Crypto Investors Feel Little Optimism Amid 22% Bitcoin Decline

The total market capitalization for cryptocurrency has climbed above $3 trillion.

However, this rebound “reflects exhaustion” and not a reinvigorated conviction in the crypto space, CoinDesk reported Tuesday (Dec. 23). Bitcoin is down more than 22% in the fourth quarter, which makes this one of the weakest closing quarters for the crypto market outside of major downturns.

The market’s recent strength is mostly technical and fueled by a low base following weeks of selling, FxPro Chief Market Analyst Alex Kuptsikevich said, according to the report.

“The crypto market is making a new attempt at growth, but this is not yet a recovery,” Kuptsikevich said, per the report, adding that there has only been a moderate improvement in sentiment.

The crypto market’s fear and greed index has risen to 25, a sign that traders may be moving away from extreme pessimism, yet still not embracing risk, the report said. While bitcoin was trading at close to $88,000 in Asia Tuesday, Kuptsikevich cautioned that short-term momentum could be misleading. Bitcoin is still 30% below its peak from this year, trading at levels seen at the beginning of 2025.

“Attempts to bring year-to-date performance back to zero are little consolation,” Kuptsikevich said, per the report, adding that disappointment has supplanted the optimistic mood of earlier in the year.

Meanwhile, stablecoins evolved this year as the economy surrounding these digital assets became “increasingly real, increasingly regulated and increasingly institutional,” PYMNTS reported last week.

That reality was illustrated by a series of developments from the sector, such as SoFi’s unveiling of an enterprise stablecoin and Coinbase’s rollout of a white-label stablecoin issuance product designed for corporations and banks.

The Federal Deposit Insurance Corp. undertook new rulemaking, an indication of a new era of regulatory clarity. PayPal introduced stablecoin financial tooling designed for artificial intelligence-native businesses, while Visa expanded its stablecoin settlement capabilities in the United States.

“Looming over it all, JPMorgan poured a bucket of cold water on market hype, stating it does not foresee a trillion-dollar stablecoin market any time soon,” PYMNTS wrote. “The banking giant, for its own part, likely prefers tokenized deposits to stablecoins.”