Bitcoin’s crashes are getting milder, and the reason is who owns it now
Bitcoin fell about 55 percent in its latest bear market, tame next to the 70 to 80 percent crashes of past cycles. Analysts say a new, institution-heavy owner base is smoothing the drops, and, less comfortably, the rallies too.
Published · 2 min read
Bitcoin’s latest downturn was, by bitcoin’s own violent standards, almost gentle. The asset fell roughly 55 percent from its October 2025 peak, according to CoinDesk. That would be a historic collapse in most markets, but bitcoin’s past crashes ran to 70, 80 percent and more, so a 55 percent drawdown counts as progress.
A growing view among analysts is that a maturing, institution-heavy market is reshaping the cycle. The catch, and it is a real one, is that the same forces cut both ways.
Why the drops are shallower
Bitwise’s head of research, Ryan Rasmussen, points to spot ETFs, which launched in January 2024 and brought in professional investors. Where a crypto-native retail holder might have 20 or 30 percent of their money in bitcoin, an adviser typically allocates around 2 percent, so a steep fall barely dents the overall portfolio and prompts far less panic selling.
“If it goes down 50%, my portfolio is only down 1%.”
Rebalancing reinforces it. An adviser targeting a 2 percent weight buys after a steep decline to top the position back up, and trims it after a surge. Mark Connors, chief investment officer at Risk Dimensions, expects that to keep drawdowns below the old 70 to 80 percent norm, while also producing, in his words, smaller blow-off tops. The upside gets capped along with the downside.
The dissent: maybe it is just size
Not everyone credits Wall Street. Schwab’s head of crypto research, Jim Ferraioli, is skeptical of the ETF explanation, noting that individuals buy the funds too, so ETF ownership is not the same as institutional ownership. He points instead to scale: near a $2 trillion market cap, bitcoin simply needs far more money to double than it did when it was worth a few billion, which naturally shrinks the multiples.
“I don’t know if I would necessarily agree with that take.”
The number everyone will quote
CryptoQuant’s Ki Young Ju put a figure on it, predicting a 3 to 5 times cycle rather than another 10 times parabola, followed by a milder bear market. That is a forecast, not a fact, and it deserves the same scrutiny we bring to any single data point, like an ETF inflow number.
Our take
The evidence that bitcoin’s drawdowns are shrinking is real and comes from several independent voices. The honest reading is symmetric: a maturing, rebalancing owner base likely means shallower crashes and less explosive rallies. Anyone selling the softer downside without mentioning the capped upside is telling half the story. This is information, not investment advice.