Bitcoin Too Big to Die? Effect of "strategic reserves" on bear markets

[aylabadia05]

It's too easy to say "dead" for people whose minds are too complex to grasp reality.
Bitcoin 21 million. It's intended for transactions because Bitcoin is an electronic cash system.

When they said that $20,000 was the right time to sell because it was the last dead cat bounce before it died completely, then three years later, Bitcoin's price skyrocketed. Given the current reality of Bitcoin's price, their thinking is increasingly confused in their attempts to justify their own thoughts.

[Merit.s]

Bitcoin has grown into the stage that nothing can kill it and people investing in it wouldn't buy the FUD anymore because big whales, institutions and the US government are talking good about bitcoin and also encouraging people to buy bitcoin for the future. That will put more confidence into new and old investors so that they don't panic sell when there is a dip.

We hear negative news about bitcoin whenever there is a dip but I am still waiting for the news that will lead bitcoin to the bear market. Volatillity is the nature of bitcoin and can't be removed from bitcoin.

[peter0425]

We hear negative news about bitcoin whenever there is a dip but I am still waiting for the news that will lead bitcoin to the bear market. Volatillity is the nature of bitcoin and can't be removed from bitcoin.

The bear cycle can still and most likely will happen. It doesn’t mean though that it will totally crash and “die”. It will just decline in price sure but I don’t even think it will crash that much unless there’s some big scam or hack scandal again or some governments decided to ban bitcoin. But we are past the point of no return.

[Just Say]

We hear negative news about bitcoin whenever there is a dip but I am still waiting for the news that will lead bitcoin to the bear market. Volatillity is the nature of bitcoin and can't be removed from bitcoin.

Of course it is true that volatility is a nature of Bitcoin and it can never be removed but still its demand is very high at the moment because the US government has registered a positive view towards Bitcoin. Bitcoin is now extremely valuable to big companies and institutions, for example, the Philippines, Thailand and Latin American countries introduced a bill now for a strategic reserve but it is not correct to say that strategic reserves have implications for bearish markets because these are positive news for Bitcoin that indirectly work to bullish the market and keep its candles green.

Even now we have seen that after Fed Chair Powell's comments on Jackson Hole economic policy, the price of Bitcoin has pumps back over $116k, this is a sign of a bullish market.

[r_victory]

The more adoption it gains, the stronger Bitcoin will become. I don't know if volatility will decrease unless they create financial mechanisms for this purpose. If Bitcoin "dies," it will be an unprecedented catastrophe. Just think of the reserves created; billions have been invested, and depending on the country, it could mean total bankruptcy.

There will always be "conspiracy theorists" saying Bitcoin is a passing fad, that it won't last, etc. It's part of the game!

[Antotena]

The more adoption it gains, the stronger Bitcoin will become. I don't know if volatility will decrease unless they create financial mechanisms for this purpose. If Bitcoin "dies," it will be an unprecedented catastrophe. Just think of the reserves created; billions have been invested, and depending on the country, it could mean total bankruptcy.

There will always be "conspiracy theorists" saying Bitcoin is a passing fad, that it won't last, etc. It's part of the game!

There is Volatility in every market, why you don't see them on other assets line gold, crude and some other commodities is because they are been controlled. Have you ever heard any exchange stop trading on a daily light before? Well, I'm happy to tell you that Robinhood and New York exchange, they have done it severally, it's something they call breaker, they can just stop market from reacting to orders and that's it but here in Bitcoin, it occurs naturally that's why you see Volatility crazy sometimes.

Haven't you noticed the market lately, if it was before now you will see Bitcoin trading below $100k when it was publicly announced that US will not be buying Bitcoin with public funds, it has been dropping slowly and catching up doing lows and high. If this was before, trust me it's going down to rabbit hole where we may even find it very difficult to find support, this is the effect of strategic reserves from different institutional investors that believes in Bitcoin on the long run.

[sana54210]

It is not too big to die, if it dies then it dies. But we are definitely not going to hear the end of "bitcoin will die" type of journalism, that is something that will always be there.

This is why we should not be expecting something big here, it's very normal and should not be shocking to everyone. Be certain that people will want the "death of bitcoin" for a long time, as long as bitcoin exists, it will happen. That doesn't mean it can't die at all, I mean it's a technical thing, maybe quantum computing, maybe some hacker, some person may change the results and suddenly bitcoin is zero, it's not "impossible", but as we all know it's very low chance and it will not happen, we just say that for technical reasons.

[d5000]

This is probably the prevailing thought right now. It will only be different if these huge names backing Bitcoin themselves are the ones dumping.

