Author: @wuk_Bitcoin This article does not discuss predictions or macro narratives. From Jason’s perspective, it focuses on three things: how to view Bitcoin as an asset; how to understand this round of decline; and how to look at the long-term development of Bitcoin going forward. It must be made clear that this is not investment advice, but a framework for thinking. Before any investment, ask yourself one question: can you 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 superior “gold” asset. (1) Limited supply, 21 million coins, written into the code, unchangeable by anyone. Gold still has new mining output every year, Bitcoin does not. (2) Extremely transferable. Moving $100 million worth of gold from one country to another requires armed escort; $100 million worth of Bitcoin only requires a string of private keys. In an era of increasing geopolitical and global uncertainty, the transferability of an asset itself commands a premium. (3) Auditable. Every Bitcoin transaction is on-chain and can be verified by anyone. For gold reserves, you can only trust the central bank’s statements. In fact, the US gold reserves have not undergone a real third-party independent audit for many years.

Some people will say, isn’t Bitcoin mainly used in the gray area? This view is outdated. More and more countries and financial centers are legislating and regulating to squeeze out the gray areas. Historically, most disruptive technologies have followed this path. The early internet, early electronic payments, were first chaotic, then regulated. There is another crucial number: the global penetration rate of digital currencies is currently around 3%-4%. You can compare this to the global penetration rate of the internet around 5% when the bubble burst in 2000; e-commerce in China had a penetration rate of about 3% when Alibaba went public in 2014, and 60% ten years later. I’m not saying Bitcoin will necessarily replicate this curve. But, if you believe this is a real and valuable asset class in the long term, then 3%-4% means it is still very early. Early means opportunity, but it also means volatility will be very high!

Second: How to understand this round of decline. Let’s state the facts first: Bitcoin peaked in October 2025 at nearly $126,000. It then fell continuously for four months, with the sharpest drop on February 5-6, 2026, falling 15% in a single day and briefly breaking below $61,000. The Fear and Greed Index dropped to single digits, an extreme range that has only occurred a few times in history. The next day, it rebounded 11%, reclaiming 70,000. This is Bitcoin; its volatility is several times that of traditional assets. If a 15% drop in a day keeps you up at night, then this asset might really not be for you. This is not a matter of ability, but of nerve tolerance.

So why did it fall? My judgment is that this was a cyclical sell-off under high consensus. Bitcoin has a very clear four-year cycle because its mechanism is halving every four years. Historically, the peak of the cycle has been reached 12-18 months after each halving, followed by a pullback. The last halving was in April 2024, and the peak was in October 2025, about 18 months later, almost perfectly matching history. This is not a prediction, it is consensus. And consensus means that old players who have experienced multiple cycles will start to systematically sell during this period to lock in profits. Long-term optimism and phased selling are never contradictory. Gold fell from $1900 in 2011 to $1050 in 2015, a drop of 45%, and later rose to nearly $5000 today.

What’s truly different this time is ETFs and the handover. The US approved Bitcoin ETFs in 2024, which is indeed important because it provided a compliant entry point for a large amount of institutional capital at once. But many people overlook this: ETFs brought in new buyers, but they didn’t allow old buyers to exit early. In the past, Bitcoin holders were mainly two types of people: early miners and the first batch of believers (OGs), whose costs were extremely low, some even in the hundreds of dollars. When Bitcoin saw a large number of institutional buyers and rose all the way to $120,000, if you were them, would you sell? Most likely, yes. Therefore, I believe this round is essentially not that Bitcoin is failing, but that it must undergo a historic handover before becoming a mainstream asset. From early believers to long-term institutional allocators. ETFs are just the first step, and the handover may not be over yet.

A frequently overlooked pattern: If you look at Bitcoin’s major drawdowns throughout history, you’ll find an interesting phenomenon. From $32 in 2011 to $2, a 93% drop; from $1100 in 2013-2015 to $170, an 85% drop; from around $20,000 in 2017-2018 to $3200, an 84% drop; from $69,000 in 2021-2022 to $15,500, a 77% drop; from 2025-2026 to date, a drop of about 50%. The decline in each cycle is narrowing. This usually means one thing: the asset is maturing, volatility is decreasing, because the holder structure is changing. Of course, a 50% drawdown is still large, but this is not a bug, it’s a feature. High volatility is the price you pay for excess returns. If Bitcoin only had 5% volatility, its long-term returns would be similar to government bonds.

Third: So how to look at it in the long term? I have a simple framework: if you believe Bitcoin is digital gold, then its long-term value should be benchmarked against physical gold. Today, gold’s market capitalization is about $20 trillion. When Bitcoin was at $70,000, its total market cap was about $1.4 trillion, only 7% of gold’s. Even if this narrative is only half realized, with Bitcoin reaching 30%-50% of gold’s market cap, the upside from today’s perspective is still huge. But I must honestly tell you two things: I really don’t suggest you buy now. The handover may not be over, the short-term market is still fragile, 50% might not be the bottom, or it might be. Nobody knows; those who know are gods. There is still no investment advice here. The volatility of digital assets is not suitable for most people.

What is the real risk? Some people will ask if Bitcoin will go to zero. Personally, I think the probability of it going to zero is probably lower than the probability of it reaching half of gold’s market cap in the long run. The real risk is often not in the asset itself, but in two things: (1) Your position structure. If you go all-in, use leverage, or use money you shouldn’t, even if Bitcoin rises 10 times in the future, you might be forced out halfway, and in the ugliest way. (2) The depth of your understanding of the asset. If you only listen to others say it will rise, you definitely won’t be able to hold on when it drops 50%. Only by truly understanding its underlying logic can you remain rational during a sharp decline. Let me do a simple math problem for you: if this cycle is the same as the last one, with a drop from peak to trough of 75%, and you bought at a 50% drop, can you still withstand another 50% drop? This is not prediction, it is arithmetic.

One last comparison: In 2000, a company we are all familiar with saw its stock price fall from $113 to $5.5, a 95% drop. At that time, everyone said the internet bubble had burst and e-commerce was finished. Today, this company’s stock price is about $240, an increase of about 42 times. It’s Amazon. Looking back, it’s easy, but the prerequisite is: you must survive until that day. It’s the same with Bitcoin. The long-term logic hasn’t changed, but short-term volatility is enough to kill anyone who doesn’t manage their positions. So what’s truly important is never whether it will rise, but whether you can survive until it rises.

Finally, I want to ask a question: When gold has risen 60% and Bitcoin has fallen 50%, do you think the narrative of digital gold has failed, or does it indicate that this round of handover is not yet over? Is Bitcoin evolving from a speculative asset to an allocation asset? Or is it fundamentally just speculation? How you answer actually reveals your most fundamental belief in this asset class.