Head of Investment Firm Describes Bitcoin’s Volatility as ‘Part of the Game’, 2026/02/08 15:20:47

The sharp decline in Bitcoin’s value, nearly 50% from its all-time high, is not a sign of a systemic crisis in the cryptocurrency sector but rather a normal phenomenon that should not cause concern, according to Gary Brode, founder of investment firm Deep Knowledge Investing and a 30-year veteran investor.

According to the businessman, the sell-off is a natural manifestation of Bitcoin’s inherent volatility. Those willing to endure and accept these “rules of the game” can expect significant returns in the long term, the investor emphasizes. Brode asserts that Bitcoin is not a “stone with no value” but an asset whose value, like that of gold, is subjective.  

“No asset in the world can be considered truly reliable. Gold, for example, requires storage and security costs; fiat currencies systematically depreciate due to issuance; even our own bodies and social connections are subject to degradation over time. The world is full of risks, and there are no guarantees,” Brode stated.

The main cause of the instability is the market’s reaction to the change in leadership at the U.S. Federal Reserve (Fed), the entrepreneur believes. Investors interpreted this as a signal that the Fed might adopt a hawkish stance—raising interest rates and making zero-yield assets, including Bitcoin, gold, and silver, less attractive. The situation was exacerbated by margin calls on leveraged positions, leading to a cascade of forced sales. 

Brode points to several factors contributing to the sharp drop in Bitcoin’s value, including increased trading volumes of BTC ETFs, rising electricity prices for miners, and the activity of early Bitcoin holders who mined or acquired coins at near-zero prices. Brode views the sales by early holders as profit-taking rather than a sign of an impending market crash. In his opinion, even if the largest public corporate holder of Bitcoin, Strategy, begins to sell its reserves, the number of coins realized will be insignificant, and Bitcoin will be able to weather this event and other pressures, although prices may temporarily decline. 

“Exchange-traded funds have provided investors accustomed to traditional financial instruments with access to Bitcoin through brokerage accounts and pension funds. Bitcoin derivatives and futures allow parties to settle in fiat currencies without transferring actual BTC. This increases the supply in the market, putting downward pressure on the price. However, in the long term, the limit of 21 million coins remains the key anchor of value. The history of the silver market demonstrates a similar mechanism: when physical demand begins to exceed the volume of paper settlements, prices rise sharply,” Brode explained.

Previously, Matt Hougan, investment director at crypto asset management firm Bitwise, promised a swift end to the bear market cycle and a rise in Bitcoin’s quotes.