Bitcoin: When Better Technology Isn’t Enough

Bitcoin’s confusing crash isn’t all that surprising

This isn’t investment advice. It’s a migraine.

Bitcoin is struggling— again.

Coindesk: Feb 9, 6pm ET¹

Last week was Bitcoin’s largest weekly decline in more than three years. Wipeout. Losing $15,000 in value over 24 hours and sliding 16% in just one week, Bitcoin bottomed to $63,000 last Thursday.² Half its value is gone from an all-time high of $126,273 just last October.³ Unlike previous winters—precipitated by some bankruptcy or scandal that panics a selloff—Bitcoin has slumped for four months straight into this week.

Struggling, suffering, crashing, sliding, and slumping— what’s going on?

My newsletter looks at how technology influences our life. Reviewing the recent Bitcoin chaos asks a question: what does this alternative currency promise versus what does it actually deliver? Bitcoin introduced innovative technology, but the currency it created fails to deliver the social value. The experiment isn’t over, but Bitcoin’s volatility and poor adoption suggests this noble idea of revolutionizing money has been stuck in financialized ruin.

The Promise of Bitcoin

Technology needs to improve our life. Bitcoin introduced technology that promises a better alternative to dollars: the world’s second language everywhere for commerce.⁴ In October 2008, Bitcoin’s founder Satoshi Nakamoto sent a nine-page academic paper without peer review in simple prose to a cryptography mailing list. The paper introduced a payment system for buyers and sellers to transact without a trusted third party.⁵ Electronic cash had existed beforehand, but the critical breakthrough introduces the underlying technology, a distributed ledger called a “blockchain”.⁶ It verifies each other’s transactions and incentivizes them by issuing a finite supply of coins.⁷

Bitcoin captures the imagination by promising better currency: reviving the benefits of the old gold standard to create an even better, new Bitcoin Standard.⁸ The distributed ledger removes the power for a central governing body, like a bank, to control the money supply.⁹ This prevents poor governance that could overheat economies with inflation and prevents censored capital controls (China bans crypto) as Bitcoin flows through the internet.¹⁰

Is Bitcoin Digital Gold? Not Right Now

So is it a better gold? Not right now, that’s for sure. The dollar has been suffering lately. The dollar’s exchange rate has hit a four-year low (measured against other currencies), pushing investor money away from U.S.-denominated assets.¹¹

Source: Washington Post¹²

The dollar is sliding. Gold is one asset that’s seen its value increase through the roof, up almost 80% over the past year to pass an all-time high of $5,000 an ounce. Investors are “selling America” to insulate themselves from how Trump’s chaotic governing style impacts the US economy: incursion into Venezuela, repetitive threats to tariff ally economies, his pressure on the Fed to lower interest rates, and also the ongoing threat of a government shutdown.¹³¹⁴¹⁵¹⁶

Source: Reuters, Jan 26¹⁷

“Debased” from the dollar, Bitcoin should be also be rising alongside previous medals if it were a safe store of value, immune to fiat uncertainties— but its price is falling.¹⁸¹⁹

So what explains the crash?

Sources: Bloomberg²⁰ WSJ²¹ NPR²², Deutsche Bank²³ Yahoo Finance²⁴ Parker White²⁵

Bulls versus Bears debate: is there fundamental value?

With every crash comes another debate between bulls and bears. On one hand, advocates spin Satoshi’s technical innovations to make the argument for Bitcoin having fundamental value, intrinsic worth that’s untethered to market pricing from the crash. On the other hand, skeptics say it’s just the latest instance of Bitcoin proving the technical innovations failed to live up to its social promise—the real value of the technology— and therefore proof that Bitcoin lacks fundamentals.

The bulls argue Bitcoin has fundamental value. They say Satoshi’s paper and the creation of exchanges mean Bitcoin delivered upon its technical promises; it’s only a matter of time before real people start using it. Look at Michael Saylor, Cathie Wood, Anthony Scaramucci, and Eric Trump doing the rounds in the media. They say regulatory tailwinds are here from a “bitcoin president”.²⁶ Selloffs get rid of speculators and irresponsible investors.²⁷ And volatility is just indicative of an early financial product gaining its footing.²⁸²⁹ Bulls call these crashes price floors to climb from.³⁰³¹ Stay long and “Hold on for Dear Life”— “HODL” as the typo goes.³²

Satoshi delivered the technology; so can Bitcoin change commerce…?

