Always a range of views here.
Take Dale Gillham, chief analyst and founder at Wealth Within, who questions whether crypto’s original “digital gold” narrative is broken.
“Bitcoin and the crypto market built its reputation on a simple promise: buy and hold it, and eventually you’ll be rewarded but right now, that belief is being tested. Following one of its biggest declines in recent years, roughly half of all Bitcoin holders are now sitting on a loss.
“Think about it, millions of people who were told crypto was the future are now watching their investment trade below what they paid. While it’s easy to believe this when you’re making money, it’s much harder when you’re losing it. If enough investors begin questioning the story, panic can quickly replace conviction and if that happens, this may be the precursor to a larger sell-off.
“Adding to the concern, last week Bitcoin just suffered its worst weekly decline since the collapse of FTX in 2022. The difference this time is there was no major scandal, no fraud, and no exchange failure, the market simply sold off. That alone should make investors stop and think.
“For years, crypto supporters argued it was digital gold: a place to store wealth when inflation rises, governments print money, or uncertainty takes hold. Yet during the latest bout of geopolitical tension, gold moved higher while Bitcoin fell sharply.
“Even billionaire investor Mark Cuban, once one of Bitcoin’s strongest supporters, recently revealed he had sold most of his holdings after becoming disappointed with how Bitcoin recently behaved. His argument was simple: when the hour of truth came, the bitcoin price didn’t act the way it was sold.
“Then there’s another challenge. Much of the speculative capital that once flowed into cryptocurrency is now flowing into artificial intelligence. Investors can buy companies building AI software, data centres, semiconductors and the infrastructure powering the next technology revolution. The excitement, momentum and speculation that once fuelled crypto is increasingly being redirected elsewhere. History shows that money loves a new story and right now that is AI.
“None of this means Bitcoin is finished given it has survived brutal crashes before and recovered every time. Long-term believers will argue this is simply another chapter in a highly volatile journey, but the questions are becoming harder to ignore. If Bitcoin doesn’t rise when inflation rises, doesn’t hold up during periods of uncertainty, and falls when investors become nervous, what role does it play in a portfolio? That’s the debate investors are having right now.
“Bitcoin may recover again as it has surprised critics many times before but for the first time in a long time, the market is no longer asking how high can Bitcoin go. It’s asking whether the original story still holds true.”
