The Breakdown - The Bitcoin Bears Are Back In Town

Episode Date: November 18, 2025

The crypto market is facing a renewed period of intense fear as Bitcoin turned red on the year, briefly dropping below $93,000 amid a 10% weekly drawdown and the Fear & Greed Index hitting extreme lows. NLW explores whether this 25% correction marks the start of a traditional bear market or is simply Bitcoin transitioning into a more institutional asset with a new, potentially less cyclical return profile, noting the strange dissonance where positive structural news—like the Czech Central Bank acquiring BTC and the Harvard Endowment significantly increasing its position—fails to lift the price. The episode also analyzes the immediate impact of false Michael Saylor selling rumors and the macro headwinds from the Treasury General Account drawing liquidity, ultimately asking if investors should take a break from the market until the new year. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Monday, November 17th, and the bears are back in town. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. All right, friends, well, even as we start to ring in the holiday season, it is getting bleak over here. Bitcoin, in fact, has turned red on the year as new lows are tested.

Bitcoin saw another huge weekly drawdown of 10%, briefly dropping below 93,000 over the weekend. Bitcoin started the year at 93,500, so for an hour or so on Sunday, Bitcoin was negative year-to-date. Price has come up just an ever little bit after that, but we are now headed towards bare market territory. Bitcoin is around 25% off the highs, which is enough to raise serious questions about whether this is the end of the cycle. Analyst Nick Puckran wrote, This dip has been the smallest of this cycle, 25% versus 31% and 32%, but it feels so, so much worse. Sentiment is cooked.

As of Saturday, the Bitcoin Fear and Greed Index was in Extreme Fear with a nine-month low score of just 10. DRXL, a research manager at Masari wrote, In my eight years in crypto, I've never seen such dissidents between the headlines and the sentiment. Everything we once dreamed of is happening, and yet it somehow feels over. And that has been one of the most troubling signs over the past few weeks. The positive headlines continue to roll out, but none of them move the price.

Bloomberg's Eric Balcunis asked what people are actually expecting, asking, Did any Bitcoiners complain last year when Bitcoin was up 122%? Which was 5x the S&P or gold? Was anyone like, wait, Bitcoin's historical performance relative to risk assets says it shouldn't be this high, this is bad? No, you'll love the extra excess, double dip, and so this year you get nothing. still averages out to plus 50%. Lucky if you ask me. Now, it certainly doesn't feel that lucky if you've been holding Bitcoin all year, but Balcunas raises an interesting point. Bitcoin is now an institutional asset with a highly volatile but somewhat predictable return profile. Taking just one example,

micro-stratage's models assume a 25% compound annual growth rate. Under that metric, 2024 was an overshoot, and so perhaps it's reasonable for 2025 to be an undershoot. Looking at Bitcoin more like a normal institutional asset and less like a four-year lottery ticket, many analysts came to the conclusion that this drawdown is running out of steam. Sven Henrik of Northman Trader did some technical analysis and wrote, something potentially positive for Bitcoin Bulls, falling wedge, positive divergence, unconfirmed as of yet. Andre Dragosch, the European head of research at Bitwise, added, our crypto asset sentiment index also continues to show a positive divergence, i.e., sentiment index is bearish, but less so than during previous corrections despite lower prices.

Sellers are exhausted, and it shows. Bitwise CEO Hunter Horsley made a big call, commenting, we talk about four-year cycles, but the reality is that the model is based on a bygone era of crypto. Since the launch of the Bitcoin ETFs and new administration, we've entered a new market structure, new players, new dynamics, new reasons people buy and sell. I think there's a pretty good chance that we've been in a bare market for almost six months now and are almost through it. The setup for crypto right now has never been stronger. Now, speaking of stronger, plenty of people disagreed strongly. To some, it's bizarre to think that multiple new all-time highs would be made during a bare market, but pricing Bitcoin and gold or NASDAQ are basically anything but US dollars,

