Is Bitcoin Too Big to Fail? The Impact of Strategic Reserves on Bear Markets

Just thinking out loud here. Could the trend of companies and public institutions, like governments and central banks, building up Bitcoin "strategic reserves" actually change the mood in the next bear market? I mean, not just because there’s more liquidity or demand, but really shifting the overall sentiment or how people view Bitcoin. In past bear markets, we’ve seen tons of voices from journalists, social media influencers, and others claiming that Bitcoin’s done for and about to collapse, often calling it a bubble. But this time feels different. With more corporations and even some governments getting into Bitcoin, we might be hitting a point where not just the hardcore Bitcoin fans, but regular folks too might stop believing those doomsday predictions. If your government holds Bitcoin as a strategic reserve, is it really likely to just "die"? A case in point is the European Central Bank pair, Bindseil and Schaaf. Back in 2022, right after the FTX mess, they wrote an article saying that even at $20,000, it was a great time to sell since Bitcoin was just about to hit the ground. Fast forward to 2024/25, and they had a different take, warning about the risks of Bitcoin becoming too successful! Honestly, I'm still a bit doubtful about governments holding huge Bitcoin reserves, but maybe this shift in narrative could really help change the whole "Bitcoin is dead?" vibe in the next bear market. Who knows?

In order not to die the use cases have to grow. Once it becomes like 2nd nature that you could pay with crypto it won't die. In theory some people planning to make BTC2 might make big and we have 2 strongly valued coins.

Yeah every year we will see a journalism said Bitcoin will die because Bitcoin during bear season the drop is too big compared to other assets, this is the part how the journalism can use to say Bitcoin will die. We haven't heard the bankruptcy of ETF companies or criminal drained cold storage that belong to ETF companies right? We will see the narrative of Bitcoin will die, but in the reality Bitcoin is too big to die.

We've not had a crazy dip in recent and that is the only reason why you haven't heard those tales of how bitcoin is dead. Even though governments of different countries are whispering about bitcoin reserves, there are still doubters who are waiting to say, "I told you so" Even within the crypto industry, there are altcoin and memecoin enthusiasts who are waiting to say a certain altcoin is or are the future. Bitcoin is above $100k, since it has been dipping, so they will look foolish if they start talking now, but if bitcoin falls to $50k or $6ok, then you will see things like that everywhere. I don't think the fact that big corporations and governments are all thinking about adopting Bitcoin doesn't makes it "too big to fail" in the eyes of haters. After all, these guys are just looking to make a profit; they're not believers, they go wherever the profit goes. If an altcoin starts pointing up to $50k now, it will be the next best thing to these guys.

FUDs don't really care about strength they focus on suppose weaknesses Even with that there would still be FUDs but their effect would be limited than few years ago. Imo there are different type of death. One I think is associated with the government route is people using Bitcoin via third party And yes it would make it more stable and pointed upwards like the inverse of Fiat.

I agree that massive use "as a currency" would be an enormous step in the "solidification" of Bitcoin, once that happens it will be difficult to kill it and it would probably not fall more than 20-30% even in the deepest bear markets (like fiat currencies). However, we're still not there, so I was referring to a more short term effect for the next bear market. And even if I'm partly critical of the strategic reserves, they could have a volatility-reducing effect that could pave the way for an increased use as payment tool. This is indeed a problem that could in theory arise in the next bear market and would of course probably lead into panic just like in 2022, or even worse, and it would of course trigger "obituaries" again ("Hey, we said that these companies were a scam!"). However, I think the likelihood is quite low, I expect none of the ETF companies to be managed as dilettantic as FTX and Terra/Luna was. Treasury companies could be a bit more tricky, as their business model is more risky, but I expect them more to run into problems when volatility gets so low that their business model isn't attractive anymore for investors looking just for volatility, and that may be far ahead (not in the next bear probably). Do you mean the death of Bitcoin's decentralization if it becomes further co-opted by governments and corporations? That would indeed be a completely different story, it could even be positive for the price evolution, but finally it could lead into a devastating crash when Bitcoin has lost all its USPs.

