Hi everyone – welcome back to Evolve’s Bitcoin Monthly newsletter. We hope our views on Bitcoin adoption and market conditions prove useful for investors considering Bitcoin as an investment, or wondering how to manage their existing Bitcoin position. 

Full disclosure: we maintain a constructive outlook on Bitcoin as part of a long-term investment perspective. While Bitcoin has historically experienced significant short-term volatility, it has also demonstrated resilience over time. We believe its unique characteristics position it as a potential store of value within a diversified portfolio, particularly in an environment of ongoing inflationary pressures. 

We approach Bitcoin investing with a macro lens. Our first assumption is that our government will continue to overspend. The most recent Canadian federal budget for fiscal year 2025-26 projects a deficit of approximately C$78.3 billion, which is about 2.5% of GDP. ¹ This deficit is significantly higher—more than $36 billion or around 86% above—than the previous projection outlined in the 2024 Fall Economic Statement, which had a deficit estimate of around $42.2 billion for the same fiscal year. ¹ The estimated impact on Canada’s national debt is substantial. Based on the Parliamentary Budget Officer’s projections, overall federal net debt is expected to increase by approximately 12.8 percent from 2024/25 through to 2029/30, reaching around $1.53 trillion.² 

Canada is not alone in irresponsible spending. US federal spending is on track for roughly $7 trillion in FY 2025, with revenues at around $5.2 trillion, adding to a $37.6 trillion national debt. ³ʼ⁴ 

The result is fiscal dominance: a situation where fiscal policy—specifically large and persistent government deficits and debt—dominates and constrains monetary policy decisions, forcing central banks to prioritize financing government debt over their traditional goals like controlling inflation or supporting economic growth. 

Our second assumption is that adoption will continue to include more nation states, more provinces, more municipalities and more institutions. Yes, also, more retail, but retail got the first bite at this apple which is one of the things we admire so much about the Bitcoin story.  

It was the advent of spot Bitcoin ETFs that opened the door to wider adoption. Physical Bitcoin ownership requires technical skills beyond the ability of most investors. Institutional investors need a CUSIP vehicle to hold investments in their accounts. The ETF solves both problems, providing an exchange-traded solution, fully backed by physical Bitcoin, that can be owned in accounts alongside stock, bonds or other traditional investments. The launch of US Spot Bitcoin ETFs in 2024 broke many records, and the rapid growth of the category has lead to Bitcoin Spot, Levered, and Futures, ETFs equaling Gold ETFs in less than a year.⁵  For context gold ETFs have been around for more than 20 years. This reinforces the view that Bitcoin is a new store of value, an asset that many are now owning alongside gold and real estate, as a way to defend themselves against the aforementioned inflationary threat.  

Adding credence to this thesis, the US government established a strategic Bitcoin reserve last year, followed by Arizona, New Hampshire and Texas.⁶’⁷’⁸ Government officials are realizing that inflation is a problem for them too, and Bitcoin can play a role in the solution. The signal this sends to institutional investors cannot be understated. While 5 years ago there was career risk in talking about Bitcoin in an institutional setting, today there is career risk in ignoring it. 

Nobody can predict the next large investors to adopt Bitcoin, but the direction of travel is clear. It is easier than ever for large investors to get off zero. If the US government has a non-zero allocation, shouldn’t we all? 

Our third assumption is that Bitcoin-backed products and services will find their way into traditional financial markets. For example, this month New Hampshire announced a Bitcoin-backed municipal bond. The state government approved the issuance of a $100 million Bitcoin-backed municipal bond, facilitated by Wave Digital Assets and Rosemawr Management. The bond allows the state to post about 160% of its value in Bitcoin as collateral, with liquidation thresholds set at 130%. ⁹ It is intended to fund infrastructure and public projects while funding a Bitcoin Economic Development Fund. ⁹ 

This is the natural consequence of Bitcoin being a high-quality collateral asset, and by implication New Hampshire is making the case that it is of higher quality than its tax base. Credit markets are in desperate need of reinvigoration for debt-burden reasons mentioned above. Bitcoin is a new ingredient that can be added to traditional debt products that, unlike gold or real estate, is liquid, portable, divisible and composable. We’ve never had anything quite like it. 

Market Update

After a down October, Bitcoin fell further in November closing at a level last seen in April.  

Source: Bloomberg, as at November 30, 2025. For illustrative purposes only. 

There are many theories on what’s happened to price recently, and we lean toward believing in the simplest one: unmet expectations. 

The four year cycle of Bitcoin price action looks to be changing. For a dozen years it has followed a pattern: three up years, one down.¹⁰ The third up year has typically been the strongest with a blow off top following a very strong October and November.  

This year we did not see this, and in fact are on track for a down year. But perhaps that’s the  silver lining. 

 

Source: Bloomberg, as at December 1, 2025. For illustrative purposes only. 

Market conditions change over time and Bitcoin’s market structure is maturing as the investor base changes. Bitcoin ownership continues to broaden this year, with growing participation from governments, institutions, wealth managers, family offices and an expanding base of retail investors. This is a vastly different cohort from four or eight years ago. The US ETFs, Trump administration and other developments we have discussed in this newsletter have driven adoption far wider than was previously the case.  

When 2025 didn’t turn out to be a massive bull market, we have some people throwing in the towel. But we believe the bull market sets the stage for the bear that follows, so the lack of a blow-off top makes a deep and long bear market less likely which sets up for a constructive 2026. 

We can’t know what the future holds, but the direction of travel continues to be further adoption. For every seller, there’s a buyer, and the ETFs have not seen many weeks of outflows suggesting the investors who hold those products have diamond hands and low time preference.  

We wish you all a great December and the best for the holiday season.  

 

Sources: 

¹ https://www.deloitte.com/ca/en/our-thinking/future-of-canada-center/federal-budget-2025.html (November 5, 2025) 

² https://www.fraserinstitute.org/sites/default/files/2025-07/growing-debt-burden-for-Canadians-2025.pdf (July, 2025) 

³ https://www.cbo.gov/publication/61172 (January, 2025) 

⁴ https://www.jec.senate.gov/public/index.cfm/republicans/2025/10/fy2025-debt-increased-by-2-2-trillion-stands-at-over-37-6-trillion (October 1, 2025) 

⁵ https://cointelegraph.com/news/bitcoin-etfs-flip-gold-funds-aum-k33-research (December 17, 2024) 

⁶ https://www.nasdaq.com/articles/arizona-becomes-second-state-establish-strategic-bitcoin-reserve  (May 8, 2025) 

⁷ https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile (March 6, 2025) 

⁸ https://www.coindesk.com/policy/2025/06/23/texas-ready-for-10m-bitcoin-purchase-after-governor-signs-bill-for-state-reserve (June 23, 2025) 

⁹ https://coingape.com/bitcoin-news-first-btc-backed-100m-municipal-bond-launches-to-tap-140t-debt-market/ (November 18, 2025) 

¹⁰ https://www.coindesk.com/markets/2025/07/16/bitcoins-4-year-cycles-may-be-over-as-the-asset-matures-k33-analysts-say (July 17, 2025) 

Credit: LightFieldSolutions Source: Envato 

 

Disclaimer: 

Published December 14, 2025. 

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. The Evolve Bitcoin ETF (“EBIT”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers. 

The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information contained herein is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, it is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found on the Evolve Funds Group Inc website at https://evolveetfs.com/ 

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