So much for the so called ‘store of value’…is the crypto world in trouble? All indications are pointing to that reality manifest in not-so-distant future.
All signs point to the conclusion that the tipping point is here, finally. So much for the Bitcoin going to an outlandish million-dollar price tag. Crypto world as we know it is in trouble, big trouble. Spillover effects of this can be felt quite far and wide just as we recently saw and continue to see in the software world from AI scare disrupting the software industry.
A true and permanent store of value is only one – gold – for many millennia, a perfect hedge for inflation whereas other investment vehicles are meant for wealth building and they are stocks, bonds and real estate.
Any rational investor tends to do the following:
- Buy stocks to build wealth
- Buy bonds to generate a fixed income
- Buy real estate for diversification and inflation hedge, if they are venturesome enough
- Buy commodities such as gold for the same reason as above – for diversification and inflation hedge as part of the sophisticated wealth building strategy
Where does crypto fit in the above? We are at a loss as to where to fit it in a very short list above as there is no intrinsic value to that “so called asset class” as how it has been peddled by the vested interests and fools alike.
The answer lies in here: “The biggest Ponzi scheme of 21st century”. At best, it is a “Greater Fool Theory” propagated by the vested interests.
So, how about assigning a zero value to the Bitcoin, the queen of a crypto class? Currently, it trades near $68,000. It made a 52-week low near $60,000 last week as “things” started to unravel from the 52-week high of about $126,000 just a short few months back.
Nay, cryptocurrency does deserve a value, some value. Without a doubt. Frankly…it needs to be exactly at $1.00 just as the U.S. dollar and use it as a “medium of exchange” like so-called real money, be it a U.S. dollar or local currency (enter the stablecoin world). Hence, be it a Bitcoin or Ethereum or any other cryptocurrency for that matter, they all need to be priced precisely at $1.00, just as the money market fund shares.
All money market fund shares are priced at $1.00. There is a reason for that. It preserves the ‘stated’ value of one dollar with rare exceptions of some major systemic shock only to be reversed back to a dollar once the shock subsides. That is the purpose of it all barring the jarring effects of inflation. Shouldn’t all cryptocurrencies be priced in a same manner? Then, we shall see how many cryptocurrencies may survive. If they are lucky, probably a few instead of dozens or even hundreds. Nay thousands. A quick Google search yielded the following result:
“Rapid Growth: The number of cryptocurrencies has grown exponentially from just a few hundred in 2014, driven by the ease of creating new tokens. While thousands exist, only a small fraction have substantial market capitalization, with the top 40-50 dominating the overall market value”
Crypto has a technology component; hence, it needs to be priced with ‘some’ value. And the fair value is $1.00, not a penny more, not a penny less, just like a money market fund share price. In absence of that technology component, the value really drops exactly to zero. Zip. Nada.
MicroStrategy (MSTR), the “poster boy” of Bitcoin mania is underwater by more than $5 billion already when it comes to have its average price of its “treasury” collection. In fact, using the word “treasury” is kind of an insult to the “sanctity” of the word ‘treasury’ as it intends to store and/or transact something of a value, not a piece of junk or garbage. Companies like MicroStrategy are routinely and ‘shamelessly’ referred as “corporate treasuries”. Other culprits are Bitmine Immersion Technologies, Inc. (BMNR) and U.S. president’s family backed American Bitcoin Corp (ABTC).
In a way, these are all piece of junk and in a very precarious situation. Wall Street continues to peddle this kind of piece of sh*t and limitless greed of a mankind continues to drive buying of such crap by the masses and institutions alike.
MicroStrategy continues to average down the price of Bitcoin by more and more purchases (till the game is on) as it has been continually hammered from the peak of $126,000 about 4 months ago. See the chart above. It has amassed over 700,000 Bitcoins at the average price of about $76,000 with an investment totaling $54 billion. All thanks to the Wall Street investors.
Current value? Under $50 billion harboring a loss of $5 billion… and counting. At the 52-week low point just last week, the losses clocked in at a staggering $10 billion.
Where is the bottom? No one knows. Truly, no one has any idea. At least not in a near term. In a long run, likely $1.00 just as the above thesis points out.
Why? The crypto community is up against the wall now. They have run out of all the ammunition. Besides, gold is wide awake from its long slumber and it is not going to let crypto eat its lunch anymore. MicroStrategy certainly is slammed against the wall as no more investors’ appetite with severe fiscal and monetary constraints, not to mention the geopolitical. Many institutions are also doubling down by buying more and more Bitcoins. They all will regret sooner or later in the same vein as MicroStrategy.
Quite a contrast to the Bitcoin is a ‘quiet and giant’ rise of stablecoin such as Tether amassing a huge market capture of crypto commerce backed by the sovereignty of U.S. dollars and gold reserves of $200 billion with about 150 tonnes of gold. Circle (CRCL) is a second-place market leader in the stablecoin market enabling the world of commerce using crypto.
This is all while the major indices such as S&P 500, Dow Jones Industrial Average (DJIA) and NASDAQ continue to hover at or near 52-week highs. No sign of budging much at all. Corrections are gone, so are the bear markets. Excuse me… what do they mean? Only a miracle can make this happen. Certainly, some invisible hand at force as such market behavior has never been witnessed in last few decades of something propping up the market no matter what happens underneath the ‘market hood’. We are truly living in strange times and strange world – from the financial standpoint to political.
In quite a contrast to that, many software companies and tech stocks have been pummeled big time and continue to be. Ouch! Some indiscriminate selling. Yet, what is holding up these indices at their highest level ever? Beats me. It is one of those anomalies of life for which there are no easy answers. We can only speculate and probably assign it to the ‘mass hysteria’.
Clearly, various types of investment rotations are back in vogue as they ought to be. Yet, not anywhere near enough. These rotations and leadership changes can be of any kind such as asset class, sector, growth to value, etc. Yet, the discretion to reward and punish the companies according to their performance is sorely lacking in the current investment environment. It is truly at the sickening level.
Hence, the ‘MarketHealth-o-meter’ continues to show extremely fragile or rather ‘sick’ condition of the market. Nvidia (NVDA), poster boy of the artificial intelligence (AI) mania, hit the new 52-week high about 4 months ago and hit $5 trillion market capitalization. Yet, it has not reached a new high in spite of major market indices staying near all-time high. We pointed out the top of mania in our piece “Nvidia hits $5 Trillion Market Cap: Perfect Time to Run for Cover?” back in October 2025.
For the last 2.5 to 3 years, the leadership has continued to narrow down – from S&P 500 to “The Magnificent 7” (Mag 7 – excluding S&P 493) to even significantly narrowed leadership now. Narrow leadership continues to get narrower and narrower. From Mag 7, the “leadership crown” shifted to Nvidia, then on to the memory makers, low margin commodity business, to keep the markets afloat (for the time being) at the current level all fed by unsustainable amount of debt amongst the big tech companies.
Google selling a 100-year bond early this week clearly marks the height of insanity of the current market. Yes, you read that right – a 100-year bond, not 5, 10, 20, 30 or even 40 years – it is 100 years bond when none of us will be around to redeem at maturity.
In essence, the crypto tech shall survive, though, not as a “store of value” – one of the largest ill-conceived investment mechanism, probably to the chagrin of anonymous ‘Satoshi Nakamoto’, the Bitcoin inventor and largest holder of bitcoins at over 1.1 million, who may have never thought of the world getting swept up in such a herd manner by his innocent invention.
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