Carnage
Not gonna lie, this stinks.
It’s bitcoin’s 17th birthday, my 50th newsletter, and bitcoin is tanking. Womp womp.
If you’re still holding bitcoin, congrats. You’ve got diamond hands. Welcome to the 2026 bear market, where dreams in 2030-2034 are made today.
Sage advice from Daniel Tiger: “When you feel so mad, and you want to roar, take a deep breath, and BUY SOME MORE!”
Clearly, I’m in my toddler era. Good times.
Did you BUY THE DIP? LFG!! OF COURSE I DID!!
When people reach out to you to see if you’re okay because of the bitcoin price falling its typically the absolute BEST time to buy. If you loved bitcoin at 126k in October, just a few months ago, you’re going to love it more on sale at 50% off! Same asset, lower price. Woohoo!
If your favorite car/shirt/TV/whatever was on sale for 50% off, you would sprint to buy it while laughing incredulously at what a steal you got. When it comes to stocks/bitcoin, the opposite is true. People freak out and sell the very thing they owned when the price falls (because they didn’t do the work and let fear and price dictate their actions), even if the underlying fundamentals of the asset are unchanged. Humans are weird, but predictable.
Their loss, your gain (if you buy the dip). Life isn’t always fair.
Although hard, when you vomit a little due to fear while buying bitcoin, it typically ends up being your best purchase. Yes, bitcoin can go lower from here. I cannot imagine lower than 50k, but anything is possible. If you’re waiting for <50k, best of luck to you. The pain trade is UP from here while everyone is sidelined waiting for another dip. It may come, it may not.
As always, with bitcoin it is critical to zoom out and have a long-term mindset. AT LEAST 5 years, ideally 10+. Anything less is basically gambling, given the volatility.
Even today, with bitcoin near the LOWS of 60k, it has a 6-year CAGR of 35%!! Just a few months ago, it would have been ridiculously higher. Just for perspective, a CAGR of 20%-30% is considered exceptional, and only the most legendary of investors (Buffett, etc.) have achieved this over long periods of time. Granted, 6 years isn’t that long, but bitcoin is offering retail investors legendary returns for simply buying bitcoin and doing NOTHING. Go to work, enjoy your hobbies, be with friends and family, live your life, and beat the most highly paid hedge fund investors out there. If you DCA’d from the pico top in 2021 and kept doing so through today, you’d still have outperformed the S&P 500. Pretty good! Sounds easy, right?
Not so fast. If this is your first cycle, welcome to the pain trade. Get cozy. With massive returns comes massive volatility. The beauty of massive drawdowns like this is that:
It brings attention to the asset. Randos on the street hear that bitcoin is crashing and get interested. CNN has it as a headline story.
Some people buy, and likely a new bitcoiner is born, who tells their friends about it or writes a newsletter to hundreds of people about it for free. Adoption grows.
It converts people into hardcore bitcoiners like myself through forced education. I didn’t truly understand bitcoin until it was crashing in 2022. The crash forced me to study my investment more to decide whether to sell or buy more. Needless to say, I bought a lot more. Know what you own. Have some conviction. Do the work.
So if you ever thought, “man, those guys who bought bitcoin at like $1 and are selling now for billions in profit were so lucky...”
Now you understand why that is such nonsense. IT IS F’ING HARD TO HODL. THERE IS NOTHING EASY ABOUT IT. THERE IS NO LUCK.
If you ever get to the point where you do realize some gains after a long-term investment, you will slap the person who calls you lucky. This shit is hard. It’s hard when there are massive drawdowns, and it’s hard not to sell at peak euphoria. It is an emotional roller coaster like no other. Maintaining sanity is nearly impossible - which is why I write this newsletter to help ground myself. It is simultaneously the greatest trade and the hardest trade.
One thing I know is that I am built for this. Why? I’d like to thank the Buffalo Bills for putting me through 44 years of torture, and yet I still root for them unconditionally. Maybe it’s all the school and the hardship/delayed gratification I went through to be a doctor. I’m not really sure, but regardless, I can tolerate pain like no other. If I believe in something and fundamentally understand it at a first-principles level, I cannot be shaken from my position. Passion and stubbornness define me. I will admit when wrong and change my opinion when the evidence is clear, but that is NOT today for bitcoin. It could not be further from the truth.
Bitcoin is better today than in 2009. More decentralized. More secure. Still finite at 21 million. No hacks. New block every ~10 minutes. Massive global adoption that is still in its infancy in the grand scheme of things. Fiat money is still being printed globally, and the pace is accelerating. Every country is essentially insolvent with gargantuan debt burdens set to explode higher. Countries are moving AWAY from the dollar and US Treasuries slowly over time to settle trade.
Thesis intact.
