The Biggest Misjudgment of 2025: Bitcoin Peaked in Q4, and 'HODLing' No Longer Works

marsbitPublished on 2026-01-12Last updated on 2026-01-12

Abstract

In his 2025 review, the author admits a major misjudgment: Bitcoin likely peaked in Q4, defying his prediction and confirming the persistent four-year cycle. He reflects on other forecasts: retail investors largely avoided crypto for assets like gold and AI stocks, memecoin and AI agent supercycles failed to materialize, and NFTs are declared dead. Key insights include: 1. Spot ETFs acted as a market floor, not a ceiling, absorbing massive sell-offs from long-term holders. Bitcoin’s correlation with traditional risk assets dropped, potentially bullish long-term. 2. Airdrops thrived with $4.5B distributed, but success now requires focused, high-conviction plays due to sybil detection and valuation pressures. 3. Protocol fee switches set a price floor via buybacks but don’t guarantee sustained price appreciation, as seen with UNI’s volatility. 4. Stablecoins gained mainstream traction for payments, but trading the narrative (e.g., Circle’s IPO) proved difficult. The real opportunity lies in bypassing traditional payment rails. 5. DeFi is more centralized than CeFi, with dominant players like Aave and Chainlink. Conflicts between equity and token holders highlight governance challenges. The overarching theme: Everything is a trade. The HODL culture is dead, replaced by short exit windows and a lack of long-term conviction.

A year ago, I wrote "Truth and Lies in the 2025 Crypto Market".

Back then, everyone was sharing higher Bitcoin price targets. I wanted to find a different framework to discover where the masses might be wrong and position myself differently. The goal was simple: find ideas that already existed but were ignored, disliked, or misunderstood.

Before sharing the 2026 edition, here is a clear review of what truly mattered in 2025. What we got right, what we got wrong, and what we should learn from it. If you don't examine your own thinking, you're not investing; you're guessing.

Quick Summary

"BTC Peaking in Q4": Most people expected it, but it seemed too good to be true. Turns out they were right, and I was wrong (and paid the price). Unless BTC skyrockets from here and breaks the 4-year cycle pattern, I'll concede this one. "Retail Prefers Memecoins": The fact is

retail doesn't prefer cryptocurrency at all. They bought gold, silver, AI stocks, and anything that wasn't crypto. The supercycle for memecoins or AI Agents also did not materialize.

"AI x Crypto Remains Strong": Mixed bag. Projects continued to deliver, the x402 standard evolved, and funding continued. But tokens failed to sustain any rallies.

"NFTs Are Dead": Yes.

These are easy to review. The real insights lie in the following five larger themes.

1. Spot ETFs Are the Floor, Not the Ceiling

Since March 2024, long-term Bitcoin holders (OGs) have sold approximately 1.4 million BTC, worth about $121.17 billion.

Imagine the bloodbath in the crypto market without ETFs: Despite the price drop, BTC ETF inflows remained positive ($26.9 billion).

The gap of about $95 billion is precisely why BTC underperformed almost all macro assets. There's nothing wrong with BTC itself; you don't even need to dig deep into unemployment or manufacturing data to explain it—it's just the "great rotation" by whales and "4-year cycle believers".

More importantly, Bitcoin's correlation with traditional risk assets like Nasdaq fell to its lowest since 2022 (-0.42). While everyone hoped for a breakout to the upside, this is bullish long-term as an uncorrelated portfolio asset sought by institutions.

There are signs the supply shock is over. Therefore, I dare to predict a BTC price of $174,000 for 2026 (equivalent to 10% of gold's market cap).

2. Airdrops Clearly "Did Not" Disappear

Crypto Twitter (CT) once again claimed airdrops were dead. But in 2025, we saw nearly $4.5 billion in major airdrop distributions:

Story Protocol (IP): ~$1.4B

Berachain (BERA): ~$1.17B

Jupiter (JUP): ~$7.91M

Animecoin (ANIME): ~$7.11M

The change lies in: points fatigue, stronger Sybil detection, and lower valuations. You also need to "claim and sell" to maximize profits.

2026 will be a big year for airdrops, with heavyweights like Polymarket, Metamask, Base(?) preparing to launch tokens. This isn't the year to stop clicking buttons, but to stop betting blindly. Airdrop "farming" requires concentrated efforts on high-conviction bets.

3. Fee Switches Are Not Price Appreciation Engines, But a Floor

My prediction was: fee switches don't automatically drive token prices higher. Most protocols don't enough generate revenue to support their massive market caps.