Source: Caleb & Brown³³

The bears say Bitcoin has no fundamental value. Cool technology aside, it fails socially. It’s vibes all the way down.³⁴³⁵ A litany of columns are out pointing to this crash as the latest case to cry out: it’s not a currency! Too volatile to store value. Not used enough (legally) to be a medium of exchange.³⁶

Paul Krugman points out there’s growing ways to speculate on it, undermining its stabler use-cases; less than 2% of Americans used any type of crypto for payment or money transfers in 2024.³⁷³⁸ Michael Burry wrote last week that the 200 companies in the Fortune 500 that adopted it can rotate away from it like any other U.S. asset; transaction times are longer and cost more than leaders like Mastercard and Visa.³⁹⁴⁰ Jemima Kelley emphasizes that despite having a “bitcoin president” set up a “strategic bitcoin reserve”, pardon crypto convicts, allow investing with 401(k) pensions, the Trump administration and family’s sprawling crypto empire hasn’t stopped these crashes⁴¹⁴²

Both camps make arguments that have rhymed for the past 17 years. They’ll fling different statistics at each other to argue who is using it, how often, and what for. Currency for exchange? Commodity for holding? Or just a casino chip to bet with? (Stablecoins deserve a separate post…)

The financial incentives of Bitcoin attracts speculation, derivatives, and get-rich-quick thinking; that has all overpowered the better incentives that would make using it stable for real transactions to help real people.

Bitcoin delivered on Satoshi’s technical promises—the distributed ledger works, the blockchain has never been hacked, users are still mining—but that doesn’t matter when it’s failed after distribution. Bitcoin fails to live up to its social promise to the world: replacing gold as a safe store of value and fiat currencies for trustier trade.

The technology delivered, but the promise hasn’t.

1. Bitcoin Price Today, BTC to USD Live Price, Marketcap and Chart,” CoinDesk, accessed February 9, 2026, https://www.coindesk.com/price/bitcoin

2. "Bitcoin Spirals Toward $60,000, Headed for Worst Drawdown Since FTX Crash," CoinDesk, February 5, 2026, https://www.coindesk.com/markets/2026/02/05/bitcoin-drops-below-usd65-000-heading-to-worst-one-day-drawdown-since-ftx-blowup

3. “A New Crypto Winter Is Here, and Even the Biggest Bulls Are Worried,” The Wall Street Journal, https://www.wsj.com/finance/currencies/a-new-crypto-winter-is-here-and-even-the-biggest-bulls-are-worried-82019de4

4. Charles P. Kindleberger, “The Politics of International Money and World Language,” Essays in International Finance, No. 61 (Princeton: International Finance Section, Department of Economics, Princeton University, August 1967). https://ies.princeton.edu/pdf/E61.pdf

5. Introduction, Satoshi Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System,” 2008, https://bitcoin.org/bitcoin.pdf

6. See Section II of the 3. white paper and: “After 10 Years, Bitcoin Changed Everything—and Nothing,” Wired, https://www.wired.com/story/after-10-years-bitcoin-changed-everything-nothing/

7. See Sections 4-6 Satoshi Nakamoto, "Bitcoin: A Peer-to-Peer Electronic Cash System," 2008, https://bitcoin.org/bitcoin.pdf

8. Saifedean Ammous, The Bitcoin Standard: The Decentralized Alternative to Central Banking (Wiley, 2018), https://www.amazon.com/Bitcoin-Standard-Decentralized-Alternative-Central/dp/1119473861 - Note: this is the Bullish Bible of Crypto enthusiasts. It acknowledges the long arc of volatility that will bend towards some stability eventually; it even concedes Bitcoin might not be the cryptocurrency that shakes out being the one to become the new digital Gold Standard.

9. “How Does Crypto Help Hedge Against Inflation?” Forbes, https://www.forbes.com/sites/digital-assets/article/how-does-crypto-help-hedge-against-inflation/

10. “Cryptocurrency Regulations: A Global Explainer,” ICIJ, https://www.icij.org/investigations/coin-laundry/cryptocurrency-regulations-global-explainer/

11. “US Dollar Decline: Impact on Consumers and Business,” CBS News, https://www.cbsnews.com/news/us-dollar-decline-impact-consumers-business-money/

12. David J. Lynch, “Trump’s Policies Impact U.S. Dollar Value,” The Washington Post, February 2, 2026, https://www.washingtonpost.com/business/2026/02/02/trump-economic-policies-dollar-decline/

13. Tyler Roush, “Trump Claims US Should Pay ‘World’s Lowest Interest Rates’ After Fed Paused Cuts,” Forbes, January 29, 2026, https://www.forbes.com/sites/tylerroush/2026/01/29/trump-claims-us-should-pay-worlds-lowest-interest-rates-after-fed-paused-cuts/

14. “US Dollar Decline: Impact on Consumers and Business,” CBS News, https://www.cbsnews.com/news/us-dollar-decline-impact-consumers-business-money/

15. “Carney, Trump, Trade Tariffs: Canada-US,” AP News, https://apnews.com/article/carney-trump-trade-tariffs-canada-us-5f7d187d6676414ba6a7f4ab9a3d119a

16. “House Narrowly Passes Bill to End Shutdown, but Divisive DHS Funding Fight Remains,” PBS NewsHour, https://www.pbs.org/newshour/show/house-narrowly-passes-bill-to-end-shutdown-but-divisive-dhs-funding-fight-remains

17. “Gold Races to $5,100 Record Peak on Safe-Haven Demand,” Reuters, January 26, 2026, https://www.reuters.com/business/finance/gold-races-5100-record-peak-safe-haven-demand-2026-01-26/

