Bitcoin's Next Peak Is Further Away Than You Think. Here's Why | Saifedean Ammous

Saifedean Ammous argues that Bitcoin’s declining volatility could change who is willing to hold it, even if demand from existing crypto investors eventually delivers diminishing returns. He says Bitcoin’s latest drawdown was about 53%, compared with a previous decline of 77%, and that it has not fallen 70% since 2021–2022, an interval approaching five years. Because a 53% drop leaves roughly twice as much value as a 77% drop, he sees the smaller drawdowns as potentially significant to institutional investors concerned about losses. The episode’s outlook rests less on a precise peak date than on how this changing risk profile could broaden demand.

Ammous expects Bitcoin to rise over the next couple of years. If it remains above the bear-market low of $59,000 and keeps moving higher, he expects capital to flow in and sees the possibility of enormous upside. He argues that demand from investors already active in crypto may have limited room to expand, while lower volatility could make Bitcoin accessible to new pools of capital. These are conditional expectations, not a guarantee: the $59,000 level and continued upward movement are central to his bullish scenario.

He points to Michael Saylor’s strategy of turning Bitcoin appreciation into cash-flow-generating products as one possible way to reach investors who cannot tolerate Bitcoin’s price swings. Ammous thinks Saylor’s purchases could also help reduce volatility by bringing in demand less closely tied to crypto-market cycles. He sees potential in Saylor’s products and in MicroStrategy, but prefers holding Bitcoin itself and is not recommending those products. Investors who need advice to assess Bitcoin-linked financial products, he says, should probably avoid them; other financial services require careful scrutiny of balance sheets, terms, and risks.

Ammous frames Bitcoin as protection against monetary and fiscal instability, and as a way to reduce the pressure to borrow, constantly reshuffle investments, or track financial news. He recommends buying and holding Bitcoin over the long term. His broader concern is that governments are unlikely to choose fiscal restraint in the next few years, with more war and spending likely. He cannot predict whether the eventual adjustment will take the form of continued currency devaluation, formal default, or a major official devaluation, but expects faster dollar depreciation to remain the default response to government liabilities.

He also challenges the rationale for a 2% inflation target, tracing its adoption to New Zealand in the 1980s and saying other countries followed without a coherent justification. He argues that CPI can understate inflation when consumers switch to cheaper, lower-quality goods, such as replacing beef with soy. In his view, governments also benefit from lower reported inflation because veterans’ payments and Social Security are indexed to it. Scott adds that markets react to inflation relative to expectations: core inflation of 2.6% mattered in part because it was above the 2.5% forecast. The transcript’s headline CPI figure is unclear.

Rising 10-year Treasury yields are, in Ammous’s view, a warning of worsening U.S. fiscal conditions. He says the Trump–Musk spending-cut effort did not materially change government spending, describing DOGE’s overall cuts as roughly 17 cents and saying the Department of Defense budget rose about 50%. On technology risks, a speaker doubts that practical quantum computing poses an imminent threat but acknowledges limited expertise; if quantum computing eventually breaks current cryptography, the speaker says Bitcoin could restore an earlier UTXO state and move to a new algorithm, at the cost of days or weeks of disruption. The discussion also stresses that secure self-custody takes work, with multisignature setups reducing dependence on any one device or provider.