The year 2025 is history—and what a year it was! Contrary to all the doom and gloom, the markets once again delivered overall, while the German real economy continued to search for direction, which politicians were unwilling to provide. While the German economy remained virtually stagnant in 2025, its third consecutive year of sluggish growth, investors were celebrating.
The decoupling of the real economy’s gloom and the financial sector’s boom not only continued in 2025, but accelerated. The performance of a stock index remains a poor indicator of the development of an economy. The 40 companies listed on the DAX underperformed overall, but they operate globally and some of them generate only a very small percentage of their sales and profit margins in Germany. At times, the markets rose from all-time high to all-time high, but they were also good at causing sharp corrections.
When we started in January 2025, there was great fear of US punitive tariffs and persistent inflation. What followed was an AI boom and an arms race, as well as a run on precious metals. Twelve months later, we look back on a year that is likely to go down in stock market history as the “year of the interest rate turnaround.”
Stock indices strong again
After the German benchmark index broke through the 20,000-point mark in 2024, but only exceeded it sustainably last year, the German stock market barometer posted a hefty gain over the course of the year. On the last trading day of 2025, the stock market closed the year at 2:00 p.m. with a score of 24,490 points.
Those who had invested in the DAX before the start of the year were thus able to enjoy a substantial price increase of a good 24%. This is the third record year in a row with above-average growth. Overall, there were 34 record highs in the last twelve months, most of which were marked in the first half of the year – the highest at 24,769 points. It is quite possible that we will see the 25,000-point mark in 2026.
Nevertheless, Germany remains the problem child of the eurozone, because while companies such as SAP, Siemens, and reinsurers were chasing records, German gross domestic product (GDP) hovered around zero with a minimal increase of 0.1% to 0.3%.
Compared with the US benchmark index, the Dow Jones Industrial Average, the DAX actually performed even better. Its US counterpart rose by only around 14% over the year, and even the technology-heavy Nasdaq 100 achieved an annual performance of just under 21%, while the S&P 500 on Wall Street climbed by around 18%. This euphoria was dampened by the strengthening euro. Investors in the US saw significantly lower dividends and price gains due to currency losses.
Above all, the AI boom, Donald Trump’s tariff escapades, and interest rate cuts by major central banks regularly caused prices to jump up or down. In the eurozone alone, key interest rates were cut four times.
Bitcoin: Ups and downs
The price of Bitcoin has also been characterized by several ups and downs this year. After the most important reserve currency broke through the six-figure mark for the first time in December 2024 and surpassed the magical $100,000 mark, it rose again in the summer to a new record high of over $126,000. This would have corresponded to a respectable annual gain, but in the last weeks of the year, the crypto market ran out of steam and a sharp correction followed.
Most recently, the price of Bitcoin settled in the range between $87,000 and $90,000, which corresponds to a 5% decline compared to the previous year. Massive inflows this year came mainly from institutional investors, with the spot ETFs introduced in 2024 also causing sharp declines. Overall, liquidity and volatility remained low, while investor participation remained high.
Our personal return
After suffering heavy losses of well over 20% at the height of the coronavirus pandemic and then posting significant gains of 25.4% last year, Bitcoin and the strengthening euro threw a spanner in the works in 2025. In the end, we were left with a slight loss of around 4%, which was reduced to around 2.5% after deducting all income. By reinvesting this and smaller savings rates in the most important cryptocurrency, we were able to increase our holdings and continue to operate at a high level. However, we were far from beating the market.
Although monthly dividend payments continued to rise, the conversion factor to the euro meant that we ended up only slightly above the previous year’s level. There were a few months in which we had a low cash flow compared to the previous year, but December made up for this shortfall – we have never recorded as much dividend and interest income as in December 2025.
From a financial perspective, 2025 was a very solid year. The transfer of our securities account back to Scalabe Capital was completed smoothly over the course of a weekend, and our Bitcoin savings plans are now exclusively managed through Strike.me, with regular transfers to our hardware wallet – naturally taking into account proper UTXO management. The financial burdens imposed by the tax office have been overcome, and we can slowly ramp up our savings rate again, although the sharp rise in the cost of living is dampening this euphoria somewhat. Unlike minimum wage earners, there was no salary adjustment, which meant that our purchasing power steadily declined. That too must change in 2026. We are participating in the wage-price spiral.
The biggest lesson learned: as the size of the portfolio grows, the influence of the savings rate steadily decreases. Although we did not take on any new money in 2025, with the exception of a few very small investments in Bitcoin, our assets continued to grow, especially in proportionate terms.
