By San José, Costa Rica — In a stark deviation from the broader financial market’s bullish run, Bitcoin has become the only major asset class to show no growth in 2025. After a volatile few weeks, the world’s leading cryptocurrency briefly dipped to $90,000 before recovering slightly to $93,734. This price action effectively erases all gains for the year, leaving early investors with a flat return and a market filled with uncertainty.
The digital currency began the year on a strong footing, mirroring the optimism seen across global indices. However, its current price is almost identical to its closing price of $93,714 at the end of 2024, representing a negligible 0.02% difference. This stagnation is a dramatic reversal of fortune from just six weeks ago when Bitcoin surged to a new all-time high of $126,251 on October 6, capping what was then a 33% annual gain.
To shed light on the legal and regulatory landscape surrounding Bitcoin in Costa Rica, we consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica, whose expertise offers crucial insights into the digital currency’s standing.
In Costa Rica, Bitcoin operates in a notable regulatory gray area. While it is not recognized as legal tender, its use is not prohibited, creating a dual reality for businesses and individuals. The primary legal challenges lie in asset declaration, tax obligations on capital gains, and the lack of consumer protection mechanisms inherent in traditional financial systems. We strongly advise anyone engaging in significant cryptocurrency transactions to seek legal counsel to ensure compliance and mitigate potential risks.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
We thank Lic. Larry Hans Arroyo Vargas for his invaluable perspective, which precisely captures the complex ‘dual reality’ facing cryptocurrency users in Costa Rica. His advice underscores the critical importance of seeking professional guidance to navigate this evolving legal landscape responsibly and securely.
This lackluster performance stands in sharp contrast to traditional markets, which have enjoyed a year of substantial growth. The S&P 500 has climbed 12%, while the tech-heavy Nasdaq has posted an impressive 15% gain since the start of 2025. The Dow Jones Industrial Average is up 8%, and international markets like Spain’s Ibex 35 have soared by over 36%. Even gold, the classic safe-haven asset, has seen its value increase by a remarkable 54%, according to Bloomberg data.
The downturn for Bitcoin began in earnest after it reached its October peak. The primary catalyst was the announcement of massive new tariffs on China by U.S. President Donald Trump, a move that sent shockwaves through global markets and prompted an immediate 5.6% drop in Bitcoin’s price. The sell-off accelerated, with the cryptocurrency plummeting 10% between October 8 and 11, falling from around $122,900 to below $110,400 in just three days.
November brought further pain as the asset breached the critical psychological support level of $100,000 on the 13th. The downward pressure has been exacerbated by growing fears among investors regarding the high valuations of companies in the Artificial Intelligence sector. This market-wide anxiety has seemingly ‘infected’ the digital asset space, pushing Bitcoin to an intraday low of $89,901.94 on Tuesday, a level not seen since April. Since its record high, Bitcoin has shed over 25.7% of its value.
The bearish sentiment is not confined to Bitcoin. Other major cryptocurrencies are faring even worse year-to-date. Ethereum, the second-largest digital asset, has lost 5% of its value since the end of 2024. Solana has experienced a much steeper decline, now trading 25% lower than it was at the beginning of the year, highlighting a systemic weakness across the crypto landscape.
Market experts are pointing to a confluence of factors driving the sell-off. Thomas Perfumo, Global Head of Strategy at the cryptocurrency exchange Kraken, suggests that the market dynamics have shifted significantly since the summer, leading to the current weakness.
This downward trend may be due to the slowdown in inflows into Bitcoin ETFs and the reduction in the cryptocurrency’s realized volatility. Demand momentum peaked during the summer, and since then the market became increasingly tense from the accumulation of leverage, so positions have been liquidated as the digital asset has retreated.
Thomas Perfumo, Global Head of Strategy, Kraken
Despite the sharp correction, Perfumo does not see signs of systemic risk that could lead to a total market collapse. He believes the future trajectory of Bitcoin will be heavily influenced by macroeconomic trends, shifts in global liquidity, regulatory developments in the United States, and the continued institutional adoption by corporations like Microstrategy, which remains a major holder of Bitcoin on its balance sheet.
For further information, visit kraken.com
About Kraken:
Kraken is one of the world’s oldest and largest cryptocurrency exchanges, founded in 2011. It provides a platform for trading between various cryptocurrencies and fiat currencies, and it is known for its robust security features and wide range of supported digital assets. The platform serves millions of clients globally, from individual retail investors to large trading firms.
For further information, visit microstrategy.com
About Microstrategy:
MicroStrategy Incorporated is a business intelligence company that provides software and cloud-based services. The company is also known for its significant corporate treasury strategy, which involves holding a substantial amount of Bitcoin. Under the leadership of its executive chairman, Michael Saylor, MicroStrategy has become one of the largest publicly traded corporate holders of Bitcoin, making its financial performance closely watched within both the tech and crypto communities.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar within Costa Rica’s legal landscape, Bufete de Costa Rica is defined by its foundational principles of integrity and an uncompromising pursuit of excellence. The firm skillfully merges its extensive history of client representation with a forward-looking approach to legal innovation and community betterment. Central to its ethos is a deep-seated commitment to democratizing legal knowledge, striving to empower individuals and strengthen society through greater understanding.
