BTC has been my largest total asset position for most of the past few years (it is no longer the case now).

During this BTC bull market cycle:

• At 70,000 I reduced the slight leverage I had added during the deep bear market (around 1.1-1.2 times, completed through BTC collateral lending);

• At 100,000-120,000, I lowered my BTC position from full holdings to around 30%.

There were also some minor operations during this period, such as slightly increasing my position during the BTC pullback to 50,000+ in 2024 and slightly increasing my position when BTC spiked to 60,000 this February. All these operations are based on my long-term positive outlook on BTC.

According to the usual cyclical logic, now is a good time to accumulate more BTC and then wait for the next bull market cycle to arrive. However, during the recent rebound in BTC, I further reduced my already low BTC position to about 30% around the 78,000-79,000 range.

It is necessary to continuously track the assets you hold, regularly conduct fundamental assessments, and reducing my BTC holdings is also the result of ongoing assessments and deliberation. The conclusion is that I will lower my expectations for BTC's market value in the next bull market peak.

Let's sort out the reasons:

First, the potential energy driving the next bull market cycle of BTC is not as sufficient as in previous cycles.

In previous cycles, there were expectations of exponentially expanding investor communities for BTC, going from niche fintech experiments to mainstream public and institutional asset allocations, and this narrative has gradually played out in every past cycle.

In this cycle from 2023 to 2025, it entered mainstream financial institutions through the launch of compliant ETF products and received strong endorsement from financial institutions such as BlackRock + a strong push from the president of the world's largest country. To elevate the narrative further, it would need to integrate into the balance sheets of sovereign nations, for example:

1. More sovereign funds (currently mainly from Abu Dhabi)

2. Central bank reserves

Purely government budget reserves (such as in U.S. state finances) may not be sufficient, as their purchasing power is quite limited and far behind traditional financial institutions.

However, in my view, achieving this leap in the next 2-3 years is still quite difficult. Originally, there was an expectation that BTC would enter the U.S. Federal Reserve during this bull market, but this hope was basically invalidated last year.

Currently, there are even very few U.S. states that have passed Bitcoin reserve bills. In early 2025 at the peak, there were over 20 states in the U.S. pushing for such bills; now, only a small number have ultimately passed, and some bills are "half-baked" reserve bills that require separate proposals for budget appropriation.

Currently, central banks of major countries still show no obvious interest in BTC. The short history of consensus, excessive volatility, and the presence of gold as a competing product make it very difficult for BTC to enter central bank balance sheets.

Second, is the increase in my personal opportunity cost.

In the past six months, I have gradually discovered several good companies whose current prices are quite attractive, which will be the main direction of my portfolio adjustment (another part is to increase some cash reserves).

Third, the overall downturn in the crypto industry negatively affects Bitcoin demand and consensus.

Currently, there are very few viable business models in the crypto industry; most Web3 models (socialfi, gamefi, depin, distributed storage/computing, etc.) have been gradually disproven over time. In reality, the only model that can generate positive cash flow and create profits is DeFi. However, DeFi has also developed only moderately in the latter half of this cycle, one of the main reasons being the shrinkage of quality native assets in the industry, leading to a decline in DeFi business (still mainly based on lending and DEX trading).

The overall shrinking of the crypto industry base, along with the reduction of practitioners and investors, will also slow down or even lead to a loss in the growth of BTC holders' base.

Hypeliquid, as an on-chain exchange, is an outlier that has seen counter-cyclical growth. However, much of its success still comes from capturing a share of the existing Cex market + incorporating trading of assets outside crypto (commodities, U.S. stocks, pre-IPO assets) for all-weather transactions, providing little value transfer to BTC. Relying on regulatory arbitrage, the one-off success of Hypeliquid cannot hedge against the overall trend decline in the industry (the impacts of predictive markets are similar).

Fourth, the financing costs for BTC's largest buyer, Strategy, continue to rise.

Currently, its main financing method is through issuing perpetual preferred shares (STRC) to raise funds, with financing rates having risen to 11.5%. Moreover, they are about to shift from monthly interest payments to bi-weekly payments, otherwise, it will not stabilize the market price of STRC. This gives me a bad feeling, even though Strategy's current financial situation is still far from a so-called crisis.

Additionally, we can see that the previously very active BTC DAT concept stocks have essentially all died out except for Strategy, which remains as a solitary case. Strategy does not need to actually face a crisis to exert pressure on BTC prices; as the largest publicly listed holder and net buyer of BTC, the slowdown in its buying pace and the exhaustion of its financing capability can trigger significant marginal selling pressure.

Fifth, Bitcoin's main competitor in the non-sovereign asset arena (value proposition: anti-fiat inflation) — gold — has pulled closer to Bitcoin in product offerings.

We previously said that “electronic gold” (Bitcoin) is superior to gold because of its better divisibility, portability, verifiability + decentralization.

However, this cycle has seen the emergence of “tokenized gold” products, which have no difference from Bitcoin in terms of verifiability, portability, and divisibility and are rapidly growing in scale.

(Reference: rwa.xyz statistics on the scale of tokenized commodity assets, most of which are tokenized gold)

Of course, many people will say that tokenized gold relies on centralized trust, but in my view, whether it relies on centralized trust is not a necessary condition in the crypto industry, because one of the core infrastructures of the entire crypto industry — stablecoins — is mostly based on complete centralized trust.

Sixth, as Bitcoin undergoes halving, the issue of insufficient security budgets is becoming more severe.

(The exploration of new fee sources such as inscriptions, BTC L2, etc. has basically failed). This is a somewhat repetitive issue, but it remains a problem. Rather, I don't think quantum computing poses a significant threat; the community already has solutions.

Summary and Q&A

Of course, even after reducing my position, I still have a positive outlook on BTC; otherwise, I should have exited completely. It still remains one of my larger holdings, and I hope it can rise further.

There may be other questions:

• Why reduce now?

  Because there has been quite a rebound recently, so I decided to reduce a bit.

• What if it goes up after reducing?

  If the reasons I mentioned become loosened or invalidated due to more external and internal environmental changes, or if more previously unconsidered positive factors appear, and at that time the price does not seem too high, I will consider buying back.

  If the price has risen to a level that makes it unsuitable to buy back, then it indicates that my understanding does not match the asset, and I will accept the outcome.

This is just one person's opinion and is for reference only.