Original Title: "Bitcoin on the Verge"

Written by: Jordi Visser

Translated by: Carbon Chain Value

The author is a professional investor with over 30 years of experience in traditional finance and macroeconomics on Wall Street.

The dilemma is real.

To be honest, the sentiment in the cryptocurrency market is very poor right now.

The S&P 500 is nearing all-time highs. The Nasdaq index is soaring. Gold prices have just broken through the $4,300 mark. Tech stocks are also on the rise. From all traditional indicators, we are in an environment of heightened risk appetite. Funds are pouring into risk assets. Investors are eager to buy.

What about Bitcoin? Bitcoin… has done nothing.

It’s been consolidating. Stagnating. Boring. No matter how you describe it, it doesn’t mask the frustration that permeates the Bitcoin community. Twitter is filled with various versions of anxious questions: "Why hasn’t Bitcoin surged like other cryptocurrencies?"

Cognitive dissonance is evident. Bitcoin ETFs have been successfully launched, and funds are flowing in every month. Institutional adoption is accelerating. The "Genius Act" has passed, and the "Clarity Act" is on the way. There’s no regulatory crackdown, no major hacks, and no fundamental narrative collapse. Everything that should matter… has happened.

Yet, what we see now is other asset prices rising while Bitcoin remains stagnant.

Over the past few years, my connection with the cryptocurrency community has deepened, giving me a unique perspective. I have observed both the traditional fiat financial system and the cryptocurrency ecosystem and have begun to notice a pattern that reminds me of the world I grew up in. The similarities between the two are obvious, and the differences are equally significant. But sometimes, the similarities manifest in unexpected ways.

What if everyone is looking at it wrong?

What if Bitcoin isn’t in trouble, and it’s actually on the verge of an IPO similar to Tradfi?

A Bridge Connecting Two Worlds

The reason I have benefited greatly from the cryptocurrency space is that I have not abandoned my understanding of traditional markets. I have always carried this perspective. Moreover, I increasingly find that despite its revolutionary and decentralized origins, Bitcoin follows an economic model as old as capitalism itself.

Early investors take on significant risks. If their investments succeed, they deserve substantial returns. But ultimately, and this is crucial, they need to realize those gains. They need liquidity, they need exits, they need diversification.

In traditional terms, this moment is called an IPO (Initial Public Offering). It’s the moment when early investors cash out, founders get rich, and venture capitalists return funds to their limited partners. This is not a moment of failure, but a moment of success. Companies do not perish during an IPO; they transform, mature, and ownership becomes dispersed.

Bitcoin has never undergone a traditional IPO because it has never had a company. But economic forces do not disappear due to structural differences; they simply manifest in different ways.

The Divergence Tells the Story

Let’s talk about the current market situation.

Bitcoin’s movements are closely tied to tech stocks, liquidity, and "risk appetite." For years, one could predict Bitcoin’s movements by observing the Nasdaq index. But this correlation has completely vanished recently, especially after December 2024.

This is perplexing. It confuses algorithmic traders. It also confuses momentum investors. When risk assets rise and Bitcoin does not participate, people start to think "there’s something wrong with Bitcoin."

But what I’ve learned from observing traditional markets is that this is exactly what happens during the IPO dividend period.

When a company goes public and early investors start selling shares, even in a rising overall market, stock prices often enter a consolidation phase. Why? Because there’s a special dynamic at play. Early investors are not panic selling; they are methodically diversifying their holdings. They are very cautious, not wanting to let the stock price plummet. They are patient, having waited years for this moment, and they can wait a few more months to ensure the operation is executed properly.

Meanwhile, new investors also begin to enter the market, but they are very cautious. They are not chasing prices; they are buying on dips. They are waiting to take aggressive strategies after the dividend distribution is complete.

The result? Consolidation that drives people crazy. The fundamentals are fine, the market is rising, but this stock is… going nowhere. Don’t believe it? Look at Circle or Coreweave. They both had a surge after their IPO pricing but then fell into consolidation.

Sound familiar?

If this is a macroeconomic-driven weakness, Bitcoin’s downward trend should align with risk assets, not diverge from them. If this is truly the so-called "crypto winter," we would see panic, capitulation, and a synchronized sell-off across the entire cryptocurrency market. However, what we see is a more specific phenomenon: a methodical, patient wait for stable quotes to sell.

This selling approach expresses "I’m done, it’s time to move on," rather than "I’m scared."

Evidence Continues to Mount

Then, I received an unexpected but perhaps predictable confirmation.

