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When will Bitcoin crash?

Let me clarify upfront: I am not questioning Bitcoin’s utility. I have no idea whether Bitcoin will eventually become the global currency or merely a speculative asset. Time will tell. However, one thing is almost certain—Bitcoin is likely to crash spectacularly at some point, driven by the unpredictable nature of human behaviour.

The Bitcoin Experiment: A Hypothetical Scenario


Let’s say you have £1 million in investible assets. You decide to allocate 10%—£100,000—into Bitcoin. Historically, Bitcoin has demonstrated mind-boggling growth, with a compound annual growth rate (CAGR) of 109.07% in EUR terms over the past 13 years. If that growth rate persists, your £100,000 could grow to £3.2 million in just five years.

Meanwhile, you invest the remaining £900,000 in a diversified portfolio of traditional assets like property, equities, and bonds, achieving a conservative 7% annual growth. After five years, this portfolio grows to £1.2 million.

The result? Your initial 10% Bitcoin investment now accounts for over 70% of your total portfolio, which has grown to £4.4 million. Bitcoin’s meteoric rise has transformed you into a multimillionaire.

The Paradox of Simplicity


Traditional investments demand time and attention—monitoring, rebalancing, and active decision-making. Bitcoin, by contrast, requires no effort. You buy it, hold it, and watch its value soar (or crash). The irony? While Bitcoin may one day replace fiat currency, its value is still measured in the very fiat currency it aims to disrupt.

The Emotional Rollercoaster of Wealth


As a newly minted multimillionaire, you face decisions you never anticipated. Do you upgrade your lifestyle—buy a holiday home, a luxury car, or some art? Do you hold your Bitcoin, hoping it continues its upward trajectory, or do you sell some to enjoy your wealth?

Here’s the catch: If someone asks you to explain how Bitcoin works, you likely can’t. Few investors truly understand its inner workings, relying instead on their gut and the belief that its value will keep climbing.

The Dilemma of Selling


At what point do you cash out? The phenomenal returns from Bitcoin can make traditional investments seem dull in comparison. You might even be tempted to sell your other assets to buy more Bitcoin, doubling down on your high-risk position.

But selling Bitcoin presents a different challenge. What if it keeps climbing? If Bitcoin grows another 100%—and then another—you could miss out on £10 million in additional gains. Yet by holding on, you risk a sudden crash wiping out your fortune.

When Greed Meets Fear


As Bitcoin’s value rises, the emotional stakes intensify. Every new price milestone feels like a signal to sell—but what if it’s not? Conversely, every market dip triggers fear of a crash. Do you sell 50% to lock in some profits, or hold on, knowing you could still lose big?

This is the paradox of Bitcoin: the same greed that drives its purchases can also lead to its downfall. The more capital you gain, the harder it becomes to accept the risk of losing it. At some point, the psychological toll becomes unbearable, and investors start to sell.

The Domino Effect


When enough investors decide to cash out, the momentum can trigger a crash. Will Bitcoin believers step in to stabilize the market? Perhaps. The cycle of fear and greed may restart, fueling another speculative bubble. But eventually, the cycle ends—and when it does, the crash may be catastrophic.

A Final Thought


Bitcoin is a wild ride. For some, it’s an exhilarating gamble with life-changing rewards. For others, it’s a source of unrelenting anxiety. Whether Bitcoin becomes the currency of the future or just another speculative bubble, one thing is certain: its journey will be defined by the human emotions of greed, fear, and uncertainty.

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An Independent Wealth Management and Financial Adviser

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The Wealth Coach is a trading name of Murray Round Wealth Management Limited authorised and regulated by The Financial Conduct Authority

The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK. The Wealth Coach is a trading name of Murray Round Wealth Management Limited which is authorised and regulated by the Financial Conduct Authority. Murray Round Wealth Management Limited is entered on the FCA register under reference 194133. Company number 4010289. Registered address 2 Claremont Bank, Shrewsbury, SY1 1RW Telephone: 01743 248018 or email hello@thewealth.coach. Please note that information on this site should not be viewed as a personal recommendation or solicitation to deal.

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Privacy Policy | Terms & Conditions  | Cookie Policy

An Independent Wealth Management and Financial Adviser

  • Instagram
  • Facebook
  • Twitter
  • LinkedIn

The Wealth Coach is a trading name of Murray Round Wealth Management Limited authorised and regulated by The Financial Conduct Authority

The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK. The Wealth Coach is a trading name of Murray Round Wealth Management Limited which is authorised and regulated by the Financial Conduct Authority. Murray Round Wealth Management Limited is entered on the FCA register under reference 194133. Company number 4010289. Registered address 2 Claremont Bank, Shrewsbury, SY1 1RW Telephone: 01743 248018 or email hello@thewealth.coach. Please note that information on this site should not be viewed as a personal recommendation or solicitation to deal.

The Wealth Coach

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