Bitcoin Heads for Fourth Annual Loss: What ETFs May Face in 2026

Bitcoin is on track for its fourth yearly decline this year, per Bloomberg, as quoted on Yahoo Finance. The cryptocurrency is down about 7% (as of Dec. 16, 2025) after a fresh selloff sent prices as low as $87,000. The cryptocurrency crossed the mark of $1,26,000 in October 2025. Year to date, it ranges from a low of $74,421 to a high of $126,296.

A Milder Drop, but a But Complicated One

Unlike prior down years, this pullback comes despite stronger institutional adoption, more mature regulation, and political backing from U.S. President Donald Trump. Even heavy buying from Strategy Inc. MSTR hasn’t stabilized prices. Note that Strategy Inc., together with its subsidiaries, operates as a bitcoin treasury company principally in the United States, Europe, the Middle East, Africa and internationally.

Is AI Fatigue Leading to This Crypto Winter?

Bitcoin’s fall from a record in early October has left markets struggling for direction. Trading volumes are thin. And why not? Bitcoin is probably still seen as a risky asset. Despite growing institutional acceptance, Bitcoin has shown a strong correlation with tech stocks. Note that the beta of iShares Bitcoin Trust IBIT (against the S&P 500) is as high as 2.77X. With a high beta, it presents potential for growth but also higher risk.

Concerns over AI overvaluation and doubts over the payoff from massive AI investments have occasionally weighed on the tech sector in recent months and likely pressured the crypto space as well. Moreover, cryptos have surged massively in the initial part of this year, making profit-booking natural amid an edgy investment backdrop.

An Extended Range-Bound Trading Ahead?

More than $5.2 billion has been withdrawn from U.S.-listed spot Bitcoin ETFs since Oct. 10, signaling investor skepticism. Maxime Seiler, chief executive at digital asset trading firm STS Digital, sees this cycle as a prolonged pause rather than a deep crash, with Bitcoin potentially trading between $70,000 and $100,000 for an extended period (per Bloomberg, as quoted on the same Yahoo Finance article).

Investors should note that Bitcoin mining requires a high amount of electricity. Globally, data centers and crypto mining together now account for around 2% of the world’s electricity and make up about 1% of global carbon output. If Bitcoin mining continues to expand, its share of carbon emission could rise further, raising questions about the sustainability of such growth in a net-zero world, per an article published on Carboncredit.com.

Availability of power is another factor, as the ongoing AI boom and power-hungry data centers are consuming vast amounts of energy. Now it is to be seen how much of the available power will be allocated to the crypto mining industry if it continues to grow relentlessly.

Mid-Term Election 2026: Can Trump Administration Flex Muscle?

Mid-term elections are scheduled to be held in the United States, in large part, on Nov. 3, 2026. A poll conducted by the University of Chicago for the Associated Press found that only 31% of citizens now approve of Trump's economic policies, down from 40% in March, as quoted on Economic Times. While the election is months away and the operating backdrop may totally change by then, any slide in crypto-friendly Trump’s popularity may limit Bitcoin’s rebound.

What’s Bitcoin’s True Worth?

Per an article published on CFA Institute, Bitcoin is often touted as digital gold. Both are fixed-supply, and counterparty-free assets. Today, gold has a market capitalization of roughly $11.5 trillion. If Bitcoin reaches a similar market capitalization, the price per coin would exceed $500,000.

But there is a string attached. Bitcoin is digital, decentralized, and free from government influence., which makes it riskier than gold and causes it to behave like a high-growth tech asset.

Bitcoin-Focused Exchange-Traded Funds (ETFs) in Focus

Against this backdrop, investors may take a close look on the ETFs like IBIT, Fidelity Wise Origin Bitcoin Fund FBTC, Grayscale Bitcoin Trust ETF GBTC, Grayscale Bitcoin Mini Trust ETF BTC, Bitwise Bitcoin ETF Trust BITB, ARK 21Shares Bitcoin ETF ARKB and ProShares Bitcoin ETF BITO.

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This article originally published on Zacks Investment Research (zacks.com).

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