And imo if some thought is too "prevailing" or popular this could generate a certain risk: if contrarian traders (think those who dumped Terra/Luna and BTC when they were aware of the vulnerabilities of their algorithm) see a chance to bring one of the treasury companies into problems, then this could generate such a "huge name dump" via a chain reaction. I consider this relatively unlikely but not impossible: say they attack the weakest of the treasury companies while also shorting BTC, and then distributing the narrative that "Bitcoin Treasuries don't work", bringing also bigger treasury companies into problems (maybe not Saylor but the second tier).

Accordingly, I don't think volatility will disappear because it is the main factor in the game - it brings profit and at the same time sends the message that Bitcoin is not suitable as a currency.

Volatility "disappearing" is also not what I expect. And yes, the "riding the waves" pattern, be it short terme spikes or our beloved 4-year-cycle, is still prevailing among Bitcoin traders I think. But I expect that the ups and downs could become simply less extreme if there is less potential to panic because you fear to "lose everything" when "Bitcoin goes to zero".

But still with 50% of the current volatility there would be enough profit to be made with trading.

[shinratensei_]

I would have love to agree with you on your statement that it's too big to die
But the basis of it being Big isn't on a trustworthy ground, The government.
They say things, switch sides as long as it benefits them likewise some of these institutions.

Agreed with that but so far the US government is showing support. I'd call it a good bullish sentiment for bitcoin and if bitcoin just keep getting support. Bitcoin will be stronger than ever.
What bitcoin need is to stand alongside gold in term of being an asset for investment and it's doing exactly that right now and on the right track to be having wide institutional adoption.

Even the ivy leagues are starting to diversify to crypto right now already.

[Darker45]

This is probably the prevailing thought right now. It will only be different if these huge names backing Bitcoin themselves are the ones dumping.

And imo if some thought is too "prevailing" or popular this could generate a certain risk: if contrarian traders (think those who dumped Terra/Luna and BTC when they were aware of the vulnerabilities of their algorithm) see a chance to bring one of the treasury companies into problems, then this could generate such a "huge name dump" via a chain reaction. I consider this relatively unlikely but not impossible: say they attack the weakest of the treasury companies while also shorting BTC, and then distributing the narrative that "Bitcoin Treasuries don't work", bringing also bigger treasury companies into problems (maybe not Saylor but the second tier).

Meaning, they collude with each other just to bring a certain company down? Indeed, that sounds relatively unlikely.

Contrarian traders are categorized as such because they belong to the minority. They don't get to dictate the narrative. What's prevailing they won't be able to easily replace. At most, if a chain reaction follows, then something similar to the Terra/LUNA effect on Bitcoin might happen. The price lost around 50%. But that was temporary. The market was able to fully recover a year later.

In the end, however, the reason to dump LUNA was based on legitimate concerns. It wasn't driven by a mere contrarian thought, or the simple urge to prove a prevailing trend wrong.

And, going back to the point, if it didn't kill Bitcoin at $30,000, the more it won't at $120,000. Bitcoin is much bigger now. But it's not because it's too big to die. It just doesn't die.

[JiiBs]

Thus: Is Bitcoin now "too big to die"? Could this accelerate the volatility reduction we're already witnessing, and finally pave the road to make it a more stable and "solid" asset, and a true gold competitor?

The news predicting Bitcoin's impending death will not end so soon because some of the major sceptics have not changed their stance. Gary Gensler, Peter Schiff, Warren Buffett and others still believe that Bitcoin will die. The press will always publicize statements by these haters to promote FUD.

These names have always had a major significance in the old ways of finance and doing business and this has left them completely out of the world order that is to come, they don’t see themselves having much significance either and as such, they tend to fight the change, remain adamant and don’t wish to agree to the single law of nature that has advanced through time which is “CHANGE”. Well, we all know what happens to things that don’t change, they break!

[o48o]

I was wondering if the general tendency of both corporations and public institutions (e.g. governments, Central Banks) to set up Bitcoin "strategic reserves" could influence the sentiment in the next bear market. But not because of the increased liquidity or demand, but their influence on the general "sentiment" or "public opinion" on Bitcoin.

Historically, in each bear market we witnessed a lot of voices, from journalism, influencers on Twitter/X and other social media, that claimed that Bitcoin had reached "its end" and "was about to die". This is often accompanies by claims that Bitcoin "was a bubble".

However, it seems that in this cycle, as Bitcoin is being embraced by corporations and even some governments, we may have reached a tipping point where not only die-hard Bitcoiners but also the general people could cease to believe these obituaries.

If your government has a strategic Bitcoin reserve, could it then simply "die"?

