Blain’s Morning Porridge 17th December 2025 – Bitcoin and Crypto Further Detach from Reality
“If you don’t believe it, I’m not going to waste time trying to convince you.”
Global Markets surge ahead. Bitcoin has been left behind. Yet again the crypto bubble has popped. All that’s holding it up is buy-the-dip greater fools, hope and belief – none of which are strategies for success. Time for a reassessment of what Bitcoin is and isn’t, and why it’s time to stop wasting energy on it!
Christmas is traditionally a time of goodwill to all men – even the shills of the Crypto World.
I’ve been thinking what I can possibly do to help them at this time of festive joy? Should I give them a dopamine hit by telling them everything is fine, this is just a speed-bump -and not to worry because increasing global international adoption of crypto assets means eternal upside? Or should I gift them some tough love – by telling them the truth? How do you tell true believers they are worshipping false idols, and Crypto is all absolute bollchocks?
Bitcoin is down 20% on the year, and 30% down from its October peak. Trump’s memecon is worth a tad more than the square root of f***all. As it tumbles, the BTC Treasury concept pops, Gold rises, and stocks remain solid – it’s demonstrated, yet again, that Bitcoin does not store value, isn’t linked to the economy, and is not a digital safe haven. And don’t tell me its Energy – that’s utter bunkum.
The reality is Crypto is worth only what the market believes it’s worth – which isn’t as much as it was. And, in recent months the decline in its prices has confirmed Bitcoin is now wholly divorced from the direction of global markets.
So are tulips. The thing is I know very smart traders who are making very good money playing bitcoin. They don’t believe in it, but they game the price moves and use leverage to generate returns from playing the market sentiment.
2025 was an interesting year in global asset markets. Lots of worry, but no deep crisis. Despite all the fears about tariff consequences on trade, supply chains, inflation and rates, stocks have finished broadly higher. Bond markets have not staged the massive sell-off some predicted on debt loads and deficits. The dollar has not disappeared in a puff of logical smoke.
Positive outlooks for next year predict stronger earnings fuelling stock stability and upside, lower rates driving the bond markets, and a continuation of how AI rollout will underly a strengthening global economy. There are plenty of threats our there – which is why a healthy exposure to Gold will remain a key portfolio component.
Whatever happens, consumers are still going to buy food, cars, and clothes. Companies will continue investing in plant and upgrading their systems. Governments will be spending money on welfare, infrastructure, defence and medical services. Markets will watch carefully how invention, innovation, and delivery play out in company results, how consumers and governments respond to inflation, employment and rates, and how commodities respond to the pace of economic activity, all of which is fuelled by money and lubricated by the increasingly efficient global financial system.
It’s called the economy. Each of its parts and components act and influence each other to provide the tangible numbers and data the markets act upon. Understanding how the economy is working, and how all the interconnected parts relate, enables investors to make their informed decisions on “what happens next.”
The one “market” that is different is Crypto. It exists in a vacuum – effectively outside markets and the economy. Nobody uses it for anything except as an “asset”. It does nothing. It has never established a unique use case – except as a medium of exchange in criminal enterprise. For years we’ve been sold the story Crypto is magical “independent” or “freedom” money, that its scarcity means it’s going to infinity, that it’s a medium of exchange, that it’s a safe haven store of value or “digital gold”. But it does none of these things.
It isn’t correlated to anything in the real economy – it’s even detached from liquidity: the prospect of lower rates and the US Fed embarking on a renewed liquidity pump through QE buying bills hasn’t reversed the decline. Liquidity fuels speculation, and Bitcoin is the ultimate speculative asset.
And folk are losing confidence in it. That’s because there is nothing tangible about crypto. It isn’t actually part of the global economy I described above. It funds nothing. It enables nothing. You can’t buy or sell anything without monetising it first. All it does is go up, and now down. The shills promoting it like to claim it is now an investible asset class, but how?
The reality the whole $3 trillion crypto market is based on the belief that others believe in it. Nothing more.
This year we’ve seen that belief increasingly tested as Bitcoin and its associated paraphernalia of memecoins and other bogus nonsense continue to tumble as stocks settle down for the holidays. Yesterday Bitcoin crashed again – running out of greater fools stupid enough to buy the dip.