18. “This Isn’t De-Dollarization, It’s De-Fiatization,” Schiff Gold, https://www.schiffgold.com/guest-commentaries/this-isnt-de-dollarization-its-de-fiatization, “Dedollarization: It’s More De-Fiatization,” Mises Institute, https://mises.org/mises-wire/dedollarization-its-more-de-fiatization- There are suggestions in macro currency analysis that we’re not in a moment of de-dollarization, but de-fiatization; that’s outside the scope of today’s chat

19. The Lowdown on Debasement, Paul Krugman

20. “Bitcoin’s Break Below $80,000 Signals New Crisis of Confidence,” Bloomberg, February 1, 2026, https://www.bloomberg.com/news/articles/2026-02-01/bitcoin-s-break-below-80-000-signals-new-crisis-of-confidence

21. “Banks and Crypto Clash Over Tokens That Pay More Than Deposits,” The Wall Street Journal, https://www.wsj.com/finance/regulation/banks-and-crypto-clash-over-tokens-that-pay-more-than-deposits-c9159c0e

22. “Trump, Crypto, and Bitcoin Winter,” NPR, February 7, 2026, https://www.npr.org/2026/02/07/nx-s1-5704279/trump-crypto-bitcoin-winter

23. “Crypto Winter: Why Is Bitcoin Crashing Despite Trump’s Support?” Al Jazeera (citing Deutsche Bank), February 6, 2026, https://www.aljazeera.com/news/2026/2/6/crypto-winter-why-is-bitcoin-crashing-despite-trumps-support

24. “What Caused the Massive Bitcoin Crash? Clues,” Yahoo Finance, https://finance.yahoo.com/news/caused-massive-bitcoin-crash-clues-224125613.html

25. X Tweet - avoiding embed.

26. Michael Saylor interview on Bitcoin selloff (YouTube video, begins ~6 minutes in). Text reference only to avoid embed.

27. Cathie Wood interview on crypto market outlook (YouTube video). Text reference only to avoid embed

28. Anthony Scaramucci interview on Bitcoin volatility (YouTube video, begins at 2:37). Text reference only to avoid embed.

29. Eric Trump interview on crypto and the Trump administration (YouTube video). Text reference only to avoid embed.

30. “Saylor-Led Strategy’s Quarterly Losses Widen as Bitcoin Faces Another Reckoning,” Reuters, February 5, 2026, https://www.reuters.com/business/saylor-led-strategys-quarterly-losses-widen-bitcoin-faces-another-reckoning-2026-02-05/

31. “Strategy Earnings Q4: Bitcoin Price, MSTR Plunge, Michael Saylor,” Investor’s Business Daily, https://www.investors.com/news/strategy-earnings-q4-bitcoin-price-mstr-plunge-michael-saylor/

32. “The History of HODL,” CoinDesk, https://www.coindesk.com/markets/2019/02/02/the-history-of-hodl

33. "Bitcoin's Market Cycle," Caleb & Brown, https://calebandbrown.com/blog/bitcoins-market-cycle/

34. Paul Krugman, My Head Talking to Hasan Minhaj

35. “The Brutal Truth About Bitcoin,” Brookings Institution, https://www.brookings.edu/articles/the-brutal-truth-about-bitcoin/

36. “Bitcoin Bulls Spot Bottoming Signs as Longtime Bears Take Victory Laps,” CoinDesk, February 8, 2026, https://www.coindesk.com/markets/2026/02/08/bitcoin-bulls-spot-bottoming-signs-as-longtime-bears-take-victory-laps

37. Paul Krugman, Substack post on Bitcoin speculation, https://substack.com/home/post/p-186962423

38. “U.S. Consumers’ Use of Cryptocurrency for Payments,” Federal Reserve Bank of Kansas City, https://www.kansascityfed.org/research/payments-system-research-briefings/us-consumers-use-of-cryptocurrency-for-payments

39. “’Big Short’ Michael Burry Warns on Bitcoin,” Yahoo Finance, https://finance.yahoo.com/news/big-short-michael-burry-warns-164717085.html

40. Reach out if you’re curious about the citation here. Look at entity-adjusted volumes to help understand a better metric for comparing the use of Bitcoin versus Visa and Mastercard for transactions, let alone what they’re buying. “Q4 2025 Institutional Market Perspectives,” Glassnode Insights, https://insights.glassnode.com/q4-2025-institutional-market-perspectives/

41. Jemima Kelly, column on Bitcoin’s failure despite Trump administration support, Financial Times, https://www.ft.com/content/2b030926-2012-4446-b22d-e549e10e7086

42. “New Report Exposes the Trump Family’s Multi-Billion Dollar Crypto Empire,” House Judiciary Committee Democrats, https://democrats-judiciary.house.gov/media-center/press-releases/new-report-exposes-the-trump-family-s-multi-billion-dollar-crypto-empire-fueled-by-self-dealing-and-corrupt-foreign-interests