It is too big to die. I even believe that we also gonna get diminished pullback at around peak bearish knowing the FDV has reached this big and the participation of institutional investors + strategic reserve just put a lot more trust toward bitcoin for the casual people not only to bitcoin maxi. Not to mention the strategic reserve, pension fund access toward crypto, adoption in developed asian nations + rich middle east countries, as well as the ETF is just the start. I don't believe it can just suddenly die anymore like those fudders keep saying. Even the fudders around the world are starting to doubt the stance about calling bitcoin a bubble. What it needs is adoption for alternative currency across nations then bitcoin will exist forever.

Just as the sun rises every day and it is certainly credible, so too is the future of Bitcoin certainly credible and bright. I believe Bitcoin will be more long-term, it is only at the beginning of the day that the end may take several decades. Because I believe Bitcoin will be very long-lived because and Bitcoin is a suitable tool for competing with all types of assets. Since Bitcoin was created, the use of fiat currency has been decreasing, and gold reserves have been decreasing. You will notice that fiat currency and gold require different securities to carry, Bitcoin holdings only require privacy. That is why I can say that Bitcoin is ready to fight against everything alone, various countries have adopted Bitcoin as a strategic reserve and more unique countries are preparing to accept it.

Yeah, the whales already control a lot of supply in the market, so they won't let it die unless they can pivot away to another asset asap. At the end of the day, retail will be the one who gets burned if they simply view Bitcoin or anything as a godlike asset that won't be affected by many things. I'm still not sure if we'll see an increase in Bitcoin usage as a currency tbh, as more institutions seem to position Bitcoin as an asset similar to gold. Retail investors also do the same thing.

as institutional adoption continues to increase and more countries tend to consider the usgae of bitcoin as her reserve, the narrative will certainly change not just for bitcoin enthusaist but for anyone that follows the trend of bitcoin enough to know that bitcoin can not just die like that. maybe if it was in an era where the notion was that bitcoin is just an household name for just bitcoin enthusiast alone, then it would have been a different case but as more people continues adopting bitcoin and whales and institution buys in on it, it becomes safe to say that bitcoin is technically too big to die. one good thing about bitcoin is that, it can not just dump overnight without clear cut signal from adoptors in terms of obvious decision that will give an indication that theres likely going to be a reaction in the coming days. but even with that, it can only get bear for a while and likely get bullish again because bitcoin adoption cuts accross whales, private institution and now it usage as reserve which makes it even harder for a potential death or complete dump. the narrative about bitcoin dieing is just one that is caried by skeptics and anti bitcoinner who are just wishing fr what is gradually becoming an impossible situation.

I would have love to agree with you on your statement that it's too big to die But the basis of it being Big isn't on a trustworthy ground, The government. They say things, switch sides as long as it benefits them likewise some of these institutions. No ETF has really gotten a bankruptcy that affected investors funds because of the way it's structured and regulated(stricter than cryptocurrency). The biggest variable Now is that a CEX is used as a custodial, imagine if FTX happens here Well that would be catastrophic

The one vote on "No, this time it's different" is mine, because, yeah, this time is indeed different. Even Bitcoin-critical journalists won't once again write a "The Bubble has Burst" article because they already made a similar headline in the past. And they're probably cognizant of the fact that their failed analyses and predictions have already subjected them to ridicule. The Bitcoin community has already laughed at them. Imagine writing an obituary after Bitcoin plunged from $65,000 all the way to $15,000 only to write a similar obituary a couple of years later when Bitcoin dived from $124,000 to $100,000. Doesn't that make them look like a fool? Also, yeah, I'd say a Bitcoin "strategic reserve" or "corporate treasury" trend makes people more confident than ever, like, "come on, the asset that BlackRock, Franklin Templeton, Fidelity, and others are bullish about is going to die? You gotta be kidding me!" The rising asset that no less than the US' Donald Trump is acquiring is going to crumble? You aren't serious! This is probably the prevailing thought right now. It will only be different if these huge names backing Bitcoin themselves are the ones dumping.

