IOSG founder: Bitcoin has undergone a historic major reshuffle; bullish on the first half of 2026.

Author: Jocy, Founder of IOSG

This is a fundamental shift in market structure, yet most people are still viewing the new era through the lens of the old cycle.

A 2025 recap of the crypto market reveals a paradigm shift from retail speculation to institutional allocation. Core data shows institutional holdings at 24%, while retail investors exited by 66%—the crypto market saw a complete turnover in 2025. Forget the four-year cycle; the institutional era brings new rules to the crypto market! Let me use data and logic to dissect the truth behind this "worst year."

1/ Let's look at the surface data first—asset performance in 2025:

Traditional assets:

Silver +130%

Gold +66%

- Copper +34%

Nasdaq +20.7%

- S&P 500 +16.2%

Crypto assets:

-BTC -5.4%

- ETH -12%

- Mainstream counterfeit products -35% to -60%

Looks terrible? Keep reading.

2/ But if you only look at the price, you'll miss the most important signal.

Although BTC is down 5.4% year-on-year, it once hit an all-time high of $126,080 during the period.

More importantly: what happened while prices were falling?

BTC ETF net inflows in 2025: $25 billion

Total AUM: $114-120 billion

Institutional holdings: 24%

Some are panicking, some are buying.

3/ Here is the first key judgment:

Market dominance has shifted from retail investors to institutional investors.

The approval of BTC spot ETFs in January 2024 was a watershed moment. The market, previously dominated by retail investors and OGs, is now dominated by macro investors, corporate treasuries, and sovereign wealth funds.

This is not simply a change in participants, but a rewriting of the rules of the game.

4/ Data supports this judgment:

BlackRock IBIT reached $50 billion AUM in 228 days, becoming the fastest-growing ETF in history. It now holds 780,000-800,000 BTC, surpassing MicroStrategy's 670,000 BTC. Grayscale, BlackRock, and Fidelity together account for 89% of the total assets of the BTC ETF. (13F investment fund plan)

86% of institutional investors already hold or plan to allocate digital assets.

The correlation between BTC and the S&P 500 is expected to increase from 0.29 in 2024 to 0.5 in 2025.

5/ Let's look at the aggressive strategies of BlackRock and MicroStrategy:

BlackRock IBIT holds approximately 60% of the BTC ETF market share, with its holdings of 800,000 BTC surpassing MicroStrategy's 671,268 BTC.

Institutional participation continues to rise:

* 13F reporting institutions' holdings account for 24% of the total ETF AUM (Q3 2025)

* Professional institutional investors accounted for 26.3%, an increase of 5.2% compared to Q3.

* Large asset management companies account for 57% of the holdings in the 13F BTC ETF, and professional hedge funds account for 41%, totaling nearly 98%. This indicates that institutional holdings are currently dominated by these two types of professional investors, and do not yet include more conservative institutions such as pension funds and insurance companies (who may still be observing or have just begun to allocate).

* Institutional holdings of FBTC reach **33.9%**

Major institutional investors include the Abu Dhabi Investment Council (ADIC), Mubadala sovereign wealth fund, and CoinShares Harvard University endowment fund (holding $116 million IBIT). Large traditional brokerages and banks have also increased their holdings in Bitcoin ETFs. Wells Fargo reported holdings of $491 million, Morgan Stanley reported $724 million, and JPMorgan Chase reported $346 million. This indicates that Bitcoin ETF products are being continuously integrated by major financial intermediaries.

The question is: Why are institutions continuing to build positions at "high" levels?

6/ Because they look at the cycle, not the price.

Since March 2024, long-term holders (LTH) have sold a total of 1.4 million BTC, worth $121.17 billion.

This is an unprecedented release of supply.

But miraculously, prices didn't collapse.

Why? Because institutional and corporate coffers absorbed all this selling pressure.

7/ Three waves of selling by long-term holders:

Three waves of selling by OG investors

From March 2024 to November 2025, long-term holders (LTH) sold approximately 1.4 million BTC (worth $121.17 billion).

First wave (late 2023 - early 2024): ETF approval, BTC $25K → $73K

Second wave (end of 2024): Trump elected, BTC surges to $100K

The third wave (2025): BTC stays above $100K for an extended period.

Unlike the single, explosive distributions of 2013, 2017, and 2021, this time it's a multi-wave, sustained distribution. We've seen BTC trade sideways at its high point for the past year, a situation never seen before. BTC that hasn't moved in over two years has decreased by 1.6 million coins (approximately $140 billion) since the beginning of 2024.

But the market's absorption capacity has become stronger.

8/ Meanwhile, what are retail investors doing?

Active addresses continue to decline

Google searches for "Bitcoin" fell to an 11-month low.

Small transactions ($0-$1) decreased by 66.38%.

Transactions exceeding $10 million increased by 59.26%.

River estimates that retail investors will net sell 247,000 BTC (approximately $23 billion) in 2025.

Retail investors are selling, institutional investors are buying.

