Bitcoin has rebounded to around the $78,000 to $79,000 level, yet I actually reduced my position even further. This is not just simple profit-taking—it’s based on the view that the next bull market may not be as strong as before.

Over the past few years, I have held Bitcoin with the largest allocation. I added leverage during bear markets, closed out small positions at $70,000, and reduced my holdings to about 30% between $100,000 and $120,000. I also bought small amounts when it fell below $50,000 in 2024, and again earlier this year when it rose to $60,000. I did it all because I believed in long-term upside.

But my thinking has changed. First, the key issue is that Bitcoin will have difficulty absorbing a new class of investors in the next cycle the way it did before. The previous cycle expanded from retail investors to institutional investors, and even to giant asset managers like BlackRock. Now, the next stage would need to be reflected in the financial statements of central banks or sovereign wealth funds, but it’s unlikely to happen within 2 to 3 years. U.S. state governments have also pushed for legislation related to holding Bitcoin, but only a very small number have actually passed it. Central banks are not showing interest due to Bitcoin’s volatility, its short history, and competition from gold.

Second, my opportunity cost has increased. Over the past 6 months, I have found more attractive companies, and the current price is fairly good. The priority for rebalancing my portfolio has shifted.

Third, the entire cryptocurrency industry is in a downturn. Most Web3 models have failed, and even DeFi—despite being the one that can generate cash flow—has been performing poorly as it moves further into its lifecycle. As the number of high-quality native assets shrinks, DeFi businesses are also contracting. If the industry’s foundation gets smaller, Bitcoin demand could decline as well.

Fourth, the funding costs for Strategy, the largest buyer of Bitcoin, are continuing to rise. Currently, the interest rate on the perpetual preferred they issue is already at 11.5%. Even more serious is that they plan to change the interest payment cycle from monthly to every two weeks, which means Strategy’s financial situation is getting tougher. Whatever “every two weeks” means, this change suggests that funding pressure has intensified. Aside from Strategy, most of the Bitcoin DAT-related stocks that were once active have almost disappeared. When the buying pace of the largest Bitcoin holder slows down, significant selling pressure can follow.

Fifth, Bitcoin’s competitor, gold, has narrowed the gap. We believed Bitcoin was superior to gold in divisibility, portability, verifiability, and decentralization. But now tokenized gold has emerged, and it is growing rapidly while being no different from Bitcoin in terms of portability and divisibility. Many people say tokenized gold depends on centralized trust, but in fact, most stablecoins are also based on centralized trust.

Sixth, the problem of insufficient security budgets worsens with every Bitcoin halving. Most new revenue streams—such as signatures or L2 fees—have failed. Quantum computing isn’t a major concern, but this is still an unresolved issue.

Of course, I have reduced my position, but I remain optimistic about Bitcoin. Otherwise, I would have sold everything. It still represents the largest share of my portfolio, and I hope it continues to rise.

If conditions change, I will buy again—if external developments weaken the negative case, or if new positive factors emerge and the price becomes reasonable. But if the price is already too high by then, that means I didn’t understand this asset properly, and I have to accept the outcome. This is just my personal opinion.