The main threat to Bitcoin lies not in a market crash. Far more dangerous is ordinary boredom and a prolonged sideways trend. Such stagnation slowly kills investors' faith in the asset's further growth. This opinion was shared by Ki Young Ju, founder of the analytics platform CryptoQuant.
In his words, the industry will weather a sharp drawdown without major problems. However, for that it is important to preserve faith in the next wave of growth. On the contrary, prolonged stagnation completely destroys the very story on which demand rests.
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The danger of a prolonged sideways trend
The analyst's logic is built around the STRC structure (Strategy's perpetual preferred shares). It is precisely through it that Michael Saylor, founder of Strategy — the largest BTC investor among public companies — finances cryptocurrency purchases. In the expert's opinion, the structure becomes vulnerable during certain periods. The danger arises not when the price simply falls. Real problems begin when the price moves within a narrow range for many years.
Of course, a sharp drop in the price can be survived. The market copes with it as long as faith in an upward surge remains. Prolonged stagnation, on the contrary, literally destroys the main narrative. As a result, buying demand weakens. In addition, the premium on the company's shares contracts. The process makes Saylor's capital-raising machine less stable. Therefore, the entrepreneur's real task looks different. He needs not just to buy up coins. It is important to give the market a fundamentally new reason to believe in the asset.
Narratives are losing strength
Over ten years of work in the industry, Ju has drawn an important conclusion. The essence of the first cryptocurrency hardly changes. Only the story around it transforms. It is precisely these narratives that explain why the price should rise. However, most of the old stories today look completely exhausted.
Source: BeInCrypto
