Bitcoin, the flagship cryptocurrency, is on track to score its second-worst Q4 of all time. It performed worse than that only during the devastatingly brutal crypto winter of 2018.
It is worth noting that the gap between the worst year (2018) and the second worst (2025) is significant, but 2025 is still noticeably deeper in the red than the other bad years (2014, 2019, 2022). It separates 2025 from a “mild correction” and pushes it into the “crash” territory.
The average return for Q4 is 77%. This makes Q4 historically the strongest quarter for Bitcoin. Investors often rely on Q4 to save their portfolio’s yearly performance.
By dropping nearly 23%, Bitcoin has underperformed its historical average by practically 100 percentage points (from an expected +77% to a realized -23%).
Instead of the usual “gift” of gains that Bitcoin holders are used to receiving in December (like the +479% in 2013 or +168% in 2020), they are receiving a heavy loss.
The year started poorly and is ending even worse. This is psychologically draining for investors because the gains made in the middle of the year (Q2) have been largely erased by the losses at the end (Q4). Ending the year with a crash is demoralizing. It convinces investors that the asset class is in a long-term downtrend
Why is Q4 so terrible?
Bitcoin actually kicked off Q4 on a high note. It reached a new all-time high of roughly $126,000 in early October. However, things went south at a very fast pace.
According to a December 2025 report by CryptoQuant, the main reason behind the crash is “demand exhaustion.”
The main groups that drove the 2024–2025 rally (spot ETF buyers, corporate treasuries, and so on) have ceased buying.
Moreover, there have been plenty of reports of whales exiting the market.
The expectation of a year-end rally trapped many traders who bought in November.