2025 has overturned the familiar patterns of asset performance. Cryptocurrencies entered a prolonged phase of decline and consolidation, ultimately ranking among the worst-performing assets of the year. Meanwhile, traditional assets unexpectedly emerged as the biggest winners. Silver and gold delivered exceptional returns, while US stock indices maintained steady upward momentum. This divergence highlights a critical industry issue: in 2025, cryptocurrencies lost their status as defensive or even alternative assets, reverting to the high-risk category.

**Precious Metals and US Stocks "Compete" for Capital, Cryptocurrencies Fizzle Out** Precious metals were the strongest performers in 2025, intensifying competition with cryptocurrencies for capital seeking safe havens during uncertain times. Silver prices surged by approximately 140% over the year, while gold rose by about 70%, both reaching record highs. This rally was structural—expectations of loose monetary policies and geopolitical risks drove investors toward assets with straightforward value preservation. Amid widespread uncertainty, investors increasingly favored historically stable, well-regulated, and highly liquid instruments. Accessibility also played a role: gold and silver could be easily purchased via exchange-traded products (including ETFs), whereas tokenized real-world asset (RWA) solutions in the digital space remained underdeveloped. This lowered entry barriers for some investors and bolstered demand for precious metals.

Limited supply, coupled with industrial demand—particularly from solar and electric vehicle sectors—further propelled silver prices. Safe-haven demand and balanced supply-demand dynamics didn’t just support silver; copper also gained around 37%, underscoring 2025’s broader trend: markets favored assets backed by tangible demand.

**US Stocks Outperform, Cryptocurrencies Falter** If US stocks and cryptocurrencies moved in tandem in 2024, 2025 revealed stark contrasts. US equities closed the year with positive returns, while most cryptocurrencies ended in the red. Year-to-date, the Nasdaq rose 19%, the S&P 500 gained 17%, and the Russell 2000 advanced 14%. Cooling inflation and rate-cut expectations buoyed markets, while the AI investment cycle attracted additional demand for tech stocks.

For cryptocurrencies, this backdrop explained a reallocation of risk capital. Investors increasingly accessed assets through highly liquid, regulated exchange-traded instruments. In this context, equities appeared more attractive in terms of risk-reward balance, while cryptocurrencies—after a strong start—failed to sustain inflows.

**Cryptocurrencies: A Promising Start, Then a Retreat** Early in 2025, the crypto market seemed nearly perfect. The launch and scaling of US spot Bitcoin ETFs triggered robust inflows, pushing Bitcoin to new highs and reviving talk of a "new cycle." For a brief period, cryptocurrencies regained their status as contenders for capital against traditional markets. However, the second half brought a reversal. The ETF effect faded post-launch, exposing vulnerabilities: fragile liquidity, elevated regulatory risks, and an unfavorable macro environment for aggressive risk-taking. As a result, cryptocurrencies entered a correction phase, while capital flowed toward more predictable assets.

Precious metals and related ETFs, alongside US equity index-tracking funds, took center stage, benefiting from expectations of monetary easing. Meanwhile, the crypto industry’s focus shifted: the most resilient assets weren’t "pure" cryptocurrencies but RWAs and products linked to real-world assets and cash flows.

**Bitcoin: Under Pressure** For Bitcoin, 2025 was a rollercoaster. Early in the year, the US spot ETF launch drove it to record highs, providing a legitimate on-ramp for previously sidelined capital. Even during the "Liberation Day" tariff-induced market slump, Bitcoin briefly served as a "defensive" asset, partly due to Trump’s crypto-friendly stance. Yet, Bitcoin’s typical pattern reemerged: news-driven rallies gave way to profit-taking and consolidation, with no sustained momentum. At press time, Bitcoin traded around $88,000—down ~6% year-to-date, signaling that even with ETFs, weak overall risk-asset demand couldn’t guarantee growth.

**Ethereum: Lacking Catalysts** Ethereum failed to convert its technological edge into price gains, dropping ~12% in 2025 to ~$3,000 from spring highs. Unlike Bitcoin, which benefited from institutional demand via ETFs, Ethereum lacked similar catalysts. Network upgrades and its central role in DeFi/Web3 infrastructure remained important, but in a low-risk-appetite environment, these weren’t enough to attract investors. Capital flows hinged on liquidity, regulatory clarity, and accessibility—not tech advancements. Competition for attention also intensified, with some activity shifting to Layer 2 solutions and alternative blockchains, while Ethereum itself was increasingly viewed as infrastructure lacking short-term investment appeal.

**Altcoins: The Weakest Link** Altcoins were crypto’s worst-performing segment in 2025, with average losses of ~42% and total market cap nearly halving. Investors systematically shifted toward more liquid instruments. Even strong narratives—like ecosystem activity, speculative waves, or DeFi/RWA infrastructure roles—failed to reverse the downtrend. Illiquidity and reduced risk appetite outweighed fundamentals, accelerating outflows. Altcoins’ heavy reliance on excess liquidity and optimism made them the year’s biggest underperformers when both vanished.

**Why Cryptocurrencies Underperformed in 2025** Cryptos’ struggles weren’t due to fading interest in the technology but shifting market criteria. In high uncertainty, capital flowed toward assets with predictable liquidity and clearer risk profiles—categories where cryptos still lagged. Second, early-year ETF momentum waned; exchange-traded products alone couldn’t sustain demand. Without stable new inflows, markets turned to profit-taking, redirecting attention to more transparent sectors. Third, altcoins’ internal weaknesses—despite short-lived hype around Solana, meme coins, or altcoin-linked ETPs—left them vulnerable. Regulatory and technical risks further reinforced preferences for other assets.

Ultimately, 2025 was the year cryptos failed to demonstrate superiority over other investments in key parameters for large capital: demand stability, liquidity, and risk predictability. A 2026 recovery hinges on macroeconomic improvement and revived risk appetite—but only if stricter standards for instrument quality and demand structure are met.