Bitcoin is money. Digital gold. Exponential gold might be a better term since it’s so much better than gold.
How do exponential new technologies behave? They are volatile as comprehension and adoption grow. Do you recall how stupid everyone thought the internet was in the late 90s?? As a corollary, Bitcoin is the internet of money, and you can own a piece of the fixed supply. Might be valuable someday.
Volatility is a gift to the faithful. I do look at price, but it honestly doesn’t bother me all that much. I prefer to simply look at my end of year bitcoin balance. Do I have more bitcoin than last year? Since bitcoin is my unit of account and what I deem as real money, having more of it over time is the ultimate goal. Its price in fiat will fluctuate as people struggle to grasp this radical new technology that is even more disruptive than AI, but over time, as more fiat dollars are inevitably printed, the fiat price of bitcoin will rise, given its true scarcity as demand accelerates and supply remains fixed. The key is to stay solvent during that time, avoid emotional trading and leverage, keep your day job, stack sats, and simply HODL. Easier said than done, though, for sure. Best of luck to you.
This selloff has been BRUTAL and the toughest bitcoin dip I’ve experienced (INCLUDING the 2022 bear market). Unfortunately, I don’t think we’re out of the woods yet. We could head back to 58k.
This sell-off is due to a perfect storm of events:
“4-year cycle” narrative to sell in Q4 2025. Bitcoin OG whales started taking massive profits.
Tax-loss harvesting and “wash trading” are still legal with bitcoin/crypto. Wash trading is when you sell an asset at a loss and buy it right back within 30 days. It’s legal (for now) with bitcoin/crypto, but I expect that to change in 2026. Tax loss harvesting is just smart, and many people sell “losers” to offset taxes on their “winners”. Bitcoin was the loser in 2025 compared to gold and AI trades. People are wash trading it in 2026 as well for tax loss harvesting purposes.
The Binance “black swan” event. Something messed up happened on one of the largest trading platforms (Binance) on 10/10/25 that impacted bitcoin/crypto ONLY (see gold, silver, equities doing great), causing MASSIVE LOSSES. There are a ton of rumors out there, and nobody knows for sure. Regardless, this crash to 60k was the result of massive leverage being flushed and forced selling by a big entity. Very similar to FTX in 2022. That was a great time to buy, just saying.
FUD related to MSTR and regarding quantum computing.
In 2026, amid concerns over wars (Iran), tariffs, low liquidity due to government shutdowns, the AI trade and precious metals sucking money out of bitcoin, a new Federal Reserve chair selected, conflicting economic data (GDP vs. jobs), and a host of other factors, bitcoin is in the dumps alongside many other “high-risk” tech stocks.
Pink is software stocks. White is bitcoin.
Back in October 2025, the market went “risk off”. Not entirely, as the AI trade still had legs, but sectors likely to be disrupted by AI started to sell off aggressively. Namely, software stocks that AI could easily duplicate have been obliterated. Investors started to price in lower margins, growth, and increased competition. This has led to a dramatic sell-off and revaluation. Some justified, some maybe not.
Unfortunately for bitcoiners, bitcoin is still lumped in with high-risk/high-growth tech stocks like software companies. Bitcoin, after all, is just software (computer code), but requires physical hardware to mine it. The end goal for bitcoin is to be seen as the LEAST RISKY asset on the planet, given its pristine monetary properties. For now, given bitcoin is only 17 years old and poorly understood by 99% of the world, it is seen as the exact opposite and gets sold off when everything else does that is high risk and in the “technology” bucket.
This is the opportunity of a lifetime. When you understand something so valuable that 99% of the world doesn’t. Early Amazon investors will tell you that, and bitcoin’s potential is way bigger.
Not only should AI fears not be dragging down bitcoin's price, but they should be ELEVATING IT. Why?
AI creates abundance. In a world of abundance, humans frantically seek and dramatically value scarcity. Bitcoin is the first and only scarce digital commodity.
AI agents are literally using bitcoin for payments between each other (early stages). A natively digital medium of exchange creates new demand for a scarce commodity. If the term “AI agents” has you cross-eyed, you'd better start learning what’s going on, FAST. You are living through a paradigm shift, and if you are of working age, your job is in the crosshairs.
Like it or not, AI is going to dramatically alter the world over the next 1-2 decades just like the car, railroad, highway, telecom, and internet did. Employers will stop at nothing to cut costs and maximize profits. This means white-collar work will be eliminated first (via AI), followed by blue-collar labor second (robotics using AI). I predict unemployment will rise, but who funds the government running 2 trillion-plus deficits today when tax collections go down as people get fired? Who funds Social Security? Easy - Uncle Sam! BRRRRRRRRRRRRR.
