Zooming in, rather than out While long-term risks have instilled sell-side pressure, medium-term factors point toward strength, not weakness, and with BTC currently at deep value, the case for material upside is far more plausible than an 80% drawdown repeat. Digesting what has been Bitcoin is currently in its deepest correction since the 2022-23 bear market. What led us here was a combination of derivatives hybris, and supply distribution. OGs, as determined willing sellers, have set cash aside for potential rainy days, whereas speculators have burned their cash in the casino. From this, broadening fears have emerged. ETFs emerged to become huge net sellers in November, and CME activity of late points toward a TradFi market not willing to touch BTC with a ten-foot pole. Conditions have been rowdy in equities as well, but nowhere near the pressure faced in BTC, leading BTC to trade at its weakest relative level to Nasdaq since November 2, 2024. Positive news hardly makes an impact, and now the animal spirits are scrambling for reasons to sell, rather than buy. Three major themes have made fear-instilling headlines recently. To varying degrees, these themes qualify some sense of concern, but all of them share the commonality that they cover hypothetical problems in a relatively distant future. While markets are forward-looking, they are also very prone to overemphasizing the gravity fueled by the current market mojo. I will cover the three reasons of concern briefly below. Bitcoin and Quantum Computing Nic Carter has laid out the quantum-computing risks to Bitcoin extremely well. The risks are real, around 6.8m BTC would be vulnerable if cryptographically relevant quantum computers emerge, but the timeline remains uncertain, even with 2025’s breakthroughs. His core point, which we share, is simple: Bitcoin developers should start coordinating on solutions now, not later. That said, for the market, this is a risk many years into the future. More eyes on the issue are likely to lead to more proposals for solutions, and time is still on the side of Bitcoin. It’s also challenging to envision a future where exchanges willingly allow quantum-compromised BTC to be moved into the order books and sold alongside any regular BTC. Yes, you own the private keys, but can you document how you obtained them? In its nature, QC taken BTC is not significantly different from stolen BTC, which has proven very hard to sell over time (see North Korea or Razzlekhan ft. Lichtenstein). QC is a long-term problem to be solved for BTC. But not a short-term issue justifying fear-driven selling. MSTR to sell Bitcoin Some treasury firms have shifted into the opposite flywheel mode, selling crypto to buy back equity and push shares above mNAV. This causes direct sell-side pressure in BTC from these companies; however, the current suspects are immaterially sized BTC treasuries. But what if? What if Strategy’s hands were forced, and they started to deploy their 650,000 BTC stack to defend their share price? Yesterday’s hilariously retail-friendly spaceship illustration from Strategy heightened concerns that MSTR might sell BTC to defend its share price. Sailor presented the optionality of selling BTC, either directly or through derivatives, to finance debt obligations. That’s the first time Sailor has vocally opened the door for selling BTC. This optionality has second-order effects; it may lead MSTR shares to trade more robustly at NAV. Allow me to be blunt. Nothing suggests that Saylor has any interest in selling BTC to fund fiat obligations, as it would be a potential death trap that the company would likely push hard to postpone and hopefully avoid. This was also clear from the announcement, which revealed that MSTR had raised over $1.44 billion in cash within 8.5 days for a USD reserve. This leaves MSTR runway to pay dividend obligations until September 2027. More cash may be raised, and the problem is already pushed 21 months into the future. While a pure BTC treasury strategy may offer inefficiencies for an investor relative to holding BTC spot, a structural market issue of MSTR’s hands being forced into selling BTC is many years into the future, and not a short-term issue justifying fear-driven selling. Tether’s unconventional backing Tether earns $500 million a month, generated by U.S. Treasury yields. Nearly 80% of its reserves are in low-risk, comfortably yielding instruments. 13% of their reserves are in gold and BTC. While Tether’s unconventional reserve mix and long-standing transparency debate remain valid discussion points, Tether has $7 billion in excess equity over its $184.5 billion stablecoin liabilities. Additionally, the Tether Group has $23 billion in retained earnings as part of its equity. Tether has the cushion to withstand a bank run of significant proportions, and while unconventional, nothing suggests that any near-term calamity will hit Tether. In our opinion, it’s far more likely that Tether continues to generate massive profits with a very lean corporate structure, and that the group is very far away from any situation forcing them to sell BTC. Three problems many years into the future, how does the near-term opportunity window look? Above, I presented three risks eyed by the market over recent weeks. They share in common that they are all many years away from even being remotely plausible of coming into fruition. Let’s try to navigate a timeline in closer proximity instead. 1. Donald Trump signed an executive order on August 7, instructing regulators to update rules and enable crypto (and other alternative assets) in 401(k) plans. The SEC, DOL, and U.S. Department of the Treasury will have to produce joint compliance guidance and safe-harbor provisions for this initiative by February 3, 2026. Very soon, crypto funds may become a reality in the $9 trillion 401(k) suite. 2. The CLARITY Act is likely months away from passing and being signed into law. With it, tier-1 bank led use of crypto as collateral, tokenization efforts, and institutional trading initiatives are likely to proliferate. 3. A pro crypto dove at the helm of the Federal Reserve. Lower cost of capital, a governor more open to the idea of exploring a Strategic Bitcoin Reserve, in an environment where scarcity is poised to be a valuable utility. Overall, I find the near-to medium-term structural developments far more encouraging than the long-term risks alarming. With BTC trading at deep value relative to equities, and relatively close to strong support levels ($80k, $75k, $70k), I find the upside potential far more likely than a material 80% drawdown from ATHs, and opt for long and bold exposure.(Vetle Lunde)