In the recent Galaxy Digital earnings call, Mike Novogratz announced that Galaxy sold $9 billion worth of Bitcoin for a client. $9 billion! Think about that number. This is not retail panic, nor is it a trader caught in a position. This is one of the industry’s veteran players methodically closing positions.

But they are taking profits, realizing gains. When assets mature and ultimately have enough liquidity to support large-scale exits, what they are doing is exactly what early investors should do.

But the fact is: that veteran is not alone.

If you know how to interpret on-chain data, you can see clues. Some old coins, those that haven’t traded for years, some even dormant since Bitcoin prices fell to single digits, are suddenly becoming active. This hasn’t happened overnight, nor is it panic selling; it has been a steady development since this year, especially after summer. This development is gradual. Those addresses that accumulated during Bitcoin’s early cypherpunk experiment are finally starting to move their holdings.

Look at the Fear and Greed Index, look at social sentiment. The overall morale is low, retail is collapsing. This is exactly the emotional state expected when savvy investors direct funds toward weaker investors.

But most people overlook one point: if you understand the stage we are in, this sentiment is actually bullish.

The Psychology of Original Holders

Put yourself in the shoes of someone who mined Bitcoin in 2010 or bought Bitcoin for $100 or even $1,000. What would you feel?

You’ve weathered the Mt. Gox exchange collapse, survived multiple Chinese bans, endured the 2018 bear market, navigated the COVID pandemic, dealt with regulatory uncertainty, and faced mainstream media calling it a scam for over a decade.

When almost no one believed, you did. You took the risk. In the end, you won. Bitcoin’s success far exceeded almost everyone’s expectations.

So what now?

You hold generational wealth. Life circumstances change. Maybe you’re about to retire. Maybe your kids are in college. Maybe you want to diversify into AI, or buy a yacht like Jeff Bezos, start a company, or simply enjoy the fruits of your patiently accumulated wealth.

And for the first time ever, you can exit your position without disrupting the market.

This is a new situation.

For years, Bitcoin’s liquidity has been insufficient. Imagine selling $100 million worth of Bitcoin in 2015; the price would plummet. Now imagine selling $1 billion worth of Bitcoin in 2019; the problem remains. The market simply could not absorb such a massive sell-off.

But what about now? ETFs are providing the demand from institutional investors. Large companies hold Bitcoin on their balance sheets. Sovereign wealth funds are also getting involved. The market has finally matured to the point where early holders can exit large positions without causing chaos.

The key is: they choose to trade in an environment of heightened risk appetite precisely because buyers have ample funds at this time. When the stock market rises, market confidence is high, and liquidity is abundant, it’s the best time to allocate funds. Selling in a panic would lead to a Bitcoin crash. But selling when other assets are strong? That’s smart business strategy.

This is what the veteran whales have been waiting for. Not price, but liquidity. Market depth. And the real ability to exit.

Mission accomplished. Bitcoin has proven its value. Now, the rewards are coming.

Why This Is Not a Bear Market

I can almost hear the voices of skeptics: "This sounds like you’re making excuses for the upcoming bear market as the four-year cycle is about to end."

That’s right. So let’s talk about why this is fundamentally different.

Bear markets are driven by fear, by changes in the macroeconomic environment, and by a loss of confidence in potential market narratives. Remember 2018? Exchanges were collapsing, ICO scams were exposed, and the entire market was rife with fraud. People sold Bitcoin because they feared it would drop to zero.

Remember March 2020? The global pandemic hit, and everything collapsed. People needed cash to survive and sold off assets.

The current situation is not like that.

Right now, Bitcoin’s fundamentals are arguably the strongest they have ever been. ETFs have been approved—something everyone thought was impossible—now it’s a reality. Institutional adoption is accelerating. The halving, which occurs every four years, is on schedule, as precise as a clock. The network is more secure than ever. Hash rates have reached all-time highs. The adoption of stablecoins is accelerating, tokenization is imminent, and network effects are about to explode. The dream of cryptocurrency is finally becoming a reality.

Even so, everyone must remember that it has only been three years since cryptocurrency was in its darkest period, when prices plummeted, fraud was exposed, and regulators took severe countermeasures. Currently, altcoin prices are still 20% to 50% lower than their peaks back then. For the past two years, Bitcoin has been the backbone of the entire cryptocurrency market.

Before the cryptocurrency bubble burst, venture capital and hedge funds were the main investors in the cryptocurrency space, but they have yet to recover. The rise of AI has disrupted investments in both cryptocurrency and SaaS, and they are still licking their wounds.

Sellers are not selling out of a loss of confidence; they are selling because they have won.

This is the key distinction.

