🐂 Bitcoin’s bear markets are getting milder. Bull markets may be next
Bitcoin has long made investors pay for its bull markets with brutal crashes, but that trade-off may finally be changing.
The crypto asset fell roughly 55% from its October 2025 peak during its most recent bear cycle. That would qualify as a historic collapse in most markets, but for bitcoin, it was relatively tame compared to past collapses. In November 2021, for example, after reaching nearly $69,000, bitcoin plunged below $16,000 a year later as rising interest rates, a string of crypto bankruptcies and the collapse of FTX battered the market. The drop topped 75%. Earlier cycles produced drawdowns of 80% or more.
Past rebounds could be just as extreme. Bitcoin rose from less than $4,000 in early 2019 to almost $69,000 in 2021. It then climbed from its 2022 low to more than $100,000 after U.S. spot bitcoin exchange-traded funds (ETFs) opened the asset to a much larger pool of investors.
Before the ETFs, bitcoin ownership tilted more heavily toward retail investors, crypto-native funds and traders making tactical bets, Rasmussen said. ETFs gave financial advisers and other professional investors a familiar way to add bitcoin to traditional portfolios.
🔸 Those investors tend to approach bitcoin differently.
Rasmussen said a professional investor might allocate around 2% of a portfolio to bitcoin, while crypto-focused retail investors can have 20%, 30%, or more of their money tied to the asset.
“If it goes down 50%, my portfolio is only down 1%,” Rasmussen said in an interview, describing how an investor with a 2% allocation might view the decline.
There is also rebalancing. An adviser targeting a 2% bitcoin allocation may buy after a steep decline to bring the position back to its target weight. If bitcoin surges and reaches 5% of the portfolio, that same investor may sell some at the next rebalancing.
