This Week's Setup
Bitcoin is down 45% from its all-time high. Sentiment is awful. The haters are having a field day. And everyone's asking if the thesis is broken. It's not.
This week Bloomberg's Eric Balchunas joined us to put this drawdown in context. Eric has been a top voice tracking Bitcoin ETF developments since BlackRock’s initial filing in 2023 and has watched this asset go through eight major corrections. His take? This is what Bitcoin does. It's Rocky Balboa. It gets beat down, and then it comes back and wins. There's no reason to believe the ninth movie ends differently than the first eight.
If you're staring at red charts and contemplating your whole existence, this episode will help you zoom out. Nothing fundamental has changed. The debasement thesis is intact. The network hasn't been hacked. This is just the price you pay for the returns.
What We're Seeing
Bitcoin was up 400% in two years. This correction is the hangover from front-running every good narrative at once. ETF legitimization, Trump winning, institutional adoption. All of it got priced in during 2023 and 2024. Eric's framing: if you could take some of those gains and spread them into 2025 and 2026, we'd all feel a lot better right now. But that's not how markets work. You got the sundae all at once, and now you're paying for it.
There was a "silent IPO" happening. OGs who held through multiple 80% drawdowns finally had liquidity to take profits. The ETFs brought in real buyers, and some long-term holders used that as an exit. Eric's view: they earned it. But if you got in for the hard money thesis and that thesis is still intact, why would you fully liquidate? That part is harder to explain.
ETF investors are hanging tough. Only ~6% of assets have left despite a 45% drawdown. Eric's explanation: ETF investors are the smart money. They came in with a 2% allocation, a five-year time horizon, and an understanding that volatility is the cost of admission. When your Bitcoin position is "hot sauce" on a diversified portfolio, a 45% drawdown is a 1% problem. It's the people who are 50%+ allocated who are freaking out.
The debasement thesis hasn't changed. If anything, it's gotten stronger. Net interest on the federal budget is now 14%. The government rarely makes hard choices. They can't even get elected promising to cut spending. This cycle is unstoppable, and Bitcoin is a hedge against it. That fundamental case is completely intact. Nothing about this sell-off changes the math.
The Debate
We wrestled with whether this drawdown is different or just another chapter in the same story.
The concern:
Gold has been ripping. The debasement trade went mainstream. And Bitcoin didn't keep up. Maybe the four-year cycle got front-run. Maybe OGs are selling because they think TradFi captured Bitcoin and it's not cool anymore. Maybe we're in for a multi-year grind while gold takes the spotlight.
The counter:
Bitcoin has had eight serious drawdowns. Its track record of coming back to hit all-time highs is perfect. Unless this time is different (and there's no evidence it is), why would you bet against the pattern? The ETFs are established. BlackRock, Fidelity, and Vanguard all say it's an asset class. The network is running fine. The only thing that's changed is price, and price always recovers.
Where we landed:
This feels bad. That's the point. Volatility is the price you pay for the returns. The people who have made 10x in less than a decade did it by staring into the void multiple times and not blinking. If you can't handle the volatility, you shouldn't be here. But if you understand the thesis and believe it's intact, there's no reason to panic. Everything is completely normal, even if it doesn't feel that way.
What This Means for You
If you believed the thesis a year ago, nothing has changed except price. The debasement math is the same. The network is the same. The institutional infrastructure is better than ever. The only difference is sentiment, and sentiment is not a thesis.
The people who will be rewarded are the ones who can separate price from fundamentals. If you're treating a 45% drawdown as evidence that something broke, you're making short-term inferences from long-term patterns. If you're treating it as the cost of admission for asymmetric returns, you're thinking correctly.
Your nerves right now are directly correlated to how much Bitcoin is in your portfolio. If it's 2%, this is a blip. If it's 50%+, this is existential. That's not a Bitcoin problem. That's a position-sizing problem
The Move
This week's action: Separate the noise from the signal.
Ask yourself:
Has the debasement thesis changed? (No.)
Has the network been compromised? (No.)
Have institutions abandoned Bitcoin? (No, 94% of ETF assets are still there.)
Is this drawdown historically unusual? (No, it's the eighth one.)
If the answers are all no, then the only thing that's changed is your emotions. And emotions are not an investment strategy.
This is exactly the kind of environment where getting your infrastructure right matters most. When price recovers (and it always has), you don't want to be scrambling to figure out custody, security, and inheritance planning at higher prices under time pressure.
We help individuals, businesses, and institutions who own Bitcoin (or want to) secure it properly: institutional-grade custody, inheritance planning, financial services, and access to a team that knows what they're doing.
If you're holding serious BTC and haven't pressure-tested your setup, or if you're building a position and want to do it right from the start, let's talk.
— Jackson
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