Bitcoin's (BTC) momentum has completely shifted in the fourth quarter. While analysts once expected the coin to set new highs, many now doubt whether BTC can return to its previous peak. Forecasts are continuously being revised downwards as BTC 's performance weakens.
This is happening despite a generally favorable macroeconomic environment. Demand is cooling down, market strength is weakening, and investor confidence seems to be declining. So what has caused this change? BeInCrypto spoke with Ryan Chow, co-founder of Solv Protocol, to understand this shift and what Bitcoin needs to do to succeed in 2026.
How Bitcoin will attract and lose institutional demand in 2025.
Historically, the fourth quarter has always been Bitcoin's best period, with Medium returns reaching 77.26%. Expectations for 2025 are also extremely high as major financial institutions accelerate their entry into the market and more and more publicly listed companies choose to hold Bitcoin in their reserves.
But the market actually moved in the opposite direction. By the fourth quarter, Bitcoin had fallen 20.69%, completely reversing the trajectory of previous years – which were BTC's strongest period.
Bitcoin's performance by quarter. Source: CoinglassAccording to Mr. Chow, the beginning of 2025 will mark a strong wave of financial institutions entering the market.
“Spot ETFs, ETPs, and new policies have created a shockwave of accessibility. Large institutions are rushing to secure underlying investments in Bitcoin, and the influx of money into this market has driven prices up,” he Chia .
However, by the end of 2025, the picture changed. Chow said that large investors in the market had already invested enough of their positions , forcing Bitcoin to compete directly with traditional financial products that offered higher real interest rates .
Once cryptocurrencies stop consistently setting new highs, investment managers are beginning to reconsider why they should hold an asset that doesn't generate cash flow, while treasury bonds, corporate credit, or even AI stocks pay interest even when held passively.
“I think the market is facing a reality that has been quite clear for years: the passive holding strategy has reached its limit. Retail investors have gradually sold off, businesses have stopped accumulating, and financial institutions have also gradually withdrawn. This time, the reason isn't that they've lost faith in Bitcoin, but rather that the current market structure isn't attractive enough to warrant large Capital when interest rates are high,” Chow added.
Furthermore, this leader emphasized that the market structure of Bitcoin has also changed. After the ETF approval and Bitcoin underwent the halving event, it has become an overcrowded macro investment position. He pointed out that Bitcoin has moved from a revaluation phase to a profit-generating phase through advanced trading strategies, with professional traders dominating .
The simple theory that "ETF plus halving equals price increase" is no longer true. According to him, the next stage for Bitcoin's increased popularity will depend on its practical applications and the ability to generate a reasonable profit-risk ratio. He Chia with BeInCrypto that:
“The first half of 2025 will mainly revolve around accessibility, with everyone wanting to ensure they don’t miss out on the Bitcoin market. In the second half, we need to consider opportunity costs, as Bitcoin now has to compete with assets that pay interest on holding.”
Bitcoin, often XEM to as “digital gold,” has long been recommended as a hedge against inflation. Chow also acknowledges that the asset may still Vai as a store of value. However, he emphasizes that this narrative alone is not enough to attract institutional investors at the present time.
Experts reveal factors that will help Bitcoin regain institutional trust by 2026.
Chow warned that the market may be underestimating the extent of macroeconomic change in 2026. He argued that if Bitcoin does not transform into a profitable asset, it will remain merely a cyclical investment channel dependent on liquidation.
In that case, investment organizations would treat it as such, rather than choosing to hold it long-term in their strategic portfolio.
“Bitcoin can no longer rely solely on its narrative to win. It needs to generate profits, otherwise it will always be discounted by the market. The current volatility is also the market's way of forcing Bitcoin to mature,” Chow commented.
So what are the safe, legitimate, and profitable investment products that could attract institutions back in 2026? Chow emphasizes that the solution lies in investment strategies combining Bitcoin and cash in a tightly regulated environment, similar to traditional financial products with a clear legal framework, public audits, and transparent risk profiles.
He listed three main product groups:
- Cash plus Bitcoin investment fund: BTC is held in custody at eligible institutions and used with investment strategies in short-term government bonds or on- chain repos, aiming for an additional 2-4% annual return.
