CryptoGoat 🫡

Why did crypto underperform other assets in 2025? 1. BTC ownership was too concentrated. It never fully distributed out at lower prices. Then there was significant confluence of factors concentrating selling in 2025: heavy liquidity available for exiting large bags at the mythical $100k price target, fulfilment of the narrative of "dumping on the suits", huge ideological shifts from being a cypherpunk beacon to a Wall St/Trump family vehicle, the apex of 4 year cycle (even if they didn't believe in it, people were afraid of the belief of others), and quantum fears finally becoming more tangible. 2. Put yourself in the shoes of someone who has massive bags that can’t be sold overnight, with 99.99% of their wealth tied up in a single asset. Now there’s this existential quantum threat on the horizon. You don’t know when it’s going to happen, but the timeline has been accelerating. Technical solutions exist, but they’re all difficult, and you’re well aware of the political dysfunction within the Bitcoin dev community. It isn’t an imminent, black-and-white threat, more a nagging worry sitting in the back of your mind, but once you start thinking about it, the mind-virus is hard to shake. Combine that with all the other reasons to sell, and it becomes totally rational to dump a meaningful part of the bag. Depending on how you count it and what’s lost or not, there are $200–250bn+ of OG holdings out there. To put it simply, BTC got to a price where the supply overwhelmed the demand in the market. 3. There wasn't anything to believe in. Financial nihilism is a real story but also one that does not captivate the interest of retail buyers. Meanwhile there were more compelling dreams being sold in the equity markets around AI, quantum, space, drones, nuclear, and defense. The debasement story for BTC was real but gold simply beat it out. BTC had adverse supply dynamics, while gold had favorable demand dynamics (Central Bank buying), and at some point the divergence became impossible to ignore and it meaningfully weakened the story for BTC. Then from a crypto native perspective, BTC lacked a strong narrative in 2025. In late 23/early 24 we had the ETFs, in late 24 we had Trump. There also wasn't a narrative around liquidity, or an overarching sense of hope and optimism around what crypto could achieve for the world. 4. Crypto is the tip of the spear for liquidity conditions. You can view it as a blow-off valve for excess liquidity. There are different forms of liquidity and weighting between them is more of an art than a science, but without any doubt, liquidity conditions were the most loose in 2021, and arguably were meaningfully more loose in 2024 over 2025. This tracks very well with general price action, market breadth, and the state of the game. 5. It didn't feel like there was enough upside anymore. BTC still had a lot of volatility and risk and traded like aids a large part of the time, and enduring all of that made sense when there was the prospect of a 3-5x, but as people came to Jesus on the shift in potential upside, 50% gains weren't enough. Meanwhile, events like the $10bn seller in July were sobering. So if one guy could absorb $10bn in demand then, at $500k his bag would have been $50bn? At $1mm it would have been $100bn? It didn't pass the smell test. 5. The game continuing on in a liquidity deprived state drove an acceleration in the lack of belief and PvP conditions, which became a vicious cycle in of itself. Money within the game would concentrate into sharps, who would then offramp the money into other asset classes, helping to fuel them. I tend to believe the weakness in altcoins ultimately became a drag in BTC as well, because it had the effect of driving people to fully offramp from the crypto ecosystem, instead of taking profits into BTC. 6. What happens from here? It remains to be seen how much OGs and other large holders will continue to sell post the 4 year cycle being removed as a driver. Quantum has been gaining more awareness and narrative traction so that will be an overhang. Meanwhile, gold and silver are cleaner and simpler bets on debasement. Liquidity dynamics may improve a lot if Trump successfully takes over the Fed, but that is a complex process, and half a year away from here. It feels most likely that BTC needs to go through a period of re-accumulation. Alts can have idiosyncratic moves but overall attention is declining and I don't see any obvious narratives that can re-captivate the attention of the market.