Bitcoin's market in 2025 presented a fascinating shift in dynamics, challenging traditional perceptions of supply and demand. As the year drew to a close, a distinct picture emerged where retail conviction, institutional caution, and the growing influence of derivatives reshaped the asset's price action and underlying market structure, setting a new stage for 2026.
Shifting Holder Landscape and Supply Dynamics
Throughout the latter half of 2025, a clear divergence emerged in holder behavior. Smaller wallets, specifically those holding under 0.1 BTC, demonstrated strong conviction, increasing their holdings by approximately 3.3% since July and consistently buying dips. In contrast, larger holders (10 to 10,000 BTC) showed more tactical behavior, adding only a marginal 0.36% over the same period, often trimming exposure as prices peaked. This retail-led accumulation, coupled with a continuous outflow of Bitcoin from exchanges—signaling a preference for long-term holding—created a unique scenario where supply conditions seemed disconnected from Bitcoin’s largely range-bound price action.
The Growing Influence of Stagnant Capital and Derivatives
A significant factor contributing to Bitcoin's subdued price performance, despite retail accumulation and exchange outflows, was the substantial amount of capital held in ERC-20 stablecoins. This "on standby" capital climbed through the second half of the year, indicating funds waiting within the crypto ecosystem but not actively deployed into spot markets. Simultaneously, trading activity increasingly migrated from spot markets to derivatives, where Open Interest (OI) became a crucial driver of short-term movements. This dominance of leverage-driven trading replaced organic spot demand with instability, leading to amplified price swings and forced position unwinds, particularly during late-year downturns. This shift fundamentally altered Bitcoin's market structure, making it increasingly susceptible to positioning and derivative-induced volatility rather than pure supply-demand fundamentals.
