Five years after the crypto bubble warning: what it got right and what it missed

The crypto bubble burst and bitcoin reached new all-time highs

A message without charts or sources announced the end. The Federal Reserve and the European Central Bank would soon raise rates, liquidity would vanish, and another pile of paper would end up as a bubble, with zombie companies that were never profitable. The author did not hide the framework: he invoked the Austrian school’s business cycle theory, cited Huerta de Soto as a pastor, and defined bitcoin as a private currency to counter the central bank. Five years later, the forecast remains open and the price has strained the narrative.

What exactly was announced when selling all crypto assets?

That bitcoin would fall. Not that it would disappear. The author clarified: “I’m not saying bitcoin goes to hell, only that it will take a big dive.” The reasoning was based on a temporal coincidence: the asset’s cycle had trinc the 2009-2020 bubble cycle, and with rising rates, investors would find debt or simple savings more profitable. He added an ideological ingredient — private currency vs. central bank money — and a blame game that spared no one: some pointed to oil, others to capitalism, others to central banks and commercial banks operating with fractional reserve.

Why was there doubt about rate hikes?

Because Spain, it was argued, cannot handle the rate. If debt is already hard to service at current costs, any increase makes the bill unpayable and no one knows who will foot the bill. The usual answer circulated: civil servants and pensioners are untouched, so the adjustment falls elsewhere. The calculation was stark: raising rates by 0.5% would be enough to topple the entire accumulated debt mountain. The counter-argument came from the other side: banks would request refinancing when costs tighten, and bondholders would demand an inflation premium. In the end, it was said, reality prevails.

Twelve years of warnings that never came true

That is the uncomfortable flank. The objection repeats with a concrete figure: twelve years of hearing “this is going to burst,” practically since bitcoin’s inception, without it bursting. From this arises an inverse rule that veterans handle like a clock: when catastrophic warnings abound, it is time to buy. Not everyone places the threat on the central bank; some see it in China and its ban on crypto, while others directly call it an pyramid scheme. The rebuttal lies in the same discussion: the pyramid scheme would be pensions or a central bank that also operates with fractional reserve. Each side has its suspect.

The four data points supporting the bearish scenario

It was not all faith. The list of quantifiable arguments was this: since April 2020, more inexperienced people have invested in the stock market than in the last thirty years; most crypto holders do not diversify their portfolios; bubbles burst in a day or two, and there are the Black Thursdays and Fridays; and recent growth relies on debt, so when borrowers fail, all the dominoes will fall. On this basis, the conclusion was that the crash would not come from rates, but because it had to come.

From “I was wrong” to bitcoin at 60,000 euros

The journey has two twists. The first is a mid-way retraction: “I was wrong.” The second is the scoreboard. The final leg arrives with bitcoin at 60,000 euros, breaking the prophecy’s timeline. One side argues the warning was right because the bubble burst shortly after, and that recalling the asset hitting new highs three years later is irrelevant. The other responds that the bubble burst because it had to, not because of rates, and that those who sold trinc the warning are losing money. Even more uncomfortable: those who sold and bought back lower made a lot, and those who went short, even more.

In the same stretch appear the names sustaining today’s narrative: Cardano, XRP, dog-named coins, the halving, jabs at failed seers and prophecies, and the argument that world leaders — including Trump and Elon Musk — promote crypto while the number of businesses accepting payments with them grows.

And the staggering fact is this: bitcoin at all-time highs with rates at record levels. The mechanical relationship between liquidity and price that sustained the entire warning does not hold in the stretch everyone remembers.