Will the Bitcoin price recover?

Throughout the ten years to 2025, Bitcoin was the world’s best-performing asset.

In dollar terms the price of Bitcoin, the world’s largest cryptocurrency, increased by almost 27,500% between 10 November 2015 and 10 November 2025.

Analysis from VanEck shows that Bitcoin has been the best-performing asset in eight of the last 11 years, with returns of over 35,000% in the 10 years to 30 June 2025.

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According to analysis from crypto exchange Kraken, £1,000 invested in Bitcoin 10 years ago would be worth over £362,000 today.

Despite these gains, Bitcoin is a volatile asset, which adds to its perception as a risky investment.

Bitcoin fell from an all-time high price of over $126,000 on 6 October to below $100,000 less than a month later – a decline of 21.7% from peak to trough.

The price of Bitcoin is staging a recovery from these recent declines, having gained 2.7% to around $106,460 in the five days to 10 November, but over the past month Bitcoin has fallen 12.7% in dollar terms.

“As adoption deepens and regulation matures, Bitcoin is increasingly viewed not as a speculative trade, but as a structural component of modern portfolios,” says Thomas Perfumo, global economist at Kraken.

Some argue that Bitcoin is the money of the future, and that it has already become ‘the reserve currency of the internet’. But with many viewing Bitcoin as an inherently value-less asset, what drives its price movements, and should you invest in Bitcoin?

What is the investment case for Bitcoin?

Bitcoin has scarcity built into its design. A maximum of 21 million Bitcoins will ever be mined, and the rate at which new ones enter circulation halves approximately every four years (in an event known as the Bitcoin ‘halving’).

Around 17 November 2025, Bitcoin’s circulating supply will cross 19.95 million coins – 95% of its maximum possible supply.

“Programmable scarcity, coupled with predictable issuance and decentralised design, sets Bitcoin apart from competing forms of money and asset classes,” says Perfumo.

This scarcity, in theory, enables Bitcoin to act as a hedge against inflation that results from the inevitable debasement of fiat currencies.

“In the short term, Bitcoin's market price fluctuates with macro conditions that drive global markets, business cycles, liquidity trends, and investor sentiment,” says Perfumo. But over the long term he views that its design, permissionless access and increasing global adoption adds to its inherent value.

“It remains a natural hedge against fiat debasement and one of the few credibly neutral, globally accessible stores of value,” added Perfumo.

There is also an argument that Bitcoin can act as a diversifier in portfolios. Whilst this makes sense in theory, Bitcoin price movements are sometimes correlated with movements in US equity markets.

Data from newhedge shows that throughout 2025, Bitcoin prices have at times been negatively correlated with the S&P 500 (especially during June) but for most of the year they have had a reasonably strong positive correlation (often above 0.8, with 1 being perfect correlation) with the index.

Should you invest in Bitcoin?

Bitcoin is a divisive asset, and tends to provoke either strongly positive views from bulls who are ‘all-in’ on cryptocurrencies, or skeptics who steer well clear.

There is a middle ground between these extremes that sees Bitcoin as an asset that potentially has a role to play in a balanced portfolio just like any other.

One balanced approach might be to weight your Bitcoin exposure based on the rest of the market. Digital assets now account for 1.7% of the global listed market portfolio, as of 31 August 2025, and Bitcoin accounts for 56% of crypto market capitalisation.

Dovile Silenskyte, director of digital assets research at WisdomTree, argues based on this that allocating around 2% of your portfolio to Bitcoin is rational.

“Zero exposure is not caution, it is an active underweight against a quickly growing asset class,” said Silenskyte. “A measured 2% allocation has historically lifted returns while barely budging volatility.”

Silenskyte cited WisdomTree research that found a 2% Bitcoin allocation within a 60/40 global portfolio added 1.3% annual return for just 0.19% added volatility.

However, any investment decision should be made with consideration of the risks involved, your own personal circumstances and goals, and, if possible, in consultation with a financial adviser.

How to buy Bitcoin

The most basic means of gaining exposure to Bitcoin prices is to buy Bitcoin directly into a crypto wallet. This might require creating a specialised exchange such as eToro, Coinbase or Bitpanda. Note also that Bitcoin cannot be held in an ISA or a Sipp, so profits would be subject to capital gains tax (CGT).

You could buy a Bitcoin ETN (exchange-traded note) into a stocks and shares ISA – but note that you will be forced to sell any holdings here on 6 April (or move them into an Innovative Finance ISA, if you have one). A Bitcoin ETN works much like an exchange-traded fund (ETF), but it is a debt instrument that tracks the price of a particular asset, in this case Bitcoin.

There are no other means of gaining direct Bitcoin price exposure in a stocks and shares ISA, but you can gain some indirect exposure through crypto stocks such as Coinbase (NASDAQ:COIN) or a crypto ETF such as the Invesco Blockchain ETF (LON:BCHS). Funds like this tend to hold a selection of stocks that leverage or otherwise benefit from blockchain technology, which includes cryptocurrencies like Bitcoin.