Reframing the 2025 Bitcoin Bull Market Reset

Briefing Notes contain: (1) a summary of podcast content; (2) potential information gaps; and (3) some speculative views on wider implications for Bitcoin. Most summaries are for Bitcoin-centered YouTube episodes but I also do some on AI and technological advance that spill over to affect Bitcoin.

Summary

The November 24, 2025 episode of What Bitcoin Did features James Check and Alec Dejanovic examining whether the sharp drawdown from above 120K to around 80K means the Bitcoin bull market has ended. They argue that onchain data, ETF flows, and IBIT options reveal a structural shift in who holds risk, as very old coins rotate into large, often opaque spot buyers. Their analysis highlights new cost-basis dynamics, shifting volatility patterns, and long-horizon security questions that matter for investors, institutions, and policymakers.

Take-Home Messages

1. Bull Market Recast: The guests argue that the 30–35% drawdown is better understood as an expectation reset within a still-intact structural bull market rather than a definitive cycle top.
2. Great Rotation of Old Coins: Check shows that a large share of very old coins has been sold into deep spot demand, leaving roughly 70% of invested wealth with a cost basis above 85K and shifting who bears downside risk.
3. ETF and Options Market Structure: ETF flows and rapidly growing IBIT options activity are reshaping volatility, liquidity, and yield strategies as institutions increasingly use basis trades and covered calls.
4. Macro Competition for Capital: Dejanovic emphasizes that strong AI and equity trades have diverted capital from Bitcoin in 2025, even as Bitcoin and gold remain key signals of systemic stress.
5. Quantum-Resilient Future: Both guests treat quantum computing as the final major unresolved security risk and call for post-quantum upgrade paths that preserve decentralization and property rights.

Overview

The discussion opens with Check and Dejanovic asking whether the recent drop from above 120K to around 80K should be read as the end of the Bitcoin bull market or a regime shift within it. Check argues that as the market matures, simple four-year halving analogies lose explanatory power and must be supplemented with onchain and flow-based metrics. He frames the current phase as a consolidation around a new equilibrium, where volatility resets expectations without necessarily reversing the long-term uptrend.

The guests then develop the idea of a “great rotation” or “IPO moment” in which very old coins, including many held for five years or more, have been sold into heavy spot demand. Onchain data indicate that roughly 70% of realized value now sits above 85K, meaning that earlier price ranges have become increasingly irrelevant to the cost basis of current holders. Dejanovic notes that this redistribution concentrates risk in newer cohorts, shaping both who can withstand future drawdowns and how quickly markets can recover after stress events.

Check identifies three pillars defining this cycle: persistent ETF inflows, exceptional hodler sell-side, and the emergence of IBIT-based options that enable covered-call strategies on spot Bitcoin. He argues that ETF data understate true demand because large spot buyers, potentially including banks, sovereigns, or other institutional actors, are accumulating outside listed products. The rise of options and basis trades, in his view, is beginning to influence the volatility surface and liquidity profile, even though the underlying scarcity mechanics remain unchanged.

Beyond microstructure, the conversation situates Bitcoin within a macro landscape shaped by constrained liquidity and a powerful run in AI-related equities. Dejanovic explains that capital has chased perceived near-term upside in AI and other trades, leaving Bitcoin temporarily less favored despite its role as a hedge alongside gold. The episode closes with both guests highlighting bear markets as psychological expectation resets and identifying quantum computing as a long-term threat that will require carefully engineered post-quantum upgrades that do not violate Bitcoin’s property-rights foundation.

Stakeholder Perspectives

1. Long-term Bitcoin Holders: Balancing conviction against the reality that most invested wealth now sits above 85K, increasing the psychological strain of drawdowns for newer cohorts.
2. Institutional and ETF Allocators: Managing risk in portfolios built near recent highs while learning how ETF flows, basis trades, and options overlays affect exposure and liquidity.
3. Sovereigns and Banks: Evaluating whether and how to accumulate Bitcoin quietly for reserves or balance sheets without signaling strategy prematurely or destabilizing existing monetary frameworks.
4. Regulators and Central Banks: Interpreting the systemic implications of large, opaque spot flows, ETF expansion, and derivatives growth in a market that increasingly interacts with traditional finance.
5. Developers and Security Architects: Designing credible post-quantum migration paths that protect users, maintain decentralization, and respect existing property rights as underlying cryptographic assumptions evolve.

