Is Bitcoin Broken?
February 25, 2026
Bitcoin is down roughly 50% from its October high. If this is your first Bitcoin bear market, I suspect you might be wondering: Is Bitcoin broken?
The short answer is no. But I think it's worth explaining why, because any discomfort you're feeling right now is real and a 50% decline warrants a reminder of why we continue to hold it (or “HODL” as it’s known in the Bitcoin community).
When we added Bitcoin to client portfolios, we did so with the explicit expectation that drawdowns of this magnitude would occur. Every prior Bitcoin cycle has produced one. In 2011, Bitcoin fell 93% from its high. In 2013-2015, it fell 85%. In 2017-2018, 84%. In 2021-2022, 77%. A 50% drawdown is not pleasant, but it is not unprecedented, and it is not, by historical standards, unusually severe. In fact, the current decline has been more orderly, with roughly half the day-to-day price swings of the 2022 bear market.
What I can't tell you is whether the bottom is in. Bitcoin bottoms tend to be long and grinding, not the sharp V-shaped recoveries that sometimes occur in equity markets. Prices often settle into a range and trade sideways for months as ownership gradually shifts from those who bought for the wrong reasons to those who understand the asset more deeply and are willing to hold through uncertainty. That process takes time and it can be boring and demoralizing in equal measure. But it is how every prior cycle has played out.
The more important question, though, isn't what Bitcoin's price is doing. It's whether the problem Bitcoin was designed to solve still exists.
I believe it does, and I believe it's only getting worse. The fiscal trajectory of governments worldwide hasn't improved; it's deteriorated. Deficits are larger. Debt levels are higher. The structural incentive for central banks to print money to service that debt hasn't changed. None of this is speculative or ideological. It's arithmetic. When a government spends more than it collects in taxes, the difference has to come from somewhere, and increasingly that somewhere is the central bank's balance sheet. Bitcoin was designed to exist outside of that system: a scarce monetary asset with a fixed supply of 21 million coins, no counterparty risk, no trusted authority, and a monetary policy that no committee can alter.
In the current geopolitical environment, the case for Bitcoin has arguably strengthened. As sanctions expand, tariffs escalate, and capital controls tighten across various jurisdictions, the value of holding wealth that doesn't depend on any government's financial infrastructure becomes more apparent. Bitcoin is portable in a way that real estate, gold, and even bank deposits are not. You can carry it across borders without permission, or send it electronically anywhere in the world without intermediaries, and without anyone's ability to freeze or block the transaction.
And the network itself? It hasn't skipped a beat. Approximately every ten minutes, it produces a new block, like a clock time-stamping monetary transactions. It doesn't pause for bear markets. It doesn't respond to sentiment. It just ticks. The supply cap is unchanged. The rules are unchanged. The protocol doesn't know what the price is, and it doesn't care.
So what are we doing? We're not selling. If anything, we're rebalancing: methodically buying into these depressed prices. We sized this allocation to be tolerable through exactly this kind of decline, and that was intentional. The thesis that supported adding Bitcoin to a diversified portfolio hasn't gone away, and neither should the allocation. For those who initially chose a smaller position, periods like this have historically presented opportunities to increase exposure for those with the conviction and comfort to do so. If you've been considering whether to move toward a larger allocation, it would be a good time to start having that conversation. You can now assess both your ability to withstand the discomfort of a large decline and your conviction in the longterm thesis. Bear markets are how Bitcoiners are forged, and with each cycle that base expands creating a stronger and stronger foundation for the next bull run.
I won't pretend to know where Bitcoin's price will be in six months. I don't know, and I would encourage skepticism toward anyone who claims they do. What I do know is that the problem Bitcoin solves (the endless expansion of the money supply and the need to trust institutions that have repeatedly demonstrated they don't deserve it) is not going away. It is, if anything, accelerating.
Governments will keep printing. Bitcoin will keep ticking.