Of course, they’ll try to tax the rich AND the robots, but the beauty of bitcoin is that your wealth can be stored in your head with 12 words. You’re not tied to a valuable piece of land/home, or business. If you don’t like the way you’re being treated or taxed, you move! Tax that! After all the rich people leave, the money printer must go at max speed. I hope you own something scarce that day. The AI DEflationary bomb is about to hit, and that is incompatible with an INflationary fiat monetary system where prices must always rise so debt can be more easily repaid. This is crucial to understand. This is why they can never stop printing money.
AI can create or duplicate nearly anything, but it can’t duplicate bitcoin. Just like you can’t reinvent the number zero, fire, or the internet. These are zero to one events. Step changes. New technologies that change everything. Similarly, Bitcoin is a revolutionary technology protocol with powerful network effects. The code can be duplicated, but would you use a “new” and untested version of bitcoin with zero network effects, or trust your life savings to it, when the OG bitcoin has been around for 17 years and survived endless attacks and has only become stronger? Nothing has been stopping anyone from duplicating bitcoin for the last 17 years; the code is relatively simple (a feature). This isn’t a complexity issue that AI can solve, duplicate, and render useless/invalidate. It doesn’t create new competition for Bitcoin and destroy margins, business moats, and profits as it does with software companies.
AI needs energy, and a ton of it. Bitcoin miners are AI’s best friend when it comes to this. Bitcoin mining is the ultimate demand-response system paired with AI, can be located anywhere, and LOVES cheap energy (which means higher profits). More bitcoin miners further decentralize and secure the network. Very bullish.
This is why I continue to pound the table for digital scarcity as a revolutionary technology for storing value and serving as sound money. It is such an insane thing, which is why it’s so hard to comprehend and value. It’s going to be a wild and volatile ride. Hang on tight. Have some conviction and trust the work you put in to understand bitcoin that others haven’t. You’re going to need it.
Bitcoin’s volatility has been tough to stomach with stocks and precious metals crushing it, but I’m not selling.
I’m actually considering taking out a loan to buy more. Yeah, that’s right. I’m all in. I write a newsletter about this technology and its volatility. I ain’t afraid.
I kicked myself for not doing it in 2022. I just went back and read my posts from then to boost my motivation and confidence. I was brimming with confidence in the depths of the bear market at 20k bitcoin.
I got into bitcoin because I believed the “system” needed a reset. Fiat money is broken, and traditional finance enriches the elites. The Epstein stuff is just more reason to burn it all down.
Bitcoin is freedom technology for 8 billion people. No trust required. No banks needed. Fixed supply with rules, no rulers. Nobody can print it for themselves or their friends. It can’t be bribed. It’s natively digital, portable, and uncensorable. An immutable record that transforms what humanity understands and recognizes as money. A new store of value. A developing medium of exchange as adoption grows. My personal unit of account, and soon to be yours.
As good as gold is, most of what I said above is not true for it. I will not invest in horses when the Model T drives by me. I will not invest in Blockbuster when Netflix streams to my TV. I will not invest in Kodak and wait for my pictures to develop when I can take unlimited digital pictures.
Gold is having its moment, and for sound reason. My bitcoin thesis may take decades to play out. The boomers in charge want gold today. Enjoy it. Their days alive and in charge are dwindling fast. My generation and beyond wants bitcoin. I’ll gladly wait our turn and buy it on sale today. Nobody is going to be shipping gold across the seas for payment in 2075, and tokenized gold on the blockchain can’t compete with a natively digital, fixed-supply asset like bitcoin.
I know I said 2025 was going to be spectacular for Bitcoin, and in many ways, IT WAS. Bitcoin did hit 125k (I predicted 150k on the low end), but it sold off to end the year “down” from December 2024... whatever.
This is a multi-decade/generational trade, not a one-year gamble. More importantly, global adoption and the approval and incorporation of bitcoin into traditional finance dramatically accelerated in 2025, laying the foundation for an incredible next few decades of bitcoin growth. I won’t rehash all of the bullish news, but I wrote extensively about this throughout 2025 if you’re interested. Some highlights…
This is dramatically underappreciated because almost everyone focuses only on price when they should focus on fundamentals. I’m here for the fundamentals, and hopefully that will set bitcoin up for a tremendous next few years.
Could bitcoin shock the world in 2026? Maybe.
Bitcoin does crazy things, and the fundamentals are so good and so insane that a new all-time high in 2026 wouldn’t surprise me.
I just see a waterfall of new money flowing through the economy this year due to various Trump policies, and that is historically tremendously beneficial to bitcoin’s price. Add on midterms that Trump wants to win, continued global adoption, and the likely passage of new federal laws approving bitcoin/crypto, and things could get nuts. I want to be along for the ride.
Obviously, I’m very bullish and buying despite the “crash”. Let’s see how this prediction plays out this time next year or a few years after.
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