"Fee switches don't affect how high a token can go; they set a 'price floor'."

Look at projects ranked by "holder revenue" on DeFillama: Except for $HYPE, all high revenue-share tokens outperformed ETH (though ETH is now the benchmark everyone challenges).

The surprise was $UNI. Uniswap finally flipped the switch and even burned $100 million worth of tokens. UNI initially surged 75% but then gave back all its gains.

Three revelations:

Token buybacks set a price floor, not a ceiling.

Everything this cycle is a trade (see UNI pump and dump).

Buybacks are only one side of the story; sell pressure (unlocks) must be considered, as most tokens remain low-float.

4. Stablecoins Capture Mindshare, But "Proxy Trading" Is Hard to Profit From

Stablecoins are going mainstream. When I rented a motorbike in Bali, the owner even requested payment in USDT on TRON.

Although USDT's dominance fell from 67% to 60%, its market cap still grew. Citibank predicts the stablecoin market cap could reach $1.9 to $4 trillion by 2030.

In 2025, the narrative shifted from "trading" to "payment infrastructure". However, trading the stablecoin narrative wasn't easy: Circle's IPO gave back all its gains after a surge, and other proxy assets underperformed.

One truth of 2025 is: everything is just a trade.

Currently, crypto payment cards are exploding due to their convenience in bypassing strict bank AML requirements. Every card swipe is an on-chain transaction. If direct peer-to-peer payments bypassing Visa/Mastercard emerge in 2026, that would be a 1000x opportunity.

5. DeFi Is More Centralized Than CeFi

Here's a bold take: DeFi's business and TVL are more concentrated than Traditional Finance (CeFi).

Aave commands over 60% of the lending market share (compared to JPMorgan's 12% in the US).

L2 protocols are mostly multi-billion dollar unregulated Multisigs.

Chainlink controls almost all value oracles in DeFi.

In 2025, the conflict between "centralized equity holders" and "token holders/DAO" became apparent. Who truly owns the protocol, IP rights, and revenue streams? Internal disputes at Aave showed token holders have fewer rights than we thought.

If the "Labs" ultimately win, many DAO tokens will become uninvestable. 2026 will be a key year for aligning the interests of equity and token holders.

Conclusion

2025 proved one thing: Everything is a trade. Exit windows are extremely short. No token has long-term conviction.

The result is that 2025 marked the death of HODL culture, DeFi turned into Onchain Finance, and with improving regulation, DAOs are shedding their "pseudo-decentralized" disguise.

Related Questions

QAccording to the article, why did Bitcoin's performance lag behind almost all macro assets in 2025?

ABecause long-term holders (OGs) sold approximately 1.4 million BTC, worth about $121.17 billion, creating a $95 billion gap that was only partially offset by $26.9 billion in ETF inflows. This 'great rotation' by large holders and '4-year cycle believers' was the primary reason, not underlying issues with Bitcoin itself.

QWhat was the author's key realization about 'fee switches' for protocol tokens in 2025?

AThe author realized that fee switches do not automatically drive token prices higher. Instead of being an engine for price appreciation, they set a price floor. The revenue most protocols generate is insufficient to support their large market caps, and token buybacks establish a lower bound, not an upper limit for the price.

QWhat major shift in the stablecoin narrative occurred in 2025, and what was the associated investment challenge?

AThe narrative shifted from 'trading' to 'payment infrastructure,' with stablecoins gaining mainstream adoption for payments. However, the investment challenge was that trading the stablecoin narrative was difficult; proxy assets like Circle's IPO saw initial surges but then gave back all their gains, illustrating that 'everything is just a trade' with very short exit windows.

QHow does the article argue that DeFi is more centralized than CeFi (Traditional Finance)?

AThe article argues that DeFi is more centralized based on extreme market concentration: Aave holds over 60% of the lending market (vs. JPMorgan's 12% in the US), L2 protocols are often multi-billion dollar unregulated multisigs, and Chainlink controls nearly all value oracles for DeFi. Furthermore, conflicts between centralized equity holders and token holders/DAOs revealed that token holders have fewer rights than assumed.

QWhat does the article identify as the most significant cultural shift in crypto during 2025?

AThe most significant cultural shift identified was the death of the HODL (long-term holding) culture. The year proved that 'everything is a trade,' exit windows are extremely short, and no token possesses long-term conviction, marking the end of the strategy of simply holding assets for the long term.

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363 Total ViewsPublished 2025.05.13Updated 2025.05.13

What is $BITCOIN

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