The state of Bitcoin in Q3 2025

Summary

Traditionally, summer is a quiet time for financial markets - and Bitcoin is no exception. The third quarter is historically the most sluggish of the year, often marked by a dip in activity and sluggish volumes. However, 2025 has bucked the statistics. While July is usually a favourable month (+7.6% on average), followed by a more difficult August and September (recording +1.12% and -3.12% respectively), the dynamic was more contrasted this year: +8% in July, -6.7% in August, then a rebound of +5.4% in September.

The quarter began on a euphoric note. Bitcoin broke through the symbolic $120,000 barrier for the first time on 14 July, reaching a closing record of $123,360 on 13 August. The second half of the summer, however, marked a consolidation phase, despite favourable news, notably the opening up of US 401(k) retirement plans to digital assets.

A 12.2% correction occurred after the Fed meeting in September, bringing the price back towards $109,000, before Bitcoin found a new equilibrium point between $108,000 and $124,000: the widest price range ever seen for a third quarter.

This quarter will therefore have been one of a resilient market, supported by a favourable macro environment and continued flows into ETFs, but weakened by massive profit-taking by long-term investors. Despite the tremors, Bitcoin has consolidated its role as a major institutional asset - a hedging tool against currency depreciation.

Highlighted news from Q3

👉 A new all-time high

The third quarter opened with a spectacular surge in Bitcoin. After forming a double bottom around $101,000 in June, the market staged a rapid rally driven by massive inflows into ETFs. On 13 July, the price reached an intraday high of $123,153, before closing at $119,863. A short consolidation phase between $117,000 and $120,000 followed, preceding a correction of around 4%.

On 13 August, Bitcoin signed its all-time closing high at $123,365, boosted by two catalysts: the prospect of a round of interest rate cuts by the US Federal Reserve and the announcement of a major regulatory change for US pensions.

👉 401(k)s open up to Bitcoin

One of the major turning points of the quarter came with the Presidential Executive Order of August 2025 allowing US pension funds (401(k)s) to invest in "alternative assets", including Bitcoin. This decision, supported by a softening of the Department of Labor's position and pending legislative proposals, marks a symbolic step towards the integration of Bitcoin into the long-term savings of American households.

The implications remain cautious, however: plan managers will have to justify the soundness of their investment choices with regard to the prudence rules of the ERISA regime. In addition, custody and reporting infrastructures will have to be beyond reproach. Initially, most 401(k)s will probably offer indirect exposure, via self-managed brokerage windows and limited allocation limits. Bitcoin is therefore becoming an accessible asset, but still reserved for sophisticated investors.

👉 Core versus Knots: the technical debate intensifies

The quarter was also marked by a fundamental debate within the Bitcoin community. Version 30.0 of Bitcoin Core changed the transaction relay policy, allowing up to 100 kilobytes of arbitrary data in the OP_RETURN field.

Advocates of Bitcoin Knots - an alternative implementation - saw this as a shift towards using the blockchain as a generic database, to the detriment of its primary purpose as a peer-to-peer monetary system. Core's maintainers counter that filtering out "non-monetary" transactions would be inefficient and risk centralising validation.

This disagreement, which is eminently technical but reveals a philosophical tension over the very nature of the network, has boosted Bitcoin Knots' popularity. According to Coindance, nearly 22% of the network's public nodes are now running this version, compared with less than 10% a year earlier.

👉 Massive liquidations after the Fed

The FOMC meeting in September, marked by high expectations of monetary easing, triggered a sharp move in the markets. Many investors, overexposed to the upside via leveraged positions, were caught off guard by a "sell the news" reaction. In 24 hours, $3.3 billion of positions were liquidated, mainly on altcoins but also on Bitcoin, the price of which fell by around 4%.

Despite this episode of stress, the $109,000 zone once again served as a floor, confirming the robustness of technical support at this level.

Bitcoin ETFs: a quarter of contrasts

After a record second quarter, flows into Bitcoin ETFs slowed during the summer, overshadowed by the enthusiasm surrounding the new Ethereum ETFs. The quarter illustrates a clear rotation of capital: investors reduced their exposure to BTC in order to reposition themselves on other assets deemed more buoyant in the short term.

Inflows were vigorous in July, reaching $6.01 billion, before a sharp decline in August (-$749 million). In September, the trend was reversed again, with net inflows of $3.51 billion. The result was a volatile but generally positive quarter, marked by a 14.3% rise in assets under management, from $140 billion to more than $160 billion.

Over the period, average daily flows remained favourable, with around $135 million in net purchases per day.

