantages.

When Will Capital Shift to Digital Gold?

Experts agree on one thing: the current situation is temporary. Peter Lane (Jacobi Asset Management) admits that the “digital gold” narrative has not yet been tested but is convinced of an upcoming capital rotation. Once traditional solid assets are overbought, Bitcoin’s price will gain momentum for recovery.

Analysts note a significant undervaluation of Bitcoin relative to the global money supply and macroeconomic conditions of 2026. According to the Meyer ratio between Bitcoin and gold, the cryptocurrency’s price is at levels last seen in 2022 — a potential rebound signal.

New Sources of Demand for Bitcoin Price

ProCap Financial Chairman notes that Bitcoin has long served as an inflation hedge, but with a probable deflationary period approaching, it will need additional growth drivers. Nevertheless, experts remain optimistic that Bitcoin’s price will soon find new demand sources amid network development and its expanding use as a native monetary asset of the internet.

Musquet’s director defends the position that the “failure of digital gold” thesis is premature. Bitcoin’s fixed supply and ongoing network growth ensure superiority over inflation and traditional gold over multi-year horizons. Therefore, the current decline is merely a retreat before a long-term ascent.

The Market Awaits the Moment of Truth

Despite current disappointment, the consensus among leading crypto industry experts is clear: Bitcoin’s price has fallen not due to fundamental flaws of the asset but because of a transitional process in the market. When investors reassess Bitcoin’s deflationary properties, its digital nature, and its potential as an internet monetary asset, capital will start flowing from gold into cryptocurrency, allowing the asset’s price to capture the lost volatility and return to growth.