We’ve all experienced it, doomscrolling on crypto Twitter, getting caught up by the electrifying murmurs of “Bitcoin to $90K! I know it’s hard and I know it’s exciting. The promise and the possibility of big returns, the excitement of being at the edge of something breakthrough – it’s intoxicating. Particularly when you’re used to seeing metrics like the Coinbase premium flashing green, indicating a major uptick in U.S. buying pressure. But hold on before we all begin trying to mentally spend our newfound, hypothetical wealth. I’m here to provide a good shot of historical perspective into all this euphoria.
Coinbase premium, that difference in price between Coinbase and other exchanges like Binance is absolutely a huge indicator to pay attention to. Historically, bull runs have seen Coinbase trading at a premium, a clear sign of strong U.S. investor interest, including some institutional players since Coinbase Pro merged into Coinbase Advanced. A high premium can signal that U.S. retail investors are piling in, and even that larger institutions and crypto "whales" are accumulating Bitcoin. It's tempting to see it as a rocket booster strapped to Bitcoin's price.
As someone who's been observing the crypto markets for years, I've learned that what goes up often comes down, sometimes with a vengeance. Bitcoin’s history is drenched with spectacular rises followed by just as spectacular rectifications. The 2017 global bull run happened right before the beginning of major regulatory actions. Bitcoin reached the moon at close to $20,000, only to fall hard and fast as gravity hit. A similar tale occurred in 2013, with a meteoric surge to $1,242 then a gut-wrenching plunge down to $600. These aren’t bugs, they’re features — Bitcoin’s DNA.
These hyperloop cycles almost always operate in the same, predictable stages. What we are experiencing today is an “Acceleration Phase.” Prices are going to moon, and the volatility is creating billionaires—on paper at least! After the early storm, the market hits a “Reversal Phase.” In such conditions, it often needs to digest its gains and typically makes a downward adjustment. This period is characterized by diminishing volatility and a gradual price drop. It was a stark difference to the free-for-all that preceded it.
Bitcoin’s halving events are designed to curtail supply and, in turn, drive up prices. As history has proven, such periods are usually followed by painful corrections. The 2016 halving was followed by a dip in price and the 2020 halving was no exception. Though the long-term trend post halvings has been positive, it’s almost never a linear path to the moon. Of course, there are always some bumps on the road.
Well, what does this all imply for the $90K Bitcoin dream? I don’t mean to say it can’t be done, rather, that I think it’s unrealistic in the near term. The Coinbase premium is good news, but don’t make it your only distraction. If you use it to make predictions about a coming massive price explosion, you’ll miss the cyclical nature of the market and Bitcoin’s inherent volatility.
Overall market sentiment is super important. The VIX, known as the “fear index,” is an excellent proxy for investor sentiment. Recent research has supported the view that there is an inverse correlation between the VIX and Bitcoin returns. Specifically, when fear is at a maximum, Bitcoin returns have been at their worst. On top of that, macroeconomic uncertainties, such as surprising inflation or deflation, can further exacerbate the influence of the VIX on the volatility of Bitcoin prices. Let's not forget external factors like the CBOE Gold Volatility Index (GVZ) and the CBOE SPX Far-term VIX Index (VIF), which can all influence Bitcoin's price relative to futures contracts.
Naturally, the more bullish predictions have their proponents. Others, like the website CryptoPredictions.com, forecast that Bitcoin will not drop below $83,975 in November 2025, even estimating a high of $88,549. Now, while I applaud such targets, I’m a little wary. I speak from a bird’s eye approach to the market. I look at historical trends, I look at investor sentiment and macroeconomic realities to drive my decisions.
Look, I’m not here to throw a wet blanket on everybody’s base celebrations. I’m no less optimistic about the values and principles buoying Bitcoin than any of you. I’m an advocate for responsible investing, which involves balancing excitement with a firm grounding in skepticism. Pursuing bad ideas based on exaggerated potential upside and ignoring downside risk just doesn’t work out well.
So, have fun, ride the wave, watch the Coinbase premium, but don’t let the frenzy get you too blinded to see. Bitcoin is one of the best long-term investment opportunities. Eternal sustainable growth is infinitely preferable to the short-term boom that inevitably leads to an ugly bust. Here’s to calm, collected, data-driven and evidence-based plodding toward progress, accompanied by more than a dash of pragmatically optimistic hopefulness. In this way, we can all experience the benefits of Bitcoin while avoiding being singed from false promises.
