When does Bitcoin stop going up?

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I was recently asked to review a digital asset hedge fund comprising mainly Bitcoin for a high net worth investor. The pitch looked professional, and the three-year live track record looked impressive. However, the giveaway that something was not kosher, at least to my standard of kashrut, was not the Michael Saylor quote that Bitcoin will go to $13 million in 21 years or Larry Fink’s declaration that Bitcoin is an asset comparable to Gold. The giveaway was the forecast return of 9% per quarter.

This crazy speculation being passed as sound investment necessitates a response to help clarify something most people are missing.

One of the most popular mantras among Bitcoin believers is that “there will only ever be 21 million.” Scarcity, they say, ensures that Bitcoin’s price must rise forever. But that logic confuses scarcity with appreciation—a subtle yet crucial mistake. Scarcity may explain why something can hold value, but it does not guarantee that its price will keep rising indefinitely.

Think of gold. It’s scarce, mined with difficulty, and can’t be printed by decree. Yet over long periods, gold's purchasing power tends to stabilise rather than explode. It serves as a store of value, not a get-rich-quick asset. Once the world accepts that an ounce of gold is “enough” to preserve wealth, it ceases to be a speculative instrument. Its role is defensive: to protect savings from inflation, currency debasement, or political folly—not to multiply them. One needs to reflect on this as well if the current speculative nature of the Gold bull market has sucked you in, Bitcoin style.

Bitcoin’s natural destiny is similar. It is a monetary good, not a productive asset. Its value proposition lies in its credibility: a digital instrument that cannot be inflated, seized, or censored. As adoption broadens, its volatility should decline, its returns compress, and its function shift from speculative reflexivity (“I buy because others will buy”) to monetary maturity (“I hold because it preserves purchasing power”).

This transition marks the point when Bitcoin stops “going up”. The speculative crowd—those treating it like a tech stock—eventually gives way to monetary holders who simply want to hedge fiat risk. Price appreciation then tracks the pace of monetary debasement, not the rhythm of speculative mania.

Paradoxically, Bitcoin will have “won” only when its price stops thrilling anyone. When it behaves as predictably dull as Treasury bills or gold, it will have completed its evolution—from speculative rocket to monetary anchor.

Against this backdrop I have to rehash (excuse the pun; in fact today they are all over the place, rather punny) my consistent calling out of MicroStrategy and its High Priest Michael Saylor. There have been more than 78 copycats who have replicated his Bitcoin Balance Sheet Treasury shenanigans. Most are rather quiet at the moment as MicroStrategy chokes on a 50% drawdown, and many of its copycats struggle for survival.

The average price MicroStrategy has paid for the $33 billion Bitcoin it owns is $66,000. The trade, I believe, is the most sensible way to play a positive view on Bitcoin: go long Bitcoin and short MicroStrategy. The chart below shows the relative performance of the two assets. I have been preaching this trade since close to the ratio peak. I see this ratio continuing its downtrend until MicroStrategy is finally delisted as a bankrupt company.

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