In a bear market, buyers are few and far between. Price drops occur because everyone wants to sell, and no one wants to buy. But look at the reality: Bitcoin is consolidating, not crashing. Every dip sees buyers stepping in. Prices are not making new lows; they are fluctuating within a range.

Buyers are indeed entering the market, but they are not aggressive or impulsive. They are patiently accumulating, waiting for the distribution to complete.

This is exactly the pattern seen after the lock-up period ends for large IPOs. Stock prices do not crash; they enter a consolidation phase. Early investors sell, and new long-term investors buy. Ownership shifts from visionary investors to institutional investors.

Lessons Learned from Traditional Markets

If you want to understand Bitcoin’s current stage, look at what happened to the greatest tech companies after their IPOs.

Amazon went public in 1997 with an initial price of $18 per share. Within three years, the stock price soared to $100. However, in the following two years, despite the continued growth of the internet, Amazon's stock price barely increased. Why? Because early investors and employees were finally cashing out. They began to sell their shares. Many who believed in Amazon when the stock was at $1 also sold when it reached $100. Their choice was not wrong; they achieved a 100-fold return. But Amazon's stock price had to digest these sell-offs before it could continue to rise.

Google went public in 2004. For nearly two years after its IPO, its stock price remained in a consolidation phase. Facebook experienced a similar situation, where the end of the lock-up period in 2012-2013 led to significant price fluctuations and consolidation.

This is normal. This is healthy. This is what success looks like.

At this stage, companies do not go bankrupt, and assets do not disappear. What happens is a transfer of ownership. Early investors pass the baton to a new generation of holders who buy at higher prices and have different investment horizons.

From cypherpunks to institutions; from liberal idealists to corporate finance departments; from devout believers to trustees managing billions of dollars.

It is neither good nor bad; it is simply evolution, the natural lifecycle of a successful asset.

The Transition Ceremony

This transformation is profound and worthy of affirmation.

Bitcoin was born from an idea. It was created by a group of cypherpunks who believed in decentralization, escaping government control, and valuing mathematical certainty over institutional trust. Early adopters were rebels, outliers, and visionary pioneers who saw what others could not.

These individuals are now receiving a fulfilling conclusion. They are passing the torch. And the torch is being taken up by those who care less about ideology and more about returns. BlackRock does not care about "being your own bank." They care more about portfolio diversification and risk-adjusted returns.

Is this a loss? To some extent, yes. Bitcoin may never replicate that early explosive growth again. The era of achieving a hundredfold return in a year may be gone forever. As ownership becomes increasingly dispersed, the volatility that once created massive wealth will gradually diminish.

But this is also a victory. Because Bitcoin has survived long enough to become boring. It has achieved such thorough success that the original believers can now cash out. It has proven its value, and even the most conservative financial institutions in the world are buying it.

More importantly, from a market structure perspective, this distribution is very favorable in the long run.

Why Diversification is Better than Concentration

One thing I learned from observing traditional markets, which applies completely to Bitcoin, is that concentration is fragile, while diversification is anti-fragile.

When Bitcoin was primarily held by a few thousand early users, the market itself was extremely unstable. The actions of a few wallets could have a massive impact on the price. A single person's decision to sell could trigger a chain reaction that affected the entire market. Price volatility was severe because the holder group itself was unstable.

But as ownership becomes dispersed, with millions of investors holding smaller positions rather than thousands holding large positions, the market structurally becomes more stable.

Let’s think practically: if 100 people own 50% of the supply, and one person decides to sell, then only 0.5% of the supply enters the market. This is enough to cause market fluctuations. But if 1 million people own 50% of the supply, and 10,000 decide to sell, although it is still only 0.5% of the supply, this supply will be spread across thousands of transactions, and over time, these supplies will trade on different platforms at different times and prices. However, the impact of this trading will be sufficiently diluted.

This is exactly what happens after an IPO. The initial shareholder base is very small, mainly consisting of founders, early employees, and venture capitalists. After the IPO and the end of the lock-up period, the ownership structure becomes dispersed. The number of shareholders increases from hundreds to millions, including index funds, retail investors, and institutional investors.

Stock volatility decreases not because the company is less attractive, but because the ownership structure is more robust.

Bitcoin is currently undergoing this transformation. Those "big brothers" who once could sway the market with their actions are now selling Bitcoin to thousands of institutional investors through ETFs, to millions of retail investors through exchanges, and to corporate finance departments and pension funds.

Every Bitcoin that shifts from concentrated holders to dispersed holders enhances the network's resilience, stabilizes prices, and matures the asset.

Yes, this means that the crazy periods of tenfold growth may be over. But it also means that the risk of catastrophic crashes due to concentrated sell-offs is decreasing.