The market's flagship product remains BlackRock's IBIT ETF, which alone captured 97% of the quarter's inflows, or $8.55 billion. Far behind, Fidelity recorded $316 million, while Grayscale's mini-trust attracted $430 million.

Conversely, some vehicles continue to lose capital: Grayscale's GBTC fund remains the main outlet for liquidity, and ARKB (Ark Invest's ETF) saw net withdrawals of $259 million.

This concentration underlines a dynamic that has already been visible since the launch of ETFs: institutional investors prefer the security, liquidity and reputation of the large traditional asset managers, starting with BlackRock.

The European Bitcoin ETP market remains much smaller than that in the US - around ten times smaller - but it is showing steady growth. Flows were positive every month of the quarter, peaking in September with $1.3 billion in net inflows, equivalent to all the growth in outstandings over the period.

The main issuers remain 21Shares, CoinShares, WisdomTree, Bitwise and VanEck. Of these, WisdomTree stands out as the most dynamic structure in 2025, with more than $1 billion in inflows since the start of the year.

Bitcoin underperformed other assets

Despite a rebound in September, Bitcoin underperformed most major financial assets in the third quarter. The asset ended the period with a modest gain of +7.8%, compared with +8.1% for the S&P 500 and +16.7% for gold, buoyed by a lower interest rate environment and demand for hedging against currency volatility. Only the Euro Stoxx 50 index underperformed (+4.3%).

This underperformance by Bitcoin was largely due to massive profit-taking by long-term holders, who sold around 480,000 BTC, equivalent to $93 billion at the average price for the quarter. This move weighed on the market just as flows into Ethereum and altcoins accelerated.

One of the clearest signals of the quarter was the fall in Bitcoin's dominance of the global crypto market: from 64.5% in July to 56.7% in September. This ebb reflects a transfer of liquidity to other ecosystems, notably Ethereum, where the launch of ETFs has rekindled institutional interest, but also to some more speculative assets that have benefited from the "risk-on" climate of the summer.

On the macroeconomic front, the equity markets were buoyed by a handful of large tech caps: Tesla, Palantir, Oracle, Nvidia and Broadcom in the US, as well as ASML and LVMH in Europe. The rebound in the M2 - an indicator of monetary expansion - and expectations of looser monetary policy fuelled the overall rise in risky assets, while Bitcoin consolidated.

Since the introduction of US tariffs on 2 April, Bitcoin has reacted in a similar way to equity markets. In the two months following the announcement, it lost around 3%, compared with 7% for the S&P 500. Over a 60-day period, however, BTC managed to outperform gold and the equity indices, confirming its profile as an asset with strong recovery potential once the shocks have been digested.

Bitcoin thus remains a barometer of global liquidity: it suffers during episodes of tightening or capital turnover, but retains its ability to bounce back faster as soon as the cycle eases.

Companies holding Bitcoin

The third quarter was not kind to listed companies holding Bitcoin on their balance sheets. On the face of it, their assets under management (AUM) rose by 14%, or around 140,000 additional BTC, but this increase masks a growing lack of investor interest in these vehicles. Market valuations have fallen, and net asset value premiums have compressed significantly.

Segment leaders Strategy (ex-MicroStrategy) and Metaplanet continued to accumulate. Strategy bought an additional 33,000 BTC (+5.4%), while Metaplanet almost doubled its reserves, adding 14,000 BTC in three months. Between them, these two companies account for more than a third of the total increase in reserves held by listed players.

But this buying frenzy has not translated into equivalent stock market performance. Most of these companies came under persistent selling pressure, linked both to massive short positions by hedge funds and a gradual disinterest on the part of retail investors. As a result, valuation multiples fell sharply.

Strategy shares ended the quarter down 13.2%, with a discount that reduced their valuation multiple to 1.2 times their undiluted net asset value (mNAV). However, the biggest falls were seen in the most 'expensive' companies of the first half: Metaplanet, whose multiple had exceeded 7 in the spring, is now down by more than 60%, as is Capital B, which had briefly reached ratios of 10 to 11 times net assets at the start of the year.

This correction marks a break: whereas these companies had previously outperformed Bitcoin itself, they have now underperformed the asset they hold, a significant trend reversal. Investors seem to prefer to hold Bitcoin directly rather than through these exchange vehicles, which are considered riskier and less liquid.

The appeal of "Bitcoin Treasuries" was based on their ability to offer implicit leverage on the price of BTC, while allowing exposure via a listed instrument. But this premium largely disappeared in the third quarter.