An interesting example for this shift are the European Central Bank employees Bindseil and Schaaf, In 2022, after the FTX desaster, they published an article (Bitcoin's Last Stand) claiming even at $20,000 it was a good time to sell because it was the last dead cat bounce before dying completely. Fast forward to 2024/25, and they published an article about the dangers of Bitcoin becoming too succesful (The Distributional Consequences of Bitcoin).

I'm still skeptical about massive Bitcoin reserves for governments but the influence on the "Bitcoin is dead?" narrative could indeed help to change the sentiment in the next bear market, and make it plummet less because less people could fear to lose everything when Bitcoin "dies".

Thus: Is Bitcoin now "too big to die"? Could this accelerate the volatility reduction we're already witnessing, and finally pave the road to make it a more stable and "solid" asset, and a true gold competitor?

To me the whole "omg bitcoin is dying" narrative has been more like meme for a while now, that pro-bitcoiners have been pushing ironically and no-coiners are taking it serously.

It's probably not going to ever die, but it can have ATH in the future, that it never reaches again unless inflation of fiat money catches up. Main thing that could crash it from that ATH could be an energy crisis.

As when a decentralized ledger takes more power than country of Finland (or bigger country), while people have trouble paying their electrical bills, it can have a cultural backlash that affects to voting, and after that to regulations.

[bangjoe]

snip
Thus: Is Bitcoin now "too big to die"? Could this accelerate the volatility reduction we're already witnessing, and finally pave the road to make it a more stable and "solid" asset, and a true gold competitor?

Volatility will remain even if we see massive adoption by institutions. Bitcoin will remain the most volatile asset among the most stable assets, still susceptible to global sentiment, crises, or conflicts. However, we need to believe that volatility will continue to decrease, even though it may still be higher than assets like gold. But talking about the death of Bitcoin is still very far off.

[d5000]

Meaning, they collude with each other just to bring a certain company down? Indeed, that sounds relatively unlikely.

The primary driver would be of course profit by short selling Bitcoin and the stocks of these companies. Not "just to bring them down". Just to clarify. Basically how short squeezes work, but the opposite. Or take Michael Burry, the guy who predicted the 2007/2008 financial crash since 2005 or so and made fortunes with his small hedge fond.

Of course there has to be a weakness in the business model, and a chance to exploit it, i.e. when some of these stocks lose demand. I personally am not too convinced of their business model being sustainable forever. But I don't expect neither a crash being 100% sure for the next 25 years or so (I think 50/50) neither do I expect the crash to happen in the next bear already, but there is a small possibility.

At most, if a chain reaction follows, then something similar to the Terra/LUNA effect on Bitcoin might happen. The price lost around 50%. But that was temporary. The market was able to fully recover a year later.

I agree. Even if Saylor falls this would not be the death of Bitcoin. But my dreams of a volatility reduction would have to wait then a few years more

As when a decentralized ledger takes more power than country of Finland (or bigger country), while people have trouble paying their electrical bills, it can have a cultural backlash that affects to voting, and after that to regulations.

I don't expect the energy demand of BTC to grow that much more. The halving effects should equilibrate the price increases approximately from now on. That could already be the case: even if BTC's price grows to 140,000 now, then it has barely countered the effect of the 2024 halving. Meaning that the block reward in USD in 2021 when BTC was at 69,000 would be similar to the one in 2025 at 138,000.

So unless we see an extreme price increase in one of the next bulls, the "Bitcoin kills the climate" narrative should die down. AI is already consuming more energy afaik.

[Churchillvv]

Agreed with that but so far the US government is showing support. I'd call it a good bullish sentiment for bitcoin and if bitcoin just keep getting support. Bitcoin will be stronger than ever.

Lol! Can you guys be for real and stop associating bitcoin related discussions to US government, is bitcoin tired to any country? No ! So why will you refer bitcoin related discussions to relate the US government, bitcoin is global and not for anyone but for everyone, hence I will ask if china and other countries are in support of bitcoin and the US are not does that mean bitcoin will not keep existing? Of course no bitcoin is not beyond death but it’s very difficult for that to happen that’s all except the internet is totally short down.

[AmoreJaz]

Agreed with that but so far the US government is showing support. I'd call it a good bullish sentiment for bitcoin and if bitcoin just keep getting support. Bitcoin will be stronger than ever.

Lol! Can you guys be for real and stop associating bitcoin related discussions to US government, is bitcoin tired to any country? No ! So why will you refer bitcoin related discussions to relate the US government, bitcoin is global and not for anyone but for everyone, hence I will ask if china and other countries are in support of bitcoin and the US are not does that mean bitcoin will not keep existing? Of course no bitcoin is not beyond death but it’s very difficult for that to happen that’s all except the internet is totally short down.