- BTC backed lending and repo products with excess collateral: Licensed products, Bitcoin-backed loans with reputable borrowers. Fully monitored on chain, low loan-to-value ratios, and a secure collateral structure in case of bankruptcy.
- Predetermined-profit options strategies: Examples include writing Call Option covered, packaged within familiar regulatory frameworks such as UCITS or funds compliant with Act 40.
Regardless of the product category, essential standards include: management by a licensed entity, clearly segregated accounts, transparent Proof of Reserves , and easy integration with the digital asset custody platform the organization is using.
“The products that can attract institutions back aren’t the most complex ones. They’ll be like Bitcoin-backed cash-plus funds, repo markets, and deterministic investment strategies – all familiar products with clear risk controls, only they’re powered by Bitcoin,” Chow Chia .
He also emphasized that large institutions don't need DeFi interest rates of 20% per year – this is often a warning sign of risk. A net annual return of 2 to 5% earned through transparent, collateralized strategies is sufficient to elevate Bitcoin from a "can-hold" status to a "core reserve asset".
“Bitcoin doesn’t need to become a super-high-yield product to retain the interest of the financial world. It just needs to move from 0% interest to a modest, transparent ‘cash-plus’ rate so that CIOs stop viewing it as dead Capital ,” Solv co-founder Chia with BeInCrypto.
What do Bitcoin yields actually look like?
Chow explains that the process of transforming Bitcoin into a profitable source of Capital will help this asset no longer be a "stagnant gold mine" but become a high-quality collateral asset to finance T-bills, credit, and liquidation across various platforms. In this model, businesses deposit BTC into managed blockchain asset vaults, receive profitable certificates in return, and maintain clear tracking of the underlying assets.
Bitcoin can also be used as collateral in repo markets, as margin for Derivative contracts, and as a platform for structured financial products, serving both on-chain investment strategies and traditional working Capital needs.
The result is a versatile tool: Bitcoin serves as a reserve asset, a fundraising asset, and a yield-generating asset all at once. This Vai is quite similar to that of current treasury bonds, but operates in a global environment, 24/7, and is programmable.
“If we do this well, institutions will no longer be talking about ‘holding Bitcoin’ but rather ‘leveraging Bitcoin to fund their portfolios.’ Bitcoin will become a neutral collateral asset, silently providing strength for T-bills, credit, and liquidation in both traditional and on-chain markets,” Chow stated.
Organizations want returns: Can Bitcoin deliver this without compromising its principles?
While these applications are very appealing, the question remains: Can Bitcoin support risk-adjusted yields on a large, controlled scale while maintaining its fundamental principles?
According to Chow, the answer is entirely possible, provided the market respects Bitcoin's layered structure.
“The base layer remains cautious; the profitable products and regulations reside in the higher layers with strong bridges and clear transparency standards. Bitcoin L1 remains simple and decentralized, while the profitable financial layer will be in L2, sidechains, or RWA chain where wrapped Bitcoin can interact with Tokenize treasuries and credits,” he emphasized.
The leader also acknowledged that there are still many technical challenges to address. The ecosystem needs to evolve from reliable multisig solutions to standardized bridges at the organizational level. Additionally, it requires building Bitcoin wrappers with 1-to-1 backing mechanisms and developing real-time risk management systems.
“The ideological challenge is even greater: after the CeFi incidents, skepticism is still very deep. The solution is to build radical transparency, proving reserves directly on the blockchain, transparently defining usage, and avoiding hidden leverage. Importantly, Bitcoin's profitability remains an option – keeping Bitcoin self-storing is still valid. We don't need to change Bitcoin's underlying layer to increase Capital efficiency. We need to build a disciplined financial layer above, a layer that institutions can trust and the cypherpunk community can still assess,” he further analyzed.
In short, Chow's message is clear: the next phase of Bitcoin will be defined by serious financial development, not just stories or speculation. If the industry can build transparent, regulated, and profitable structures without losing sight of Bitcoin's core principles, institutions will return, not as trend-following investors, but as long-term Capital allocators.
The path to 2026 will be based on practical applicability, credibility, and Bitcoin – where competitiveness will primarily depend on generating profitable returns on Capital .
