Crypto’s Golden Era Starts to Rust as Bitcoin Enthusiasts Battle Paper Losses and Existential Dread
Bitcoin’s post-peak reality is setting in. The cryptocurrency has surrendered roughly one-third of its value since hitting record highs in Oct. 2025, and the wreckage extends far beyond price charts. This market reset is leaving retail investors who bought the “bitcoin superpower” trade with a harsh lesson — political promises don’t override market fundamentals.
Emotional whiplash: The downturn has been especially painful because it followed peak euphoria. After spot bitcoin ETFs launched and President Trump returned to the White House promising regulatory clarity, crypto bulls convinced themselves 2025 would echo 2021. That confidence has since faded as investors have pulled a net $227M from spot bitcoin ETFs through Jan. 28, driven by AI diverting capital elsewhere, a softer job market, and rising geopolitical risk pushing traders out of their riskiest positions. Chicago car salesman Gennaro Salemme warned, “It’s a mess out there. The vibe right now is stay alive.”
- Bitcoin traded around $76K yesterday, down nearly 40% from its October record above $126K, while Ethereum hovered around $2.3K, off 53% from last summer’s highs.
- StrategyMSTR has fallen 61% since bitcoin’s 2025 high, while ether-accumulation firm BitMine Immersion TechnologiesBMNR is down 57%.
The Hoarding Model Hits a Wall
Sentiment is dropping across the board. The crypto-treasury play that once rewarded companies for stockpiling digital tokens is now turning punitive. Strategy’s model — issuing debt and equity to buy bitcoin, then trading at a premium to its holdings — worked as long as prices rose. That premium, measured by the company’s market net asset value (mNAV), has since collapsed from above 2 last year to barely above 1 today. If it slips below 1, Strategy could be forced to sell bitcoin to buy back shares — the very scenario Michael Saylor long insisted would never happen.
- Strategy booked a $17.44B unrealized loss in Q4 2025 and still holds over 700K bitcoins, even buying 855 more at an average of ~$88K last week.
- BitMine Immersion Technologies owns roughly $16.4B of Ether at an average cost of $3.83K, and is still adding exposure despite massive paper losses.
Crystal ball gazing: Two Prime’s CEO Alex Blume said the crypto-treasury model pioneered by Strategy is “largely dead” for all but the biggest players with scale, warning that firms without real operating businesses risk failing. In plain terms, the accumulation trade only works if prices keep rising and investors keep paying premiums — neither of which is happening. The strain is showing among retail investors, with exhaustion replacing conviction and many choosing to hold on simply because, as one employee at a crypto asset-management firm put it, “There’s no point in selling when you’re down 90%.”