The 30% tumble since the peak in October is not as bad a crash as we’ve seen previously when crypto winters saw 70% plus declines. I’m pretty certain prices are still being held up by retail investors – always the folk who know the least – who have been persuaded into “buying the dip”, convinced by the utter tosh and nonsense they read on the crypto-wires, and hopelessly unaware the value of an asset with a zero use-case basis is zero. The reality is current buyers are likely to be recycled greater fools buying an asset the smart money is exiting from.
Lots of Crypto Believers will be screaming that’s nonsense, it’s a scarce resource that can only go up and institutions that have been buying. Have they? Let me water that seed of doubt with how the market is awash with stories of institutions selling, Whales bailing out, and even some of the original crypto-wallets suddenly selling down – perhaps they’ve been hacked? Even the poor fool who threw a hard drive into the rubbish, unaware it contained the only record of his crypto stash, has given up scouring the local dump looking for it. If institutions have been buying, it’s only because retail is paying them fees to do so, and are taking the risk.
And, in the deep background is that sometime soon the market will have to evolve to the consequences of the coming quantum revolution which could make breaking the codes of crypto easy. Ahead of quantum it’s likely the infrastructure of bitcoin, including miners, will simply move on.
2025 was a fascinating year in Crypto. For me it’s confirmed what I always knew – it’s all about narrative and how well the shills spin their stories.
It started badly for me. I’d called the US election in 2024 wrong and in a fit of blind optimism had shorted Bitcoin ahead of the vote. I was paying close attention to the new-fangled prediction markets, but I decided (based on my knowledge of what I myself reckoned) they were wrong. Doh! Ouch! Trump won a convincing victory, and Bitcoin surged. (I will be watching prediction markets closely from now on….)
It bounced even higher as President Trump not only launched his now worthless memecoin ahead of his inauguration, but talked up a Bitcoin strategic reserve, launched new legislation, declaring these would make the USA crypto capital of the World. And how did that work out then? Nothing happened…
In the last few days we’ve had Elon Musk on the wires, taking a break from not running Tesla, not sorting out SpaceX, while pleasuring himself on his personal social media megaphone X, telling the World that Governments are about to collapse, fiat money will vanish, and the only answer is Bitcoin… Whateva….
The response? Bitcoin down some more. Why has crypto deflated? Again.
One of my most interesting reads of 2025 was The Mysterious Mr Nakamoto by Benjamin Wallace. It describes in great detail the libertarian, cyber-punk, and extropian (living forever inside AI) roots of Crypto – and how Bitcon was founded in philosophical rants against the perceived evils of fiat currency. It leaves us little wiser on who Nakamoto is, was, or comprises. I loved the description of crypto as “the mathematical consequences of paranoid assumptions”.
What was never envisaged in the foundation myths of crypto is how the alternative currency bitcoin has now spawned its “stablecoins” linked to the dollar, and how the alternative to dollars has become a troubled dollar financial asset in its own right….
Far from Bitcoin being the alternative to dollars, now, apparently, the future of crypto is is “stablecoins”, tokens that represent dollars. In my personal experience I’ve always found dollars represent dollars more than adequately. I don’t need stablecoins to transact when a Revolut account works more than adequately. I have much the same issue with Tokenisation. Terribly interesting, but why? The more I read about Tokenisation of property creating an ownership revolution the more I am certain its bogus and irrelevant. Anything that makes markets more complex – which is what stablecoins and tokens do – means someone is extracting value from them.
The only thing that causes me momentary doubt in my belief Bitcoin is a total scam are the 1.1mm Bitcon held in the original Sakamoto wallets (he mined the original genesis coins). Nobody would just walk away from an easy $90 bln? Would they? Well maybe they never existed. Maybe they are dead? Maybe, just maybe The Nakamoto knows something we don’t and has infinite patience…. the fact is these wallets have never been touched.
Crypto shills keep telling me that crypto’s $3.4 trillion market capitalisation, (is it worth that much?) is 1.2% of total global investible assets, therefore I should have at least a 1% allocation to the “asset class”. Why? That’s a bit the cart driving the horse. I don’t have 0.1% of my net worth invested in soyabeans (market value of $300 bln) even though Soyabeans are a proper commodity with clear value and market rhyme and reason.
My “optimal allocation” towards an asset class I can see no underlying logic for remains zero.
Out of time and back to the day job…
Bill Blain
CEO – Windshift Capital
Author – The Morning Porridge
Partner – Shard Capital
Special Advisor – Spitfire Strategic Capital
