Bitcoin’s recent 50% decline sparks debate on its stability, but hedge fund veteran Gary Bode attributes the selloff to inherent volatility rather than a crisis. He notes 80-90% drawdowns are common in bitcoin history, emphasizing long-term returns for those who tolerate temporary fluctuations.

Market turbulence linked to the nomination of Kevin Warsh as Federal Reserve chair caused bitcoin price drops. Bode disputes the market’s interpretation, pointing to Warsh’s support for lower rates and Trump’s notes on lower fed funds rates. He argues that market perception, not fundamentals, drove recent selling.

Bode dismisses theories about early bitcoin holders offloading holdings as profit-taking, not long-term weakness indicators. He highlights Strategy ($MSTR) as a source of short-term pressure, noting potential price dips if Saylor sells holdings. Bode stresses that bitcoin will survive such events.

The rise of “paper” bitcoin, including ETFs and derivatives, increases trading supply but does not alter bitcoin’s hard cap of 21 million coins. Bode sees it as a positive for long-term value. He also addresses concerns about energy prices impacting mining, calling the theory overblown.

Bode refutes critiques that bitcoin is not a “store of value,” highlighting its permissionless nature and lack of reliance on a counterparty. He sees volatility as inherent to bitcoin and advises investors to view price swings as a normal part of the game, not a sign of systemic risk.

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