According to Shyu, the downward trajectory of the market caught him completely off guard.
"Bitcoin fell from 120k last October to the low 60ks this summer. A 50% crash," he explained. "And nothing can prepare you for what a move like this does to you mentally, especially when you're leveraged... I was overleveraged. A simple small mistake with brutal consequences."
"Staking on thin ice"
According to Shyu, there might not be enough liquidity for everyone to get out.
"The pool you'd sell into today is far shallower than in 2021. We are skating on thin ice. And a lot of people still need to exit," Shyu warned, pointing to Mount Gox creditors receiving 35,000 coins and MicroStrategy sitting on 850,000 coins. "They quietly started selling just a little this year, hoping you will become their exit liquidity... I suspect currently there may not be enough liquidity for everyone to get out."
Shyu mentioned the eventual threat of quantum computing and the economic sustainability of network security as mining rewards diminish.
"Miners secure the network, and they have to get paid in two ways: either newly minted coins or your transaction fees," he explained. "And the problem is, well, 95% of all Bitcoin is already minted. The fee economy that they would depend on never showed up... as the fees fade, miners switch off, security drops, the network weakens again... and a slow death spiral could trigger. Nobody really knows what happens when the fees run dry."
A bottom signal?
Despite the exhaustive list of grievances and selling his entire stash, Shyu concluded his video by noting that he remains long-term bullish on the underlying technology.
"I'm still bullish long term... Bitcoin gets rediscovered every cycle, usually right after everyone agrees it's dead, which, come to think of it, makes this video a pretty solid bottom signal," Shyu concluded.
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