According to Forbes, Bitcoin’s 2025 supercycle collapsed as prices plunged below $90,000, erasing all yearly gains. The crash began in mid-November when Federal Reserve minutes revealed a “strongly divided” committee unable to cut rates due to tariff-driven inflation. Simultaneously, Peter Thiel’s Founders Fund and Softbank sold their entire Nvidia stakes, signaling the end of the “exponential tech” trade. Regulatory hopes died when SEC Chair Paul Atkins delivered his strict “Project Crypto” speech on November 12, while the BITCOIN Act promising $100 billion in government purchases failed in committee. The final blow came at $89,600 when institutional ETFs went underwater, triggering $2.3 billion in weekly outflows and automated selling.
The liquidity trap
Here’s the thing about Bitcoin‘s recent behavior – it’s been acting less like digital gold and more like a leveraged bet on cheap money. The entire 2025 bull thesis basically assumed the Fed would keep cutting rates to stimulate the economy. But when tariff policies pushed inflation up by 11%, the central bank got trapped. They couldn’t provide the liquidity the market was counting on. So Bitcoin, which thrives on easy money, suddenly found itself starving for oxygen. It’s a harsh reminder that crypto isn’t as decoupled from traditional finance as its proponents claim.
When the pros bail
The really telling signal came from outside crypto entirely. While retail investors were still memeing about “Uptober,” sophisticated players like Peter Thiel’s Founders Fund were quietly exiting their Nvidia positions. Now, why does that matter? Because Bitcoin had been trading in lockstep with AI stocks as part of the “future tech” basket. When Thiel cashes out of the future, algorithmic trading bots that link these assets start selling everything. It’s the ultimate “smart money” signal – and it suggests the entire exponential growth narrative might have peaked.
The fantasy unravels
This is where the psychological damage really set in. The crypto industry had convinced itself that the new administration and SEC Chair Paul Atkins would deliver regulatory salvation. Instead, they got strict “token taxonomy” and the death of the BITCOIN Act. Remember that $100 billion government purchase idea? Gone. The sovereign bid was always a fantasy, but when the market finally accepted that reality, the speculative premium evaporated overnight. It’s a classic case of buying the rumor and selling the news – except the news never came.
The institutional accelerator
And then things got mechanical. When Bitcoin crossed below $89,600 – the average cost basis for those massive Spot ETFs – billions in institutional capital suddenly went underwater. Risk management models at major funds triggered automatic sell orders, creating a death spiral. The very wall of money that was supposed to protect Bitcoin actually accelerated the crash. It’s ironic, really – the institutional adoption that was meant to legitimize crypto ended up making it more fragile. Wall Street proved to be the ultimate fair-weather friend, dumping positions the moment things got rough.
Winter is coming?
So where does this leave us? The damage from November 2025 looks structural, not just technical. The famous “Four Year Cycle” that predicted a late-2025 peak appears broken. Bitcoin now sits in a kind of no man’s land between failed narratives and hostile macroeconomic reality. Without the digital gold facade or regulatory tailwinds, investors are left holding a volatile asset in a risk-off world. The supercycle is dead – and what comes next might make the crypto winter of 2018 look mild by comparison.