9/ This leads to the second key judgment:

The current period is not the "top of the bull market," but rather the "position-building period for institutions."

Traditional cyclical logic:

Retail investor frenzy → Price surge → Crash → Restart

New Cycle Logic:

Stable institutional allocation → narrowing volatility → rising price center → structural rise

This explains why prices are hovering, but funds are still flowing in.

10/ The policy environment is the third dimension.

The Trump administration's 2025 plan is already in place:

✅ Encryption Executive Order (signed 1.23)

✅ Strategic Bitcoin Reserves (~200,000 BTC)

✅ GENIUS Act Stablecoin Regulatory Framework

✅ SEC Chairman replaced (Atkins takes office)

Pending:

⏳ Market Structure Act (77% chance of passing before 2027)

Stablecoins buying short-term US Treasury bonds could grow tenfold in the next three years.

Potential impact of the 2026 midterm elections

435 House seats and 33 Senate seats will be up for re-election in 2026. 274 "pro-crypto" candidates were elected in 2024, but banking lobbying groups plan to spend over $100 million to combat the impact of crypto donations. Polls show that 64% of crypto investors consider a candidate's crypto stance "very important."

The policy friendliness is unprecedented.

11/ But there's a time window issue here:

There will be a midterm election in November 2026.

Historical pattern: "Policy implementation precedes election years"

→ A flurry of policies were implemented in the first half of the year.

→ Awaiting election results in the second half of the year

→ Volatility amplification

Therefore, the investment logic should be:

The first half of 2026 = a policy honeymoon period + institutional allocation = optimistic outlook

The second half of 2026 = increased political uncertainty = greater volatility

12/ Now let's go back to the question at the beginning:

Why am I still optimistic about crypto despite it being projected to be the worst performing sector in 2025?

Because the market has completed a "change of hands":

- From retail investors to institutional investors

- From speculative chips to chip allocation

- From short-term speculation to long-term holding

This process will inevitably be accompanied by price adjustments and fluctuations.

13/ How to interpret institutional target prices?

VanEck: $180,000

Standard Chartered: $175,000-$250,000

Tom Lee: $150,000

Grayscale: Record high in the first half of 2026

It's not blind optimism, but rather based on:

- ETFs continue to see inflows

- DAT, a publicly listed company, increased its holdings (134 companies worldwide hold 1.686 million BTC).

- An unprecedented policy window for the United States

- Organizational setup just started

14/ Of course, risks still exist:

Macroeconomic factors: Federal Reserve policy, strong US dollar

Regulation: Market Structure Bill May Be Delayed

Market: LTH may continue to sell.

Politics: Midterm election results uncertain

But the other side of risk is opportunity.

When everyone is bearish, that's often the best time to make strategic investments.

15/ Final Investment Logic:

Short term (3-6 months): Trading range of $87K-$95K, institutions continue to build positions.

Mid-term (first half of 2026): Driven by both policy and institutional factors, target $120K-$150K.

Long term (second half of 2026): Increased volatility, depending on election results and policy continuity.

Core judgment:

This is not the top of the cycle, but the beginning of a new cycle.

16/ Why do I have this confidence?

Because history tells us:

- Retail investors dominated in 2013, reaching a high of $1,100.

- The 2017 ICO frenzy, reaching a peak of $20,000.

- DeFi + NFT in 2021, peaking at $69,000

- Institutional investors entered the market in 2025; current value is $87,000.

Each cycle sees more professional participants, larger amounts of capital, and more complete infrastructure.

The "worst performance" in 2025 is essentially:

The transition from the old world (retail speculation) to the new world (institutional allocation).

Price is the cost of transition, but the direction has been determined.

When BlackRock, Fidelity, and sovereign wealth funds build positions on the left side...

Retail investors are still wondering, "Will the price continue to fall?"

This is the difference in perception.

18/ Final Summary:

2025 marks an acceleration in the institutionalization of the crypto market. Despite negative annual returns for BTC, ETF investors demonstrated strong "HODL" resilience. While 2025 appears to be the worst year for crypto, it is actually:

- Largest supply turnover

- Strongest institutional allocation intention

- The clearest policy support

- The most extensive infrastructure improvement

Prices fell 5%, but ETFs saw inflows of $25 billion.

This in itself is the biggest signal.

Optimistic about the first half of 2026📈

19/ As long-term practitioners and investors, our job is not to predict short-term prices, but to identify structural trends. Key points to watch in 2026 include: progress on market structure legislation, the possibility of expanding the strategic Bitcoin reserve, and policy continuity after the midterm elections. In the long term, the improvement of ETF infrastructure and regulatory clarity lay the foundation for the next round of growth.

When the market structure undergoes a fundamental change

Old valuation logic will become invalid.

New pricing power will be rebuilt.

Stay rational, stay patient ⚡️

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Data source:

CoinDesk, CryptoSlate, Glassnode, CoinShares, Farside Investors, Strategy official website, CME Group, Yahoo Finance

This does not constitute investment advice. (DYOR)