The 2026 Bitcoin Crash - In Perspective

If you've been watching Bitcoin's price action lately, you'll have noticed that things aren’t going quite as well as many influencers had predicted. Many were convinced that with the arrival of big institutions, and growing interest from nation states, that any selling would come to a “screeching halt” and the price of Bitcoin would “go vertical”.

Unfortunately, almost a year later, these wild predictions lay in tatters.

After hitting an all-time high of $126k in January, Bitcoin retreated all the way back down to $60k, a significant ~52% drop in purchasing power. Of all the price predictions made at the start of 2025, you’d be hard pushed to find one that predicted we would be back under $70k by February 2026.

For the uninitiated, this can feel pretty uncomfortable. When the whole world has tried to convince you that Bitcoin is ‘up only’, it can feel like a real stomach punch when the prophesied ‘God candles’ turn out to be red instead of green.

A lot of this disappointment can be avoided by ignoring those who constantly make price predictions. Most influencers are forced to speculate on price simply because it’s the easiest way to farm your attention. When the market is buoyant, they monetise greed and FOMO, and when the market is dumping, they profit from fear and panic. They aren’t in the business of predicting where the Bitcoin price is going, they’re in the business of reacting to it and amplifying the sentiment for clicks. It’s a simple but effective business model.

Your Bitcoin journey will be a lot less stressful if you can avoid getting caught up in their never-ending cycle of short-term thinking.

This week, let’s take a moment to steady ourselves by zooming out and putting things into perspective. A 50% drop in Bitcoin’s price is not unique, and doesn’t change Bitcoin’s fundamental value proposition. This is no time to panic; it’s just business as usual.

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What's Driving the Recent Price Action?

Before we provide some historical context for the recent dip, it's worth trying to understand what's driving the recent volatility, because despite what the mainstream media will likely claim in the coming weeks, it isn’t because Bitcoin has “failed”.

What we're really seeing is a confluence of major macro-economic factors that are causing pandemonium across all financial markets. Geopolitical tensions, trade policy uncertainty, and concerns about global liquidity aren’t creating chaos just for Bitcoin, they’re even making precious metals trade like memecoins.

And after recently firing 16,000 employees, even Amazon had a rough week:

You’re seeing volatility everywhere, because chaos is everywhere. People no longer trust their governments, financial institutions, or local currencies, and most are being buried by a rapidly increasing cost of living. In scenes eerily similar to Weimar Germany, people’s last hope has been to try and speculate their way out of trouble.

Unfortunately, amidst the panic, not everyone will behave rationally. The people you’re seeing queuing down the street to buy physical gold for the first time are not executing a well thought out thesis with a long-term plan. They’re acting on fear, FOMO, and impulse, trying to improve their financial situation overnight, rather than carefully building their wealth over time.

For experienced hedge funds, banks, and traders, these people’s savings become easy pickings.

The markets are spooked, and Bitcoin is no exception. New institutional money might have flowed into the space this year, but for once, it wasn’t the ‘smart money’, and it didn’t arrive first.  

Via treasury company stocks and ETFs, a new and apparently ‘sophisticated’ type of investor was able to get ‘exposure’ to Bitcoin this year. Unfortunately, it seems likely that many didn’t properly understand what they were buying. After all, if you understood that a big part of Bitcoin’s value proposition is being able to hold it yourself with zero counterparty risk, you’d want to own the real thing rather than just a paper IOU.

Many claimed the arrival of institutions would put an end to deep corrections in Bitcoin’s price because these ‘sophisticated’ investors have a better understanding of value and operate on longer time horizons than ‘retail investors’.

But what these patronising takes always failed to consider, is that early Bitcoin adopters are not typical ‘retail investors’, they’re people who have developed a deep understanding of a paradigm shifting technology. Their conviction will always be stronger than that of a financier who hasn’t put the work in and still can’t see beyond the headline price.

How many of these ‘sophisticated’ investors do you think could explain the difficulty adjustment?

The point is, if you don’t fully understand something, then you’re unlikely to develop serious conviction in it, which explains why we witnessed over $6bn in net outflows from ETFs between Nov 2025 and Feb 2026 alone. Institutional money is getting spooked across multiple markets, and when they find themselves caught offside, their lack of conviction in Bitcoin is revealed.

Overall, a volatile combination of geopolitical uncertainty, paper-handed institutional money, and plebs getting greedy with Bitcoin backed loans and speculative bets on treasury stocks, created the perfect storm. A shakeout was perhaps long overdue.

The beatings will continue until people learn to stay humble, stack sats, and take self-custody.

In hindsight, it seems obvious that an exuberant ‘Paper Bitcoin Summer’ might conclude this way. Maximum fear usually arrives shortly after maximum greed. Perhaps ‘market cycles’ won’t come to an end until people realize they shouldn’t speculate on Bitcoin to chase more dollars, they should just upgrade to it instead.

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Putting This Market Crash in Perspective

Having some sense of the factors that contributed to this market pull-back means we can now start putting it into context. Yes, a 50% pullback is significant, but does that mean Bitcoin is in trouble? Is it about to die? Should we all start panicking?

Of course not…

None of Bitcoin's fundamental properties have changed. The network is still secure, it still processes uncensorable transactions, and the supply is still capped at 21 million. It’s also still trading 54% higher than it was just two years ago despite the recent dip in price.

