Cobra, the pseudonymous maintainer of the bitcoin.org domain, has laid out a bleak outlook for bitcoin’s future, outlining the difficulties the prime cryptocurrency faces.

Addressing the current state of the cryptocurrency market, Cobra said the recent price downtrend has been brutal for bitcoiners, who are demoralized and “barely hanging on,” as he noted on social media. Bitcoin has officially entered bear market territory, having recently lost nearly 20% of its value during the past 30 days

Cobra explained that with the rise of artificial intelligence (AI), owning bitcoin was full of risk and uncertainty, with holders remaining unrewarded for facing all that risk, disincentivizing bitcoin as an investment asset.

Cobra, who was concerned with self-custody issues for a long time, assessed that now, more than ever, self-custody had become a contentious point, as threat actors have a vast array of resources to attack security weaknesses in custody systems.

He alerted about a continued downtrend in bitcoin prices in October, stressing that the upcoming period would be the “most painful winter” given the current cybersecurity landscape as AI outpaces crypto defense systems. At the time, he assessed that many people would get drained and lose their BTC.

Similarly, he acknowledged that the market has been taken over by institutional investors such as Stratregy, with their massive stockpiles entailing their own problems, while retail investors were largely out of the market.

Cobra also stressed that Trump’s crypto allegiance will also affect regulatory aspects now that Democrats have taken control of the House and the Senate, and that the surge of colossal AI-linked initial public offerings (IPOs) will suck up capital otherwise directed to the crypto market, producing models that, at the same time, will affect bitcoin in “unpredictable ways” at some point.

“This and other factors like the Iran war and the AI bubble popping triggering a sell off make owning bitcoin extremely risky right now. OGs will be fine but people who got in recently are really in a bad place,” Cobra concluded.

Analysts like Peter Schiff have recently highlighted the drop in bitcoin prices, calling into question its viability as a store of value and recommending that crypto investors pivot to gold, even as its prices reach critical levels.

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