A diversified holder base is what distinguishes speculative assets from durable stores of value. It is this distinction that allows an asset to evolve from a "magical internet currency" to a "global monetary asset."

Future Timeline

If this argument is correct (and I believe the evidence strongly suggests it is), what should investors expect?

First, patience is required. The IPO distribution period typically lasts 6-18 months. We may have already entered this process for a few months, but it may not be over yet. Additionally, Bitcoin's price cycles are much faster than those of fiat assets. I believe Bitcoin's price has already exceeded a six-month cycle. Currently, the market is expected to continue consolidating. Bitcoin will not rise like risk assets and is likely to continue disappointing the market. Market sentiment will remain low for a while, but be cautious—there will be no clear signals when the market quietly starts to move, as the positive factors have long been in place.

Second, volatility will decrease. As ownership becomes dispersed, the severe fluctuations common in past cycles will ease. The 80% drawdowns that were once common may drop to 50%, and 50% drawdowns may fall to 30%. Tenfold increases may reduce to threefold. This will disappoint those addicted to gambling but will excite risk managers.

Third, the correlation between Bitcoin and traditional risk assets may restore, but this will only happen after the current distribution phase is complete. Once the old whales stop selling and ownership is sufficiently dispersed, Bitcoin may again begin to follow market sentiment fluctuations, but it will be more stable and less volatile.

Fourth, and crucially: market sentiment will only improve after Bitcoin has largely completed its distribution. Currently, people are feeling down because they do not understand what stage we are in. They are still waiting for Bitcoin to "catch up" with stocks. They are worried about the four-year cycle. Please be patient. Once the selling pressure is relieved, and the original supply accumulated by institutional investors is digested, the path forward will become clearer.

The exact timeline cannot be predicted. But if you have seen similar situations in traditional markets, this pattern is recognizable.

Maturation of Asset Classes

Every revolutionary technology undergoes such an evolutionary process.

In the early days of the internet, there was a group of loyal believers who created companies without a business model, simply believing that network connectivity would change the world. Their belief was correct. Many accumulated vast wealth as a result. Then, the internet bubble burst, the industry consolidated, and ownership shifted. Dreamers made way for doers. The internet did not perish; it actually fulfilled its promise, just taking longer than initially expected.

Personal computers, mobile phones, cloud computing, artificial intelligence… the developmental trajectories of every transformative technology are quite similar. Early supporters took on significant risks. If the technology succeeded, they deserved substantial returns. Ultimately, they realized those returns. Then there would be a transitional period that seemed like failure but actually represented maturity.

Bitcoin is following this pattern.

The veteran holders of Bitcoin took risks when it was possible for Bitcoin to go to zero. They endured ridicule, regulatory uncertainty, and the various difficulties of early technology. They built the infrastructure, survived the collapse of Mt. Gox, weathered the scaling debates, and actively promoted Bitcoin when it was ignored.

They won. They succeeded. Bitcoin is now an asset valued at over $1 trillion and recognized by the largest financial institutions in the world.

Now they are enjoying the profits they have worked hard to earn.

This is not the end of Bitcoin, nor even the beginning of the end, but rather the end of the beginning.

From speculation to institutionalization. From cypherpunk experiment to global asset. From concentration to dispersion. From volatility to stability. From revolutionary to foundational.

Opportunities in the Distribution Field

What convinces me of this is that I now understand the situation on both sides.

I understand how traditional finance operates. I understand the IPO model, the end of lock-up periods, and the accumulation by institutional investors. I also understand the cryptocurrency community, their hopes, frustrations, and their firm belief that this time will be different.

Sometimes the situation is different, and sometimes it is not.

Bitcoin's current situation is not different. The economic forces that have dominated the market for centuries still exist; they are just playing out in a whole new context.

The frustration people are feeling right now? It is not a sign of failure. It indicates that we are in the most difficult stage of the journey, where early believers choose to exit, and later believers feel they are missing out. This is unsettling and frustrating, but it is necessary.

And for long-term investors, a crucial insight is that once this distribution phase is complete, Bitcoin's structure will be stronger than ever.

When assets are dispersed among millions of investors rather than concentrated in the hands of a few thousand early whales, the asset becomes more resilient, less susceptible to manipulation by a single entity, more stable, more mature, and better able to absorb real capital without experiencing severe volatility.

The IPO is nearing its end. The veteran whales are cashing out. Let them exit; this is their well-deserved reward. The Bitcoin left behind will be stronger, more dispersed, and more resilient than the version they accumulated.

That is not a reason for despair, but a reason for accumulation.

The volatility of Bitcoin at its inception was its inevitable cost, and its stability will be the proof of its maturation.

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