Bitcoin To 0? Challenging Burry's Thesis

Summary Bitcoin (BTC-USD) has entered a bear market, but historical patterns and institutional adoption suggest a strong long-term recovery. BTC's sell-off is closely correlated with software and tech sector weakness, driven by macro factors and market rotations. Programmed scarcity, increasing institutional integration, and critical mass adoption underpin BTC’s enduring value despite volatility. I favor a strategic DCA approach, allocating $68K, $57K, and $40K, or upon confirmation of a technical reversal. Thesis Summary Bitcoin ( BTC-USD ) has decidedly entered a bear market, and as is often the case during drawdowns, the most extreme bears are crawling out of the woodwork to take a victory lap. Notably, Michael Burry has put out a $0 price target for Bitcoin. But we’ve seen this story play out before, and it pays to be a contrarian, in my opinion. Yes, Bitcoin could drop lower, but we're approaching levels at which a smart strategy of DCA will yield great returns in the long term. Let’s start by understanding why Bitcoin is selling off. The Bitcoin-Software Sell-Off First off, it's important to note that this sell-off isn’t isolated. The broader tech sector is selling off with Bitcoin, and what’s most important is that software stocks, especially, have been selling off. What does this have to do with Bitcoin? BTC-XSW (Tradingview) As we can see in the chart above, software and Bitcoin are strongly correlated and have been moving in sync for quite some time. There are macro reasons for this , but we could also make the argument that, fundamentally, Bitcoin is software. Software has been threatened by AI, and the overall market has seen a rotation away from tech. There's a prevailing narrative right now that AI has become so good at coding that it has commoditized software, and while there's some truth to this, I believe the sell-off may be overdone. Why the Sell-Off? There are a lot of reasons we could attribute this sell-off in Bitcoin and tech. The Kevin Walsh nomination Mid-term seasonality Inflated AI expectations Frothy valuations Overbought technicals Dollar strength The market actually sees Warsh as a hawkish nominee, based on his previous criticism of policies like QE. This may also be a reason why we have seen the dollar bounce in recent days. DXY (Tradingview) This has also come at a time when the S&P 500 was already trading at record valuations, with a Shiller OE ratio approaching 40. And to top things off, the NDX had been struggling to make new highs, while the RSI was overbought and showing a bearish divergence. NDX TA (Trendspider) But let's not dwell on the past. What do we do now? Is this a time to buy, or is Bitcoin really going to 0? Bitcoin Isn’t Going To 0 We’ve seen this happen before, and every time we bounce back. BTC Price And Projection (Reddit) Every bear market has seen a drawdown of nearly 80% in Bitcoin. If that happens again, we’d be looking at Bitcoin dipping below $40,000. Yes, this would be painful, but Bitcoin to 0 just seems impossible in my opinion due to a few key reasons. Institutional Integration Bitcoin has moved from a retail experiment to a cornerstone of the global financial system. In the last year, we have seen institutional adoption of ETFs and new regulations in place to make Bitcoin mainstream, like the CLARITY Act, which will potentially come into effect in April. According to recent data , 86% of institutional investors have exposure to digital assets as of 2025. Immutable Scarcity It all comes back to the programmed scarcity in Bitcoin. This makes it a refuge from fiat currencies, which are continually undergoing debasement. This isn't something that can be stopped, not even by Kevin Warsh. Our debt-fueled system requires a constant increase in monetary supply. Hard assets will inevitably benefit from this, and I consider Bitcoin to be one. Bitcoin Utility This brings me to my next point, which is Bitcoin utility. The cryptocurrency can actually be easily stored and transferred. It may not serve well for day-to-day transactions, but it's a useful way of storing and transferring value. Bitcoin has reached critical mass adoption and acceptance, and this is what gives it true value. Like gold, which doesn’t really have industrial uses, its value comes from its scarcity and acceptance, and that isn’t going away. How I’m Playing the Bear Market The bottom line is, we can't predict the exact bottom, but we can lay out a plan to strategically allocate money at key levels or after we see a high probability setup that indicates a bottom is in place or a confirmed reversal. BTC TA (Trendspider) I’m basically looking at three key levels in this chart. The 200 EMA at $68,000 The 61.8% retracement at $57,000 The 76.4% retracement at $40,000, where we also have some volume support. Out of a 100% allocation, I would split that into 20%, 30%, and 50% and deploy that at each key level. Alternatively, if we saw a bullish MACD cross on the weekly chart, I’d start looking for signs of a reversal. BTC TA (Trendspider) Risks While on paper this sounds like a good plan, there are risks to this thesis. For starters, we're definitely reaching unprecedented times geopolitically, and while Bitcoin is still increasing in adoption, it could come under further scrutiny. And with big institutional players now in the market, things could play out differently this time around. There's a lot of speculation around, for example, what would happen if Strategy ( MSTR ) began to sell Bitcoin. And while I think the DCA strategy I have laid out above is a good plan, it has its limitations. Bitcoin could reverse sooner than expected, leaving investors underallocated, or it could go much lower, leaving us no option to DCA at even lower prices. Final Thoughts We’ve seen this happen before, and Bitcoin has bounced back stronger every time. This time, Bitcoin has a lot more going for it, with institutions and even world governments now invested too. In a world where silver drops 40% in a week, this kind of move should barely surprise us. For anyone willing to be patient, deploying capital over the next six months will likely be rewarded.