Bitcoin Faces a Challenging Q4: The Second-Worst Performance in History

Bitcoin is poised to experience its second-worst fourth quarter (Q4) on record, following only the severe downturn of 2018. Despite typical Q4 gains, 2025 has proven to be worse than previous years, leaving investors feeling demoralized after a difficult year.

Key Takeaways

Bitcoin is headed for its second-worst Q4 ever, following 2018 as the worst year.
Historically, Q4 averages a return of 77%, but Bitcoin has dropped nearly 23% this year.
The decline in Bitcoin's value has erased mid-year gains, contributing to investor anxiety.
A lack of buying from key market players is a contributing factor to this downturn.

Bitcoin Faces a Challenging Q4: The Second-Worst Performance in History

Current Situation of Bitcoin

Bitcoin, the leading cryptocurrency, is on track to record its second-worst Q4 in history, a stark contrast to its performance in 2018, which remains the lowest point. Although the difference between the two years is substantial, 2025 is still significantly worse than other tough years like 2014, 2019, and 2022. This year’s experience has moved Bitcoin from what might be seen as a "mild correction" into "crash" territory.

Historically, Q4 has been the strongest quarter for Bitcoin, with an average return of 77%. Investors typically rely on this time frame to bolster their yearly performance. Unfortunately, with a staggering decrease of nearly 23% in 2025, Bitcoin has underperformed its historical average by roughly 100 percentage points (a drop from an expected +77% to a realized -23%).

Unlike the usual positive returns that Bitcoin holders anticipate during December—such as the significant gains of +479% in 2013 and +168% in 2020—this year has brought substantial losses. The year began poorly and seems to be ending on an even worse note, which is demoralizing for many investors. The considerable gains made in the middle of the year, particularly in Q2, have been almost entirely wiped out by Q4 losses. Finishing the year with a crash affects investor confidence and reinforces the idea that Bitcoin and the broader crypto market are in a long-term downward trend.

Bitcoin initially entered Q4 with promise, hitting a new all-time high of nearly $126,000 in early October. However, the situation deteriorated quickly. A report from CryptoQuant in December 2025 points to "demand exhaustion" as a key factor behind this downturn. The crucial market participants that fueled the rally of 2024-2025, including spot ETF buyers and corporate treasuries, have stopped making purchases. Additionally, there have been numerous reports of large-scale investors (often referred to as "whales") exiting the market. As many traders who invested in November were hoping for a year-end rally, they now find themselves caught in a disappointment.