and there's been an undeniable slump over the past six months. Hunter's core point was that this doesn't look like the end of the 2021 cycle. It took until Q2 of 2022 for the rot to set in, but that year was punctuated by high-profile blowups and billions of dollars in fraud coming to light. This drawdown doesn't feel anything like 2021 when it was painfully obvious that a lot of funds and companies were over leveraged and way out over their skis. At the moment, it just feels like a loss of momentum. Of course, that doesn't mean there's no bodies waiting to float to the surface. The 10-10 flash crashes in the rearview for many, but aside from retail traders getting liquidated, we really haven't seen any damage in the

institutional corner of the market. Bitmine chairman Tom Lee doesn't think that's a reasonable assumption. He tweeted, to me, the weakness in crypto has all the signs of a market maker or two with a major hole in their balance sheet, shark circling to trigger a liquidation and dumping of prices. Is this pain short term? Yes. Does this change the ETH super cycle of Wall Street building on blockchain? No. P.S., this is not a time to use leverage. Don't get liquidated. Now, as the head of the largest Ethereum treasury company, Lee obviously has a vested interest in pumping his bags, but it's not unthinkable that we're witnessing a battle between market makers playing out in the order books and that this two will pass. Taking a broader

view, some are noting that the macro has been dismal for Bitcoin since the all-time high at the beginning of October. Financial educator Robert Kiyosaki tweeted, the everything bubbles are bursting. Am I selling? No, I am waiting. The cause of all markets crashing is the world is in need of a crash. The real reason I am not selling is because of the problem. The world is deeply in debt. And my bet is that the big print, as described in the Warren Sleppard's book, is about to begin, which will make gold, silver, Bitcoin, and Ethereum more valuable as fake money crashes. Alongside the long-term thesis, the short term has been nasty enough to explain the drawdown. The government shutdown meant that the Treasury General account built out of control to almost

a trillion dollars, sucking liquidity out of the system. That stress has been showing up in the repo market, and as the most liquidity-sensitive macro asset, it's completely logical that Bitcoin would suffer. In contrast, stocks are being driven by the anticipation of trillions of dollars of AI CAPEX, so they seem to be fighting through tough liquidity conditions. Legacy internet and infrastructure are brittle, plagued by downtime, coverage gaps, and outdated financing models. Communities and builders are left behind while capital sits locked out. Althea is changing that. Since 2018, their technology has powered resilient, sustainable networks across the U.S. and abroad. With

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Now, the relationship to public markets are actually an interesting dimension of this story. The intern account on Twitter posted on November 13th, for anyone that was not around during the 2022 crypto bear market, trust me, this is way worse. Now, surprising to him, a ton of people started to agree, so much so that he actually went back and clarified, saying, a little shocked by the amount of people agreeing with this post. Guys, 2022 was so much worse, it's hard to even compare. Credit shops were blowing up left and right, Friends were disappearing from telegram chats every day. Crypto companies going ghosts, not operating, but still exist like the Walking Dead,

funds closing their doors, charts were a constant falling knife with cascading liquidations. It wasn't only embarrassing to be in crypto. People assumed you were a legit criminal if you were here. Nick Carter, though, added some interesting flair to this, saying, 2025 is unironically worse, air quotes, because in 2022, bad things were happening, but crypto was the center of the action and the star of the show. You could describe negative price action to catalyst that you knew we were going to

through. Now, crypto is the forgotten child, with AI and the Mag 7 starring. Retail is focused on data centers quantum and rare earth stocks. Crypto is trending down based on no catalysts, just exhaustion and lack of attention, and buyers and a long dat hangover. Does this mean it's over? No, just the four-year cycle and alt-season are obsolete concepts. To make money, you have to actually deliver value, and that's a grim prospect to many. Finally, as much as people are hoping for a rate cut to change things, odds of a December rate cut have now dropped to just 44%, so it is far from clear that we'll get a big wave of relief to end the year. Now, one of the big stories that drove Bitcoin's sentiment into the dirt to end last week was rumors of Michael Saylor selling. On Friday, Arkham Intelligence

posted that around $4 billion in Bitcoin was being moved out of micro-strategy wallets. The claim was amplified by Walter Bloomberg setting everyone on edge. To make matters worse, Saylor chose that moment to post an AI-generated picture of himself escaping a sinking Titanic on a life raft. Bitcoin as a metaphorical life raft has meaning to Bitcoiners, but basically everyone else took the post to suggest that Bitcoin was the Titanic. Now, Saylor was quick to refute the selling claim posting on X. There is no truth to this rumor. He later went on CNBC and said, We are buying. We are buying quite a lot, actually, and we'll report our next buys on Monday morning. I think people will be pleasantly surprised. Sailor added, I think volatility comes with the territory.

