1. A Bear Market Without a Black Swan - Bitcoin’s recent bear market wasn’t defined by a single catastrophic event. There was no exchange collapse, government ban, or sudden financial crisis that investors could point to as the obvious cause. Instead, the decline appeared to result from a confluence of factors that gradually weakened demand and increased selling pressure.
Large bitcoin holders began selling, while Strategy—one of the market’s most prominent and consistent buyers—also became a source of selling pressure. That initial supply was followed by additional selling as bitcoin declined, with some investors taking profits, reducing risk, or simply becoming less willing to buy into a falling market.
At the same time, the macroeconomic backdrop remained challenging. The Federal Reserve held rates at restrictive levels and continued to strike a hawkish tone, limiting expectations for the easier monetary conditions that typically support risk assets. The odds of the CLARITY Act passing appeared to decline, while renewed concerns about the potential long-term implications of quantum computing added another source of uncertainty.
None of these developments alone was necessarily large enough to explain the bear market. Together, however, they created a persistent drag on sentiment. Supply continued to come to market, buyers became increasingly cautious, and the positive catalysts investors had been anticipating were repeatedly delayed or called into question. In that sense, this bear market was less like a sudden crash and more like a war of attrition.
2. When Intervention Becomes the Policy - One potential catalyst for bitcoin’s next bull market may come from an increasingly familiar source: government intervention. As government debt continues to grow, the cost of servicing that debt becomes increasingly sensitive to interest rates. This creates a powerful incentive for policymakers to keep borrowing costs manageable, whether through traditional monetary policy or more direct efforts to support the Treasury market.
Recent discussions around purchasing longer-dated Treasury bonds to help drive interest rates lower have raised the possibility of what some investors are calling “synthetic QE.” Whether such policies are formally classified as quantitative easing may matter less than their ultimate effect. If government actions are designed to support Treasury markets, suppress borrowing costs, or provide liquidity when financial conditions become too restrictive, markets may begin to anticipate increasingly interventionist policies whenever pressure builds.
The challenge is that these interventions do not exist in a vacuum. Rising debt, continued government spending, and growing entitlement obligations all increase the pressure to find ways of financing an ever-larger fiscal burden. Over time, investors may increasingly conclude that some combination of higher debt, lower real interest rates, and gradual currency debasement is the most politically viable path forward.
This is where bitcoin’s investment case becomes particularly relevant. Governments can issue more debt, and central banks can create more currency, but bitcoin’s supply cannot be increased in response to economic or political pressure. Its supply is capped at 21 million units and its monetary policy is enforced by a decentralized network rather than the decisions of policymakers.
Government intervention will not automatically trigger future bitcoin bull markets. But if investors increasingly recognize that rising debt and economic pressures are likely to be met with continued intervention and easier financial conditions, demand for assets with credible scarcity could grow. In an environment where governments retain the ability to create more money, bitcoin offers something fundamentally different: a monetary asset whose supply cannot be expanded precisely when the incentive to do so is greatest.
3. How Much Should You Have - Bryan went on air last Friday to talk about the recent price action and what the most important thing investors need to do right now. If you don’t have any Bitcoin, contact us about how to start a position. If you have some, you need to check the percentage and ask yourself if you should be increasing. Over the past 8 years, position sizing has been the routine question we’ve been asked and a vital service we’ve been providing our clients. Check out the video below.
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