There is nothing that's too big to die, if not there won't be many big companies and businesses going to zero in the past, Bitcoin on the other hand is different from them though because of the way it was built. I don't even know that the world will now embrace Bitcoin like this because the utility isn't for everyone but today I am wrong because it was never created for that purpose only, it's a good inflation fighter and also a good store of value. The only problem that i am seeing affecting Bitcoin sooner is the massive involvement of the government, I don't like that Blackrock and others are massively buying, stupid me thought that decentralisation can push them back, but they are here for the money too and they don't care about the decentralised part of Bitcoin.

Yes, well, there are many things I don't like about governments, such as printing fiat currency left, right, and center, but I accept it and try to act accordingly. I think so. Normally, without governments getting involved in long-term games, volatility would decrease. With the entry of major players, not just governments, who buy to HODL, not to trade, volatility will normally decrease, and anyone who insists that Bitcoin is a Ponzi scheme and will go to zero is simply being ridiculous. The fiat system is indeed a Ponzi scheme, and it is the one that governs our lives.

The news predicting Bitcoin's impending death will not end so soon because some of the major sceptics have not changed their stance. Gary Gensler, Peter Schiff, Warren Buffett and others still believe that Bitcoin will die. The press will always publicize statements by these haters to promote FUD. Deutsche Bank claimed that Bitcoin volatility will continue to drop due to mainstream acceptance growth and adoption by corporate organizations and the government. Based on research findings, the bank feels that the Bitcoin market is maturing.

Bitcoin cannot be stable, it's a volatile digital currency and this one has been settled, bitcoin also cannot cease to be, because it has been created to stay, every other things happening will either help increase it market value and acceptability or leave it as it has been, but has no negative implications on its future growth, one of the reasons it will always remained a gold competitor is the way of it's increasing adoption with value over time, all these make it more profitable.

Lot of times we read this thing like there are some people pop out saying Bitcoin is dead. There's article record how many times Bitcoin declared dead https://99bitcoins.com/bitcoin-obituaries/ But so far none of it actually hit the right thing since Bitcoin manage to survive for many years of its existence. I guess people saying that is crazy then get panic when they see a corrections happen. That's why they say or released a opinion like this because this is what they thought going to happen on Bitcoin before.

I have always been a strong advocate of more use case of Bitcoin which will continue to guarantee that Bitcoin achieve the purpose for its creation. When we have more innovations that encourages people to use Bitcoin in their daily lives, then it will continue to get better for Bitcoin and for all of us that are early in the culture. The good thing is that the high transaction fees, that have been sited by many as bottleneck, has reduced drastically and with the growing popularity of Lightning Network, it will even be lower although and the entire thing is a work in progress. Nevertheless. I believe that Bitcoin is too big to die, if it didn't die when the critics were active and vocal and many governments were against it, it won't die now that many are embracing it.

This kind of adoption from public institutions and institutional investors is definitely going to boost confidence amongst investors, particularly those who are weaker hands; those who seriously panic in a bear market. It is easy to understand why the public sentiment will change, many of them do not truly understand bitcoin, nor its values, they would rather want to erroneously associate its value as being backed by trust from big public institutions, rather than its use cases. Some part of the media is also controlled by these public institutions, so it is only normal that their publications about bitcoin would slightly change, and even those who are still very critical would likely be ignored.

My opinion is that there will always be those who will take every opportunity to write something bad about Bitcoin, whether it's people who attack all new technology or those who are paid to attack BTC. The former are useless rats anyway who believe that the earth is flat and that dinosaurs live on some tropical island somewhere - while the latter are much more dangerous because they have much greater resources to spread their articles wherever they want. In addition, I think that these big players who talk positively about Bitcoin today are playing a double game, on the one hand they are trying to use the opportunity to earn a lot of money, and on the other hand they are trying to kill the idea that Bitcoin is a currency because it does not suit them at all. Accordingly, I don't think volatility will disappear because it is the main factor in the game - it brings profit and at the same time sends the message that Bitcoin is not suitable as a currency.