Why the Downtrend Will Continue

Look, I’m not out here naked shorting the market; that said, I don’t feel good about crypto here, and I’ll explain why.

After Bitcoin crossed the $100k mark in 2024, there was euphoria as well as a sense of vindication among crypto natives who—for obviously too long—have been derided by traditional finance pros (even as our gains have consistently put theirs to shame.) This brought the all-too-familiar confidence, memes, and eventual letdown as the event became anticlimactic. It was 20k again. It was 69k again. If you’ve been here for a few cycles, you—like me—may have felt that old familiar feeling creeping in.

There are a lot of reasons I remain long-term bullish crypto, but cautious over the short and mid-term. First, its clear that Strategy has laid out a playbook for companies to follow, and a few are starting to do just that. The problem, however, is that liquidity is much thinner than it was a few years ago, and the economy isn’t doing well for the average retail investor.

With the imposition of tariffs, the question of where the economy goes from here looms large. Prediction markets are seeing a growing number of bets on a US recession in the near-term. Analysts are calling for higher prices, but their predictions are based on retail coming back because institutions won’t be able to do it alone.

And this, to me, is the fundamental problem. It’s not 2017, or 2019, or 2021. 2025 is a radically different environment for the average retail investor. Employment is increasingly precarious for a large number of formerly secure white collar professionals. Investors have less money, but even more importantly, perhaps, they have less tolerance for risk. Added to this, the average retail investor has become increasingly cynical about crypto. While everyone knows the stories of people putting a few hundred into a meme coin that eventually becomes a few million, most investors experience precisely the opposite. They don’t make money in the space; they lose money. They lose money on big caps; they lose money on small caps. They give back gains; they get rugged. Crypto is a brutal market, and anyone who’s paid attention over the last few years increasingly understands that it is much more akin to gambling than traditional investing.

Now, I’m seeing the Trumps get involved in Bitcoin mining, and all kinds of alarm bells are going off in my head. It’s like I’m seeing influencers shilling ICOs in early 2018. I know how this story plays out. With all that said, I remain mostly sidelined, with some select exposure to certain projects. Keep in mind that I’m not an investment advisor, and my ideas about the market are frequently wrong.