Long-time crypto participants say the latest price swings are routine, while new institutional investors struggle with Bitcoin’s sharp drawdowns.
Bitcoin’s recent slide has rattled a new wave of institutional investors, but long-time crypto advocates argue that the volatility is nothing out of the ordinary. According to entrepreneur Anthony Pompliano, Bitcoin’s pullbacks are a feature — not a flaw — and Wall Street newcomers simply aren’t accustomed to the magnitude or frequency of these moves.
Bitcoin’s Drawdowns Are Part of Its History
Speaking in an interview, Pompliano emphasized that Bitcoin typically experiences a major drawdown roughly every 18 months. The latest drop, he said, fits neatly within its long-term pattern.
He noted that Bitcoin has fallen 30% or more on 21 separate occasions in the last decade, reinforcing the point that these swings are routine for seasoned crypto investors.
“Bitcoiners are used to this,” Pompliano said. “Who’s not used to this are the people coming from Wall Street.”
The recent downturn coincides with year-end decision-making pressure — including bonus cycles — which Pompliano believes has added extra downward pressure on price as risk-averse newcomers reconsider their positions.
U.S. Trading Sessions Drove the Recent Sell-Off
Matthew Sigel, head of digital asset research at VanEck, pointed out that the correction — which briefly sent Bitcoin toward $82,000 — was driven largely during U.S. market hours.
He attributed the move to a combination of tightening liquidity, widening credit spreads, and investor anxiety about large capital flows into artificial intelligence projects amid a more delicate funding backdrop.
Volatility Is Fuel, Not a Flaw
Bitcoin’s volatility has climbed back toward 60, according to market data — a level that often precedes sharp movements in either direction. Analysts say this rising volatility is helping to set the stage for the next major trend.
Bitwise market analyst Jeff Park noted that higher volatility is consistent with environments where Bitcoin makes outsized moves.
Pompliano echoed the sentiment:
“It’s not a negative. I’d be worried if Bitcoin’s volatility was zero. You need volatility for the asset to go up.”
He added that Bitcoin’s long-term growth — approximately 240x over the last decade, translating to a 70% compound annual growth rate — won’t be repeated, but the asset still has room for substantial long-term gains.
Pompliano said that future annual growth in the 20%–35% range could still beat most equity benchmarks, reinforcing Bitcoin’s role as a compelling long-term allocation for diversified portfolios.
As institutional participation increases, analysts expect volatility to remain a central part of Bitcoin’s identity — not a deterrent, but a mechanism that fuels long-term price appreciation.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.