Right again: Bitcoin the victory lap edition

With Bitcoin at $65,000 this morning–a decline of 50% from the highs just 4 months ago–as never tire of saying–I was right again. Analysts have drawn comparison to 2022, when Bitcoin fell 75%, but this is a worse situation, as I cover in my post “The Real reasons Bitcoin is Falling so much”, published on October 17th, 2025, when Bitcoin was still above $100k.

First: No support from Trump, as I predicted.

Second: Enormous macro sensitivity to downside on geopolitical news (e.g. Iran, Israel), economy (inflation, tariffs, interest rates), stock market (bear market or correction, as seen now with the nasdaq down 5% in a week, which I hedged by shorting Bitcoin).

Third: Congressional hurdles to passing a Bitcoin reserve.

Fourth: Crypto is unable to participate in the ‘AI boom’.

Fifth: Negative beta/skew to the downside. When the Nasdaq falls even a tiny bit, Bitcoin will drop much more. Even in 2022, the skew was not as bad as it is now. This is why shorting Bitcoin was such a great hedge, as said in September when it was above $115k.

In summary: the risk vs. reward reward metrics are terrible, and hence I am still short Bitcoin.

Of course, a lot of people predicted Bitcoin would crash, but I was the only one to predict all three: Bitcoin crashing, tech stocks surging and outperforming Bitcoin, and no AI bubble. Getting all three right especially is indicative of skill. Most people assumed crypto would crash alongside AI and tech stocks. But the Nasdaq/QQQ is only down 5% from its highs vs. Bitcoin being down 51%… to say I was right is an understatement–I crushed it. And to add to this: Trump innaction, and no Bitcoin reserve. Trump has abandoned all support for bitcoin. Never even mentions it. He’s over Bitcoin like a bad ex. So that is 2 more correct predictions.

Even the the mainstream media has noticed the innaction. From Fast Company, “Where is Donald Trump’s strategic Bitcoin reserve?”

The government seems to be amassing more Bitcoin. But little work seems to be happening to enact the terms of the executive order Trump signed to start the ‘strategic reserve.’

As I said in the above link, even if Trump wanted to create a Bitcoin reserve, it would not meet the congressional hurdles. The stockpile, which is not a reserve, will likely be voided should Trump’s successor lose. This would mean 200,000-300,000 additional Bitcoin entering the market, depressing the price even more.

I was correct in saying there would be no Bitcoin reserve, which was the main reason it has gone up so much in 2024. But instead, nothing, just like I predicted in my prescient Almonds post, written when Bitcoin Was trading at $102k. The first nail in the coffin, when Bitcoin was trading at $118k, was Treasury Secretary Scott Bessent in August refuting the possibility of taxpayer-funded Bitcoin purchases.

This came up again recently in a heated congressional exchange, in which Bessant again didn’t budge, saying he “didn’t have the authority to do so,” which is correct. A bailout, which by definition is taxpayer funded, would require congressional approval. And Trump is smart enough to know that a Bitcoin bailout would be extremely unpopular with voters and fodder for the media as a ‘bailout for gamblers and a tiny crypto donor elite,’ as I said in the Almonds post.

The fact interest groups and individuals who donated the most to Trump’s 2024 campaign, such as crypto donors, have basically been rebuked or shunned–while AI, metals, semiconductors, and woke ‘big tech’ get the red carpet treatment and taxpayer-funded initiatives–should call into doubt or at least renew debate into ‘theories of power and influence’. Even Yarvin noticed, as well as commenters. Here was the exchange:

Others noticed in the comments:

This Is exactly what I was saying when Bitcoin was >$110k, when I was shorting. Now is the payoff from being right by having the correct ‘theory of society’. The main selling point of Trump is that Left are worse, not that he’s a person of upstanding moral character character or anything like that. Those who hoped Trump would bailout their ‘crypto bags’ were predictably left disappointed. That is on you.

Trump already cashed out on his ‘meme coins’ and pocketed the donor money. And being a lame duck, what does he need the crypto community for anymore? His sons are set for life too, even if Bitcoin was to go to zero. And crypto donors are a tiny minority. The public sees crypto as a distraction, a scam, or for gamblers, and Trump knows this, as mentioned above, hence inaction. Compared to AI or tech, crypto plays no major role in society, nor does the public use crypto much, compared to the huge popularity of ChatGPT and related programs, as every teacher now has to contend with. Intel is a name endeared to the public with its iconic “Intel Inside” marketing campaign, even if the company is a shadow of its former self, hence there was no pushback to Trump bailing it out.

AI is reshaping society. It’s threatening to upend the edifices of higher education, and reshape the labor market in ways never before imagined. Or even bring about a post-labor society altogether (I don’t think this will happen though). But crypto? A distraction. A fad. With Bitcoin down $20k in a month and with no end to the selling, reality has sunk in: There will be no Bitcoin ‘bailout’, support from Trump, or even any reassuring words. Just total silence.

I remember sharing my Almonds post on themotte.org, an offshoot forum of exiled Reddit users, and got tons of criticism. This was when Bitcoin was trading at $114k in October 2025. But when it comes to finance I am almost always right, so I will always defer to myself on such matters unless I can find someone who is better, which so far no one has met that bar. I am just talking about this specific niche: the intersection of macro forecasting and finance. Scott is a much better writer, but his post was wrong, and that’s fine and does not detract from the enjoyability of his posts.