As we have seen, it is not tied to any country or whatever is happening around it, is a separate entity from any jurisdiction or any government. Hence, it is the prerogative of the government how they will approach the crypto market. I believe a lot of countries are just being discreet with their bitcoin reserves or involvement. But more than likely, they are also silently watching this market and doing their own things to take this opportunity.

Most countries today, I believe, are already looking their opportunities in this market. I don't think they are blind to see the performance of btc throughout the years. They will be left behind if they will shut their eyes on this market. They have seen that no country can really dictate the direction of this market. A very good scenario was when China declared to ban crypto. Some may have had their worries as China is considered to be one of economic powers in the world and yet it didn't collapse the btc market. A testament that no single country can topple this market that easy.

[Lucius]

Accordingly, I don't think volatility will disappear because it is the main factor in the game - it brings profit and at the same time sends the message that Bitcoin is not suitable as a currency.

Volatility "disappearing" is also not what I expect. And yes, the "riding the waves" pattern, be it short terme spikes or our beloved 4-year-cycle, is still prevailing among Bitcoin traders I think. But I expect that the ups and downs could become simply less extreme if there is less potential to panic because you fear to "lose everything" when "Bitcoin goes to zero".

But still with 50% of the current volatility there would be enough profit to be made with trading.

I don't know, it seems to me that a lot of small investors made an exit at $100k and are now impatiently waiting for a new correction to re-enter - while on the other hand, big players can afford occasional dips in which they take profit, and at the same time they have enough funds to prevent the price from getting close to $100k.

From volatility that used to be quite uncontrolled, perhaps today we already have volatility that is more programmed (artificial) because very powerful players hold about 10% of the max supply, which is no small thing (although it may seem that way to some).

The idea that Bitcoin could go to zero is something that you will have a hard time convincing someone who understands how the market works, but on the other hand, there are a lot of people who consider this option possible, because for them Bitcoin is still some mysterious internet thing that functions like an ordinary MLM/Ponzy scheme that will have to see its end at some point.

[o48o]

So unless we see an extreme price increase in one of the next bulls, the "Bitcoin kills the climate" narrative should die down. AI is already consuming more energy afaik.

Well that's refreshing view. You are one of the few bitcoiners that are skeptic about it going to over a million. Maybe that's because you have been around since 2013 in here.
I honestly wish that it wouldn't just keep rising, because of what i said it would create problems for anyone holding. And if it would crash too far down now, it would create whole another problem if those people would lose their savings on it.

Because let's face it, i don't believe in a second that most of us have invested less then they can lose.

[Ultegra134]

Well that's refreshing view. You are one of the few bitcoiners that are skeptic about it going to over a million. Maybe that's because you have been around since 2013 in here.
I honestly wish that it wouldn't just keep rising, because of what i said it would create problems for anyone holding. And if it would crash too far down now, it would create whole another problem if those people would lose their savings on it.

Because let's face it, i don't believe in a second that most of us have invested less then they can lose.

I see a lot of people talking about Bitcoin surpassing $1M and it's something that also gets me thinking. I don't doubt that it's possible, but from my perspective, it does seem unrealistic. Bitcoin's volatility has decreased the past year or two, its price seems to have stabilised, especially after surpassing $100,000. This doesn't mean that we won't be subject to another bear or bull market, on the contrary, but perhaps we might not see major fluctuations that we used to see.

People will always claim what they want to believe about Bitcoin, if it was to crash 10% as we speak, some people would still jump and call that this is a concerning crash and it might be the beginning of the end, bla bla bla. People will never stop that.

[uche6215]

I agree that massive use "as a currency" would be an enormous step in the "solidification" of Bitcoin, once that happens it will be difficult to kill it and it would probably not fall more than 20-30% even in the deepest bear markets (like fiat currencies). However, we're still not there, so I was referring to a more short term effect for the next bear market. And even if I'm partly critical of the strategic reserves, they could have a volatility-reducing effect that could pave the way for an increased use as payment tool.

Bitcoin has surpasses the period of dead, bitcoin now is on the developing stage and in the developing stage, it would widespread across the world. And as a currency which was created by individual and not the GOVERNMENT so it will take some quality time to be accepted as a payment tool. And before it will be used as that it needs to be well known in the whole world so that when starts, marketers would not reject it.

Bitcoin has grown and it will never die again and coming to the next bear market, I dont think bitcoin will come down to $80k again. in the last 24 hours, bitcoin was at the rate of $110k but now it is $112k and still on the rising side and if investors bought at $110k, it was a good purchasing point.