The phrase ‘Bitcoin doesn’t care’ has never been more apt. It doesn’t care who buys it, who sells it, who loses it, or who gambles with it. It just keeps on working as advertised. The only volatile thing about Bitcoin is its price in dollars, and that’s simply a reflection of human behaviour.

The chart is erratic and unpredictable, because humans are erratic and unpredictable.

Bitcoin has increased more than 19,000% over the last decade, but it didn’t go up in a straight line. Its meteoric rise is littered with devastating drawdowns and liquidation events that have cost many hodlers to prematurely lose their stack along the way.

Let’s put this 40% dip into context by looking at some of Bitcoin’s previous antics:

• In 2011, Bitcoin rallied from under $1 to $31, then crashed 93% to around $2. If you'd bought at the top, you'd have been down 93% at the bottom. It looked a lot like this silly niche experiment had failed.
  
  
• In 2013, Bitcoin rallied to over $1,000, then spent the next year crashing down to around $200. That's an 80% decline. If you'd bought near the top of that cycle, again you'd have been nursing some serious paper losses. Bitcoin was declared dead once again.
  
  
• In 2017, we saw perhaps Bitcoin's most famous bull run. It was certainly the one that brought Bitcoin to everyone’s attention. The price ripped from under $1k at the start of the year, to nearly $20k by December. Then it crashed. Hard. By December 2018, Bitcoin had fallen to around $3,200. If you'd bought anywhere near the 2017 peak, you were down approximately 84% by the bottom.
  
  
• In 2021, Bitcoin hit another new all-time high of $68,789. But that wasn't the end of the volatility. By 2022, we were in the depths of crypto winter, with Bitcoin trading below $16k. If you'd bought at the 2021 top, you were down over 75%.

Are you starting to see the pattern? Bitcoin just keeps on crashing, over and over again. It’s such a common occurrence that people were already making funny videos about the phenomenon way back in 2016. And it turns out Alex was right; Bitcoin did crash again.

Give it a watch by clicking below:

With a little perspective you begin to see that a 50% Bitcoin dip is nothing new. Bitcoin is emergent money that most of the world is still trying to get their head around and it will continue to rally and correct sharply while everyone tries to make sense of it.

What’s important to remember is that each time Bitcoin has crashed, it has formed a higher low. Don’t let volatility driven by human emotion and ill-informed market participants shake you out. The trend is your friend; you should probably stick around to see Bitcoin crash to $500k.

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Stay Calm & Stack Sats

There’s no escaping that if you were buying Bitcoin at $126k, then watching it fall back to $76k is not exactly a fun experience.

Like most people, you probably equate your Bitcoin stack to your plans for your future and your family’s financial security. Which means even if you’re hodling for the long-term, sharp drops can feel quite disconcerting. It’s natural to have an emotional response.

It’s times like these when it pays to go back to first principles and recognise that nothing has fundamentally changed. Fiat currencies are still steadily being debased to zero, governments are still drowning in insurmountable debt, and Bitcoin remains the best way for you to safeguard your wealth from a financial system that has become completely dysfunctional.

You can choose Bitcoin as your monetary network of choice, or surrender yourself to a rigged financial system controlled by people who were friends with Jeffrey Epstein.

It’s also important to recognize that Bitcoin is extremely volatile because it’s still an emergent technology. A monetary network that’s 17 years old is still in its infancy, expecting it to become the new world reserve currency overnight is wishful thinking even for a maximalist.

In the hype of a bull market it’s easy to get lured in by influencers promising that “this time is different” and that we are on the cusp of a “supercycle”. Just remember, these people are trying to sell you things like leveraged Bitcoin backed loans, yield products, and hosted mining solutions.

Being transparent about the very real risks would hurt their conversion rate…

Finally, always remember to zoom out. Just 6 months ago when Bitcoin was trading at $120,000 you would have jumped at the chance to pick up some more at ~$70,000. Unless you’ve already decided you have enough Bitcoin and have no interest in growing your stack further, then this price drop should be seen as a golden opportunity.

He might not know a lot about Bitcoin, but there’s real wisdom in Warren Buffet’s advice to ‘buy when others are fearful’. If you know that Bitcoin’s value proposition hasn’t changed, then you know the fear is misplaced. If you know the fear is misplaced, then you know that Bitcoin is mispriced.

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Play the Long Game – The Bitcoin Way

The people who succeed in Bitcoin are the ones who can understand the asymmetric upside, hold their Bitcoin without introducing unnecessary leverage, and keep it secure in full-self custody.

There are no shortcuts, no get rich quick schemes, and you cannot afford to outsource ownership to a custodian. Taking responsibility and being patient might be difficult, but it’s preferable to trying to accelerate things and blowing up your entire stack.

And hodling doesn’t mean you have to sit and be idle. Once you’ve mastered the art of securing your wealth in full self-custody, you can keep going further. You can turn your attention to mastering other skills like improving your cybersecurity and privacy, and with borderless money, you can even start exploring second residency and citizenship.

There is a very simple blueprint to using Bitcoin to upgrade your life and set yourself free, and our experts are on hand to show you how it’s done. When you’re ready to leave the casino and build your future on firmer foundations, just book a free 30-minute call and we’ll show you the way.