As institutional investors become more familiar with Bitcoin and professional custody solutions multiply, the opportunity cost of going through these companies becomes more apparent. As a result, the market is beginning to question the sustainability of these hybrid products, stuck between the status of a technology company and that of a simple holding vehicle.

Behaviour of Bitcoin wallets

This quarter revealed particular activity among the different categories of Bitcoin holders. A clear divergence emerged between large holders and long-term holders (those who have held the asset for more than a year).

The conventional wisdom that long-term holders are systematically whales - and vice versa - is wrong. Some corporate treasuries, having made large bulk purchases, have become large holders while owning the asset for less than 12 months.

Large investors holding between 1 and 10,000 BTC continued to accumulate throughout the quarter, despite massive selling. This group increased their holdings by around 100,000 net BTC, while smaller investors, mainly individuals, sold in a panic, reducing their supply by around 10,000 BTC.

What is particularly remarkable is that long-term holders - those invested for more than twelve months - sold massively during Bitcoin's two rises to new all-time highs in July and August. In total, they sold 490,000 BTC, while short-term holders, mainly treasuries and ETFs, added 510,000. Total sales volume was well over 490,000 BTC. However, long-term holders replenished some of their positions at lower prices, totalling 815,000 BTC.

Mining and the performance of mining companies

The financial results for the third quarter have not yet been published, but the available data confirms that mining companies had a favourable quarter.

The average cost of producing one bitcoin was around $98,200, for an average market price of $110,000, giving a gross margin of around 11%. Despite the increasing difficulty of the network, miners therefore maintained positive profitability.

The United States remains the main base for global hashrate, closely followed by China.

On the energy side, natural gas accounts for 37% of total consumption, ahead of hydroelectricity (17%) and nuclear power (15.8%). Intermittent renewable energies (wind and solar) still only account for 13.5%, illustrating the limits of their availability for continuous energy-intensive operations.

On the stock market, mining companies largely outperformed Bitcoin in the third quarter. The top five companies in the sector all posted gains, some of them spectacular. In the lead, Iris Energy (IREN) saw its share price jump 240%, tripling in value. Behind it, TeraWulf (WULF) gained 115%, while Core Scientific (CORZ), Riot Platforms (RIOT) and Marathon Digital (MARA) posted rises of 31%, 29% and 5.8% respectively.

This outperformance is explained by a major strategic change: diversification into artificial intelligence and high-performance computing (HPC). A number of miners are now investing in infrastructures capable of executing intensive computing tasks for AI, which are much more profitable than pure mining.

This shift has accelerated thanks to more favourable financing conditions: lower interest rates have facilitated convertible bond issues to finance this transition. In September, IREN raised $1 billion via this type of instrument, while WULF issued $3.2 billion in senior debt to support a hybrid "mining + HPC" model.

Revenues from these computing activities reach 3 to 5 times those from traditional mining for the same volume of energy, with EBITDA margins in excess of 70%. This dynamic has transformed the perception of the sector: mining companies are now seen as technology companies capable of monetising computing power, beyond Bitcoin alone.

The Bitcoin Mining Companies Index (top 5 by capitalisation) has not only outperformed BTC, but also the Bitcoin Treasuries Index, illustrating the swing in leadership within the ecosystem.

While Bitcoin and reserve-holding companies suffered from profit-taking and valuation compression, miners emerged as the winners of the quarter, boosted by the convergence between crypto and artificial intelligence.

The Big Whale's analysis

Despite underperforming equities, gold and altcoins, Bitcoin remains up 22% year-to-date, in line with its historical average annual growth rate of 25-30%. Above all, the third quarter will have been marked by the largest episode of profit-taking ever seen, a sign that long-term investors are continuing to follow the market closely and arbitrate according to purely financial considerations.

This rotation phase was followed by a brutal shock: on 10 October, the market experienced the largest wave of liquidations in the history of digital assets, wiping out several billion dollars' worth of positions. Selling pressure was further heightened by the continuing crisis in US regional banks, causing a weekly close below the cost line for short-term investors.

This line, often considered the "bull market support", is a key indicator: when it gives way, the bull cycle can enter a phase of running out of steam.

Is this the end of the bull run? It's hard to say. The macroeconomic context remains paradoxical: monetary easing, traditionally favourable to risky assets, has not produced the expected effects. Investors are arbitraging between real assets, gold and bonds, in an environment where liquidity remains abundant but visibility reduced.

Even gold has corrected by 7% after its all-time high in early autumn, adding to the confusion.

This widespread volatility reflects a period of uncertainty in which the market is seeking a new balance between anticipation of monetary easing and fear of a global recession.

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