💡 Is Bitcoin Broken?
Every major asset on earth is up since October. Bitcoin is down 40%. The reason it's lagging has a long and very repetitive history.
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A quick disclosure before we begin.
You know I never hide the ball, so here it is, plainly. I co-manage the Bitcoin Opportunity Fund, and I sit on the board of Strive Inc (NASDAQ: ASST), a Bitcoin treasury company. I personally own Bitcoin, along with shares and securities of several companies you will see named in today’s letter, including Strategy (MSTR), Strive (ASST), and the preferred shares STRC and SATA. The fund holds some of these names too.
So when I write about Bitcoin, or about the treasury companies built on top of it, read it knowing I have real skin in this game. I want that on the table before you read another word.
And none of what follows is investment advice. I cannot tell you what to do with your money, and I never will. Everything here is for education, and for thinking a little more clearly about the world. The decisions are yours. Do your own work, and where it counts, talk to your own advisor.
Now, let’s get to it.
Today’s Bullets:
📉 The Great Disconnect
🔥 The Hot Ball of Money
💎 What the Strong Hands Are Doing
🦅 Where This Goes From Here
Inspirational Tweet:
Unless you’ve been completely unplugged from investing and the markets for the last six months, you know that just about every major asset on earth has been on an absolute tear.
The Nasdaq, S&P 500, Mag 7s, gold, silver, Korean stocks, Japanese stocks…you name it, it’s up.
Everything, of course, except Bitcoin.
That asset is actually down nearly 40%.
And like today’s inspirational post from Bull Theory says, people are starting to wonder what the heck the problem is with Bitcoin.
Believe you me, I’ve had moments of wonder myself. Let’s be honest, watching this thing bleed for six straight months has been a bit exhausting.
Bloomberg headlines read like a coroner’s report. Twitter/X replies are wall-to-wall people calling for zero or declaring it a Ponzi-scheme ready to implode. Even some of the battle-worn diehards are quietly wondering if this time really is different.
So let’s say the quiet part out loud. Why is Bitcoin the only thing in the red while the entire world rips higher? Is someone or some funds manipulating it? Or worse, is it actually broken? And the question underneath all of it, the one that’s actually keeping you up at night: if you own it, should you be worried?
All good questions, and ones we will answer, nice and easy as always, here today.
So, pour yourself a big cup of coffee and settle into your favorite seat as we dig into and diagnose just exactly what has been going on with Bitcoin in this Sunday’s Informationist.
Partner spot
After 17 years, bitcoin is still widely misunderstood. You get it, but what about the bitcoin blind spots you don’t know you have?
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For the friend or family member who won’t sit through 12 lessons, We partnered with Atlantic Re:think to make a short film for the curious featuring Natalie Brunell, Natalie Smolenksi, and our CEO Joe Kelly. Not the crypto story. The bitcoin story.
📉 The Great Disconnect
To begin our Bitcoin diagnosis, we need to go back to the date that I believe was the start of it all.
You guessed it. October 10th. At the start of that day, Bitcoin was trading at $121,717. By the end of the day, it had crashed to $104,998 before settling to close at $113,014.
Good golly, Miss Molly.
We will get to what happened that day and the reasons behind it, but first let’s look at what has happened since.
Not a whole lot of winning, that’s for sure.
I mean, today Bitcoin is sitting at $73K. That’s a drop of about 40% in just over six months. Measured all the way from the top, the peak-to-trough drawdown is about 52%.
Now set that next to everything else.
Gold, higher. Silver, even after its pullback has been on an absolute rocket. The Nasdaq and the S&P, printing new records. Small caps, the Mag 7, Korean and Japanese stocks, all of it green, and some of it green in a way we haven’t seen in years.
One red line of Bitcoin. The rest of the screen, green.
And you know how it works in investing, especially with retail and mainstream media. The negativity eventually feeds on itself. Every down week becomes a whole new batch of “Bitcoin is dead” headlines. Every bounce that fails becomes fodder for the critics and skeptics. Yahoo and CNBC wheel out the same guy who’s been calling Bitcoin to zero for as long as anyone can remember.
You know who I’m talking about. This guy.
In any case, we’re not going to get into the gold versus Bitcoin debate here. We know exactly what Peter’s motivation has always been, and we know he’s just full of Schiff.
But Bitcoin has given him plenty of ammo lately. The lower it goes, the louder the bears get, the heavier the fatigue sets in, and the more the good information gets buried under garbage takes. A whole lot of disinformation dressed up as analysis. And right now, it’s everywhere.
But step back from the noise for a second.
Price is kind of a funny thing. It tells you exactly what happened and absolutely nothing about why. A 40% collapse and a 40% rotation look identical on a chart. They feel identical in your gut. Telling the two apart takes some skill and usually some experience.
It’s a bit of a game, really.
Because money has to go somewhere. It never sits still. When Bitcoin fell 40% while gold, silver, and every AI stock on the planet went vertical, that same pool of capital was doing exactly what it always does. Moving. Chasing. Piling into wherever the game looked hottest.
So before we even get to whether Bitcoin is broken, we have to answer a much simpler question first.
Where did all that money actually go?
When we answer that, we will have a much better idea whether this is something to genuinely worry about, or just something to wait out.
So let’s dig a bit, shall we?