If you're going to be a Bitcoin investor, you need a four-year time horizon and you need to be prepared to handle the volatility in this market. Over the weekend, Arkham did a deep dive on Micro Strategy's wallets to see what they could find. They reported that Micro Strategy has been making transfers for the past two weeks from Coinbase to an unknown new custodian. They believe the movement of funds on Friday were either transfers between entities or internal wallet rotations at one of the custodians. Still, it's clear that Micro Strategy selling would be a huge hit to sentiment and arguably the type of event that could actually plunge us into another crypto winter. And just because Micro Strategy isn't selling right now, it doesn't mean it's completely

impossible. Also at the end of last week, Micro Strategy stock traded below the value of their treasury for the first time. This ratio referred to as MNAV is now back to a 1.09 multiple, but that's not a lot of breathing room. To be clear, Micro Strategy does not have any liquidation risk at the moment. Their debt isn't collateralized by their Bitcoin and it doesn't start coming due until 2027. So MNAV falling below 1 really just means they can't sell stock to buy Bitcoin. They can still access funding in the debt markets. In fact, they closed a $700 million debt issuance last week. but it's clear that micro strategy is under a fair bit of stress as the market turns down.

I think at this point, though, most people in crypto feel that Saylor has earned the benefit of the doubt and are pretty sure that he has designed for these scenarios. Now, two small things that show or reinforce the idea that Ardum might be getting out ahead of itself. First, last week, Harvard tripled down on their Bitcoin strategy. The Harvard Endowment bought their first tranche of Bitcoin in quarter two, accumulating 117 million worth of Black Rock's ibit. Their Q3 disclosure showed the position had swelled to around 364, million at current prices. By share count, the position was increased by 257 percent, so Harvard actively bought more than twice as much Bitcoin in Q3 as they did in the previous quarter. The position is now

the single largest for the endowment, outweighing their $322 million in Microsoft, $235 million in Amazon, and $235 million in gold ETFs. It's still just a 0.6% waiting on the diversified $57 billion portfolio, but it feels meaningful that Harvard is still adding in a price-in-sensitive manner. Bloomberg's Eric Belcuna said this is as good a validation as an ETF can get. In other institutional news, the Czech Central Bank has acquired a test portfolio of a million dollars worth of Bitcoin. In a statement, the Central Bank announced that they had purchased the Bitcoin, along with an unnamed U.S. dollar stable coin and a tokenized deposit. The purchases were made outside of established international reserves and were considered

an experiment rather than a policy shift. Still, Central Bank's experimenting with Bitcoin is a new phenomenon. Czech Central Bank Governor Elis Miesel has been flagging this as a possibility over the past year or two. In January, he said the bank will consider holding up to 5% of their $140 billion worth of foreign reserves in Bitcoin. Alongside the purchase, the central bank released a 53-page report detailing how they're thinking about Bitcoin. They included a section that demonstrated a deep understanding of various custody models with the bank preferring sharing a multi-sig with an external custodian. The report also highlighted Bitcoin as an uncorrelated asset to stocks, bonds, and gold that might make up a diversified international reserve.

Connor Brown, the head of strategy at the Bitcoin Policy Institute, tweeted, a true zero-to-one moment for central banking. Point is, even if things feel bad for good reasons, there are still immense tailwinds and big structural shifts that all point to a positive future. So I don't know, man, maybe take the rest of the year off, stuff your face with some turkey, and check back to see how we're doing in January.

For now, that's going to do it for today's breakdown. Appreciate you listening, as always. And until next time, be safe and take care of each other. Peace.