On paper, 2025 should have been a banger year for Bitcoin (BTC +1.46%).
Over the last 12 months, the Trump administration has supported the crypto industry with legislation and regulatory changes designed to help it break into the mainstream.
Bitcoin’s 6% decline in 2025 is a natural correction after the 125% rally it experienced in 2024.
The dollar index, which tracks the value of the U.S. currency compared to a basket of rival currencies, fell about 9% in 2025.
The dollar is losing value because of increasingly erratic trade policy, concerns about central bank independence, and perhaps even falling interest rates, which can make American fixed-income assets less attractive compared to the alternatives in other countries.
As a cryptocurrency, Bitcoin operates independently of individual national economies, making it an excellent way for U.S. investors to hedge currency risk in their portfolios.
The asset’s early-mover advantage and brand recognition have given it a reputation as “digital gold,” helping it stand out from the hundreds of other digital assets that can fill a similar role.
This year, precious metals like gold and silver have dramatically outperformed Bitcoin with gains of 65% and 160%, respectively.
The growth in silver is most notable because it follows the Chinese government’s decision to restrict exports of the essential industrial metal starting on Jan. 1, 2026.
The phenomenal performance of traditional precious metals makes Bitcoin look relatively lackluster, raising the question of why buy digital gold when you can buy the real thing?
But investors should remember that Bitcoin and precious metals are not necessarily rivals.
Furthermore, over a longer-term horizon, Bitcoin has dramatically outperformed gold with a five-year gain of 205% compared to the yellow metal’s increase of 124%.
The overall outlook for Bitcoin looks strong going into 2026.
Even though the benefits of the Trump administration were likely already priced in by the end of 2024, the policy changes could continue to encourage more institutional investors to enter the cryptocurrency market, helping support long-term growth and reducing volatility.
While Bitcoin isn’t a screaming buy in 2026, it still has a place in a diversified investment portfolio.
Donald Trump’s election turned out to be a buy-the-rumor, sell-the-news situation for the cryptocurrency industry.
After softness in 2025, can Bitcoin bounce back in 2026?
Let’s dig deeper to see what the next year might have in store.
Bitcoin posted a modest 1.46% gain in 2025, but a 6% pullback followed the 125% rally seen in 2024.
The dollar index fell about 9% in 2025, reflecting shifts in policy expectations and central-bank dynamics that can influence crypto valuations.
Against this backdrop, Bitcoin remains a potential hedge against currency risk, while competing with traditional assets such as gold and silver.
Regulatory shifts under the Trump administration introduced supportive legislation and policy changes designed to mainstream crypto investment and lure institutional capital, potentially reducing volatility over time.
The interplay between regulation and market demand suggests a constructive long-term trajectory for Bitcoin as part of a diversified portfolio.
Over longer horizons, Bitcoin outperformed gold on a five-year basis, rising 205% versus gold’s 124%.
This year gold and silver surged 65% and 160% respectively, with silver benefiting from China’s export restrictions on the metal.
While Bitcoin isn’t a screaming buy in 2026, its role in a balanced crypto exposure remains intact as investors reassess risk and seek non-sovereign stores of value.
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