CryptoQuant CEO Ki Young Ju stated that the biggest risk for Bitcoin may be a multi-year recession rather than sharp price declines. According to Ju, while deep pullbacks can be tolerated with the expectation of a new rise, prolonged inactivity weakens investor confidence and brings the inflow of new money into the market almost to a halt.
Warning of erosion in Bitcoin narrative
Ju argued that the approval of spot Bitcoin ETFs and increasing regulatory acceptance in the US has significantly eroded the underlying narratives of the early cryptocurrency ecosystem. According to this assessment, Bitcoin is starting to look more like a regular investment vehicle used by financial institutions, and the stories that stood out in the past have largely been exhausted.
In the same evaluation, it was stated that Bitcoin was traded more like technology stocks, rather than as a hedge against global crises. It was reported that some of the early supporters turned to other projects, and the rapid development in the field of artificial intelligence increased concerns about the long-term effects of quantum computing.
Ki Young Ju emphasized that sharp declines can be overcome by waiting, but years of market compression can erode investor confidence and paralyze new liquidity inflows.
Remarkable contradiction in on-chain data
According to CryptoQuant data, intra-blockchain activity reached record levels during a period when the price remained flat. Microtransactions under 0.01 BTC accounted for nearly 80% of total movements on the network. This rate was below half of the total transactions in 2023.
The picture that stands out in the news is that the density on the network is not due to new capital inflow, but rather to technical factors. Ju stated that this mobility within the blockchain does not support the price, and the big players continue to wait on the sidelines.
Pressure on Strategy is increasing
It was stated that the prolonged horizontal course also put pressure on large-scale investment structures. It was stated that the continuous purchasing-based approach of Strategy, headed by Michael Saylor, has become more fragile in an environment where no price increase is seen. The company’s STRC preferred shares hit their lowest level ever, falling to $85.32 and trading 13% below par value.
Strategy is viewed as a company known for its high Bitcoin presence on the balance sheet. The prolonged recession is narrowing the market premium on such instruments and straining Saylor’s capital raising mechanism, according to Ju.
Ju said that his intention was not to ask Michael Saylor to save Bitcoin, but that if a new and strong narrative does not come to the market soon, Strategy may face margin call pressure and be forced to sell some of its 846,842 BTC to cover its debts.
At the heart of Ju’s assessment was the view that Bitcoin needs a simple and clear focal point to attract the new wave of liquidity. Otherwise, it was warned that a long-term loss of interest could create a more permanent pressure on the market rather than a price drop.
