Renowned analyst Charles Edwards has presented a stark assessment of Bitcoin's sharp decline, arguing that the primary drivers are not just macroeconomic pressures but two fundamental structural issues within the cryptocurrency itself. Edwards contends that Bitcoin is perceived as "the most vulnerable asset to quantum attacks in the world," a long-term security risk that has caused its price correlation with traditional assets like stocks and gold to break down by 2025. This divergence, he states, has led investors to price in these security concerns, increasing selling pressure.
The second critical issue highlighted is the fragility of the "Treasury Company" model. Edwards notes that hundreds of companies adding Bitcoin to their balance sheets—acting like indirect Bitcoin ETFs—have grown through leverage incentives. With nearly 200 treasury companies employing similar strategies, systemic fragility has increased. This, combined with heavy selling from long-term investors and a "wave of exodus" among miners throughout 2025, has triggered a chain reaction of value loss. Many Digital Asset Treasury (DAT) structures have reportedly fallen below their cost basis.
Edwards warns that without confronting these two core problems, the sector will struggle to recover, and volatility and painful price movements could continue in the short term. He suggests a strong repricing is possible only with concrete progress on these fronts.
This analysis aligns with a broader market crisis of confidence. Bitcoin recently fell below $76,000, marking an approximately 40% drop from its 2025 peak and its fourth consecutive monthly decline—the longest losing streak since the 2018 post-ICO crash. Market maker Wincent director Paul Howard commented, "I don't think we'll see a new all-time high for Bitcoin in 2026."
The sell-off is characterized by a lack of buyers and diminishing confidence, rather than panic-induced liquidations. Despite positive developments like pro-crypto regulations from the Trump administration, optimism has waned, with social media bullishness notably limited. Furthermore, outflows from spot Bitcoin ETFs and a slowdown in purchases from large institutional players and digital asset treasuries are weakening high-end demand.
Market liquidity is a severe concern. Data from Kaiko shows Bitcoin's market depth—its ability to absorb large transactions—has fallen by more than 30% since its October peak, reaching levels last seen after the FTX collapse in 2022. Kaiko analyst Laurens Fraussen estimates the market may only be about 25% through the current cycle, with volumes likely to remain weak for the next six to nine months.
Adding to the pessimistic outlook, Richard Hodges, founder of the Ferro BTC Volatility Fund, told Bitcoin whales they may need extreme patience, stating, "they won't see a new all-time high for 1,000 days." He attributes this to intense competition for capital, with investor attention diverted to soaring AI-related stocks and precious metals like gold and silver, leaving Bitcoin as a "story from three years ago."