Implications and Future Outlook

The episode suggests that future Bitcoin cycles will be defined less by fixed halving lore and more by evolving patterns of cost basis, liquidity, and institutional positioning. As more realized value migrates into higher price bands, percentage drawdowns may become shallower even as the absolute dollar losses for households and institutions grow. This shift will push risk managers, regulators, and product designers to rethink how they model stress scenarios and communicate volatility to stakeholders who entered near recent highs.

At the same time, the interplay between ETF flows, IBIT options, and off-exchange spot accumulation indicates that market structure will continue to converge with traditional asset classes. Basis trades, covered-call strategies, and cross-asset rotations from AI and equities will increasingly shape Bitcoin’s day-to-day behavior without altering its underlying scarcity. For decision-makers, the key task will be distinguishing between structural signals embedded in onchain data and tactical noise generated by short-term positioning and sector narratives.

Looking further ahead, the quantum threat highlighted by the guests underscores that the protocol’s security and governance must be treated as long-duration public goods. Designing migration paths to quantum-resistant signatures will require not only technical research but also broad coordination across wallets, custodians, exchanges, and end users. If this process succeeds while preserving property rights, Bitcoin can remain a credible long-term settlement and savings technology even as the cryptographic landscape shifts, reinforcing its role in institutional and sovereign planning.

Some Key Information Gaps

1. Who are the primary spot buyers absorbing billions in old-coin sell-side outside the ETF complex, and what are their mandates and time horizons? Identifying these opaque counterparties is essential for understanding systemic risk, reserve strategies, and the durability of current support levels.
2. How will the concentration of roughly 70% of invested wealth above 85K influence future drawdowns, volatility, and the speed of recovery from major sell-offs? Clarifying this relationship will help investors and regulators calibrate risk models, capital buffers, and communication strategies for higher-priced regimes.
3. In what ways will expanding ETF participation and IBIT options activity change Bitcoin’s volatility surface, liquidity profile, and sensitivity to macro shocks? Evidence on these dynamics is needed to design appropriate derivatives regulation, stress tests, and hedging tools for large institutional holders.
4. What upgrade paths to quantum-resistant signatures preserve decentralization while giving users a clear, timely migration option for vulnerable addresses? Answering this question will guide wallet, exchange, and custody design and determine whether Bitcoin remains a trustworthy long-horizon asset under quantum pressure.
5. How can the Bitcoin community design post-quantum migration rules that avoid freezing coins, respect property rights, and minimize market disruption when legacy coins move? Robust solutions here will shape legal certainty, user confidence, and market stability during any future mass transition to new key schemes.

Broader Implications for Bitcoin

Structural Maturation of Bitcoin Markets

As older coins rotate into large, often institutional-scale buyers and derivatives markets deepen, Bitcoin increasingly resembles a mainstream macro asset rather than a niche speculative instrument. This maturation implies that future shocks will propagate through balance sheets, risk models, and collateral frameworks in ways that regulators and institutions must anticipate. Over the next 3–5 years, the quality of data, analytics, and governance around these flows will largely determine whether Bitcoin’s integration into global finance stabilizes or amplifies systemic risk.

Repricing of Risk and Liquidity Across Portfolios

The competition between Bitcoin, AI-related equities, and other macro trades signals a world where capital allocators continuously reprioritize scarce risk budgets. As Bitcoin’s cost-basis landscape shifts higher, allocators will need new frameworks to compare its risk–reward profile with high-growth but unproven technologies, particularly under changing liquidity conditions. This repricing process will influence everything from institutional mandates and pension allocations to how households think about long-term savings in an increasingly volatile technological economy.

Sovereign Reserve Diversification and Monetary Governance

Quiet accumulation of Bitcoin by banks or sovereign entities points toward a gradual diversification of reserves away from a purely fiat-centric model. If this trend continues, governments will need to confront questions about transparency, sanctions design, and the interaction between Bitcoin holdings and traditional tools of monetary policy. Over a 3–5+ year horizon, even modest reserve allocations could alter geopolitical bargaining power, reshape currency blocs, and accelerate debates over new international monetary architectures.

Long-Horizon Security Governance in Open Protocols

The quantum-computing threat highlighted in the episode illustrates how long-lived open protocols must plan for security shifts that may be decades away. Bitcoin’s response will set precedents for how decentralized communities balance backward compatibility, user sovereignty, and systemic safety when fundamental cryptographic assumptions change. In the coming years, the governance norms built around a post-quantum roadmap could inform how other critical digital infrastructures—financial or otherwise—manage slow-burning but existential technical risks.