Author: Donato Source: X, @wuk_Bitcoin

This article does not talk about predictions, nor does it talk about macro narratives. It only talks about three things from Jason’s perspective:

• What do you think of Bitcoin as an asset?

• How to understand this round of decline;

• How to see the next medium and long-term development of Bitcoin

It must be made clear that what is mentioned here is not investment advice, but a thinking framework. Before making any investment, ask one thing clearly: whether you can bear the corresponding risks.

First: How to view Bitcoin as an asset

I still believe that Bitcoin is a brand new asset class, and in the long run, it is a better "golden" asset

(1) The total amount is limited, 21 million. It is written in the code and no one can change it. Gold still has new mining volume every year, but Bitcoin does not.

(2) Extremely transferable. One hundred million U.S. dollars of gold requires armed escort when moving from one country to another; one hundred million U.S. dollars of Bitcoin only requires a set of keys. In an era of increasing geopolitical and global uncertainty, the portability of assets carries an inherent premium.

(3) Auditable. Every transaction in Bitcoin is on-chain and can be verified by anyone. As for gold reserves, you can only trust the central bank's statements. In fact, the U.S. gold reserves have not had a real third-party independent audit for many years.

Some people would say, isn’t Bitcoin mainly used in gray areas? This view is outdated. Now more and more countries and financial centers are legislating and complying with regulations to squeeze out the gray parts. Historically, most disruptive technologies have developed this way. The early Internet and early electronic payments were chaotic first and then standardized. There is another very critical number; the penetration rate of global digital currency is about 3%-4% today. You can compare it to the fact that when the Internet bubble burst in 2000, the global penetration rate was about 5%; when e-commerce was listed on Alibaba in 2014, the penetration rate in China was about 3%, and ten years later it was 60%.

I am not saying that Bitcoin will definitely replicate this curve. Rather, if you believe this is an asset class that actually exists and has long-term value, then 3%-4% means it's still very early days. The early stage means opportunities, but it also means that the fluctuations will be very large!

Second: How to understand this round of decline

Let’s put the facts out first. Bitcoin peaked in October 2025, close to $126,000. It continued to fall in the following four months, with the sharpest fall on February 5-6, 2026, when it fell 15% in a single day, once falling below $61,000. The fear-greed index fell to single digits, an extreme range that has only occurred a few times in history. Then the next day, it rebounded by 11% and reached 70,000 again.

This is Bitcoin, its volatility is several times that of traditional assets. If it falls by 15% in a day and you can't sleep, then this asset may really not be suitable for you. It's not a matter of ability, it's a matter of nerve endurance.

Then why did it fall? My judgment is that this is a cyclical sell-off with a high degree of consensus. Bitcoin has a very clear four-year cycle because its engine is halved every four years. Historically, 12-18 months after each halving, we will see a cyclical high and then enter a correction. The last halving was in April 2024 and peaked in October 2025, almost 18 months, which is almost perfectly consistent with history. This is not a meaning, it is a consensus. The consensus means that old players who have experienced multiple cycles in history will begin to sell systematically during this period to lock in profits. There is never a contradiction between long-term optimism and periodic selling. Gold fell from 1900 in 2011 to 1050 in 2015, a drop of 45%, and then rose to nearly 5000 today

What’s really different about this round is the ETFs and the changing hands. The approval of Bitcoin ETF in the United States in 2024 is indeed important because it allows a large number of institutional funds to have a compliant entrance at once. But many people ignore this point. ETFs allow new buyers to come in, but they do not allow old buyers to clear out in advance. In the past, Bitcoin holders were mainly two types of people: early miners and the earliest believers (OG). Their costs were extremely low, some even hundreds of dollars. When a large number of institutional buyers appear in Bitcoin and it rises all the way to $120,000, if you were them, would you sell? Most likely. So I think this round is not essentially about the failure of Bitcoin, but a historic change of hands that Bitcoin must go through before it can become a mainstream asset. Switch from early believers to long-term allocation institutions. ETFs are just the first step, and the changing hands may not be over yet.

A rule that is often ignored; if you look at the major retracements in Bitcoin history together, you will find a very interesting phenomenon.

Falled from US$32 to US$2 in 2011, a drop of 93%

From 2013 to 2015, it fell from US$1,100 to US$170, a drop of 85%

From 2017 to 2018, it dropped from around US$20,000 to US$3,200, a drop of 84%

From 2021 to 2022, it will drop from US$69,000 to US$15,500, a drop of 77%

As of 2025-2026, the decline so far is about 50%

The decline is narrowing in each round. This usually means one thing: the asset is maturing and volatility is declining because the holder structure is changing. Of course, the 50% retracement is still huge, but this is not a bug, this is a feature. High volatility is the price you pay for excess returns. If Bitcoin only fluctuates 5%, its long-term return will be similar to that of national bonds.

Third: What do you think about the long term?

I have a simple framework. If you believe that Bitcoin is digital gold, its long-term value should be benchmarked against physical gold. Today, the market value of gold is about 20 trillion US dollars. When Bitcoin was worth 70,000 US dollars, the total market value was about 1.4 trillion US dollars, which is only equivalent to 7% of gold. Even if this narrative is only half realized, and Bitcoin has reached 30%-50% of the market value of gold, looking at it from today, there is still a lot of room for upside.

But I want to tell you two things honestly: I really don’t suggest you buy now. The change of hands may not be over yet. The short-term market is still very fragile. 50% may not be the bottom, or it may be that no one knows, and those who know are gods. There is still no investment advice here, and the volatility of digital assets is not suitable for most people.

What are the real risks? Some people will ask whether Bitcoin will return to zero. I personally think that the probability of it returning to zero may be lower than the probability that it will reach half the market value of gold in the long term. The real risk is often not the asset itself, but two things:

(1) Your position structure. If you go all in, increase leverage, and use money you shouldn’t, even if Bitcoin rises 10 times in the future, you may be forced out halfway, and it will be the most ugly way

(2) The depth of your understanding of assets. If you just listen to others saying it will rise, you will not be able to withstand a 50% drop. Only by truly understanding its underlying logic can you remain rational during a plunge.

Let me calculate a very simple math problem for you. If this cycle is the same as the last one, with a 75% drop from high point to low point, then you have already bought at a 50% drop. Can you still withstand another 50% drop? This is not prediction, this is arithmetic.

The last comparison

In 2000, there was a company that we are all familiar with. Its stock price fell from US$113 to US$5.5, a 95% drop. At that time, everyone said that the Internet bubble had burst and e-commerce was no longer viable. Today, the stock price of this company is about US$240, which has increased approximately 42 times. It is called Amazon. Of course it is easy to look back in hindsight, but the premise is: you have to live until that day.

The same is true for Bitcoin. The long-term logic has not changed, but short-term fluctuations are enough to kill anyone who doesn't know how to manage positions. So what really matters is never whether it will rise, but whether you can survive until the day it rises.

Finally, I want to ask a question: When gold rises by 60% and Bitcoin falls by 50%, do you think this is a failure of the narrative of digital gold, or does it mean that this rotation is not over yet? Is Bitcoin evolving from a speculative asset to an allocation asset? Or is it essentially speculation?

How you answer actually exposes your underlying belief in this asset class.