Despite growing institutional acceptance and market maturation, the historic volatility of Bitcoin remains deeply rooted, according to a stark warning issued by venture capitalist Vineet Budki. Budki argues emphatically that the cryptocurrency’s famous four-year market cycle is far from dead, projecting that the next major downturn will result in a severe correction of approximately 70%.

This prediction stands in sharp contrast to the prevailing bullish narrative, which often suggests that the entry of large financial players has effectively “sterilized” the extreme volatility seen in previous cycles. Budki’s contention rejects this view, asserting that the fundamental supply-and-demand mechanics—driven primarily by the quadrennial halving event—continue to dictate major market movements.

The Catalyst: Widespread Ignorance

Budki posits that the anticipated severity of the crash—a drawdown comparable to previous deep corrections—will be catalyzed not by institutional flight, but by a critical flaw in the broader market: a fundamental lack of economic understanding among speculators.
According to the analysis, many participants who purchase Bitcoin during expansionary phases do so without a deep grasp of its core economic properties, such as its fixed supply, decentralized governance, and deflationary issuance schedule. This surface-level engagement makes the market highly susceptible to panic selling.

Budki warns that this shallow comprehension will result in a market cascade when macroeconomic conditions deteriorate or the price signals a sustained retraction. He states:

“The lack of understanding about Bitcoin’s economic properties will result in a market dump at the first sign of trouble.”

A Predictable Cleansing

For Budki, the impending 70% drop is not a sign of failure but a predictable and essential ‘cleansing’ phase within the asset’s cyclical timeline. He suggests that speculative capital will quickly exit when gains become losses, leaving only those holders with strong conviction in Bitcoin’s long-term value proposition.

While institutional interest in spot exchange-traded funds (ETFs) and regulatory clarity may stabilize the base price floor over time, Budki’s forecast serves as a critical reminder that market cycles, driven by human psychology and supply shocks, remain a dominant force. Investors are cautioned that maturity does not necessarily equate to reduced volatility, but rather, a continued adherence to historically punishing drawdowns during retraction periods.

Topic:

Crypto,