The future of Bitcoin: Will history repeat its crises

28 Temmuz 2025

Written by: Rania Gule, Senior Market Analyst at XS.com – MENA

Will history repeat its crises with encrypted digital tools?

We have entered a new phase in global financial history—one in which speculative behaviour in the crypto market has become deeply entangled with public policy and political influence, making it increasingly difficult to distinguish genuine innovation from disguised risk. This is especially evident after JPMorgan’s move to offer loans backed by clients’ cryptocurrency holdings. While this may appear to be a natural step toward integrating digital assets into the real economy, I view it as a chilling repetition of a historical pattern of regulatory complacency that often ends in financial crises of catastrophic proportions.

Put simply, Bitcoin is not an asset that can be reliably incorporated into a traditional financial framework. With volatility exceeding four times that of major indices and no intrinsic value or productive backing, it’s hard to justify Bitcoin as a tool for institutional lending. What’s worse is the cryptocurrency sector’s ongoing association with terrorist financing, cybercrime, and regulatory evasion—issues that political actors seem unwilling to address. Instead of firm regulatory intervention, lobbying groups have infiltrated the political landscape with overwhelming financial power, spending tens of millions of dollars to secure the passage of the so-called “Genius Act”—a piece of legislation that, while presented as regulatory, essentially dismantles yet another layer of financial safeguards in favour of a narrow circle of speculators.

In my view, history is unmistakably repeating itself. What happened in 2000 with the deregulation of over-the-counter derivatives—which culminated in the 2008 crisis through poorly regulated credit default swaps—seems to be unfolding once again, this time with stablecoins and Bitcoin. The critical difference now lies in the fragility and extreme volatility of the new financial instruments. When the U.S. Treasury Secretary projects that the stablecoin market will grow from $200 billion to $2 trillion, it does not signify healthy growth; it signals the inflation of a massive bubble under the guise of innovation, in an environment sorely lacking regulatory caution.

The greatest danger, however, is that this new legislation—like its predecessors—does not protect the broader economy but instead fosters a false sense of security. Claims that stablecoins are backed 1:1 by the U.S. dollar fail to address the core issue of volatility and offer no protection against systemic shocks. These are not traditional, predictable investment assets; they are high-beta tools that tend to magnify the movements of traditional markets. Bitcoin, for example, has a beta of 2.6 against the S&P 500, meaning any turbulence in traditional markets will hit crypto markets with multiplied force.

Given the current uncertainty in monetary policy and the risk of inflation flaring up again, any move by the Federal Reserve to sharply raise interest rates could trigger violent sell-offs across markets. This risk extends beyond individual investors to financial institutions that now hold crypto assets on their balance sheets. The concern is not just financial losses—it’s the potential freezing of credit markets and the onset of panic, eerily reminiscent of 2008, though this time clothed in digital form.

An even more structural threat lies in the potential impact on the U.S. Treasury bond market. In the event of a crisis, crypto companies might be forced to liquidate large volumes of Treasury holdings to meet redemptions. This would trigger a downward spiral in bond prices, raise government borrowing costs, and unleash another liquidity crisis—one in which the public may again be asked to bail out speculators operating in a barely regulated digital frontier.

At that point, we will be stepping into true political turbulence. One of the most dangerous consequences of such a crisis is the growing public distrust of economic and political institutions. Market liberalisation in the 1990s, followed by the 2008 meltdown, eroded the social contract between governments and the middle class, paving the way for political populism, including the rise of Donald Trump. Today, we are repeating the same mistake with bipartisan support for the “Genius Act,” at a time when public confidence in democracy itself is fraying.

It is no coincidence that Eric Trump is a keynote speaker at Bitcoin Asia 2025. The involvement of political figures in promoting cryptocurrencies is not merely a campaign strategy—it is a signal that high-risk financial instruments are being weaponised as tools for political mobilisation and anti-establishment narratives. History shows us that financial chaos is fertile ground for populism, and this dynamic now threatens not only the U.S. economy but the global financial system.

Cryptocurrencies have evolved beyond financial instruments; they are now political, cultural, and ideological tools. With rising institutional support in Asia and their integration into corporate strategies—as seen in Hong Kong and Japan—the risk of collapse is no longer confined to the U.S. It is global, and it threatens banks, corporations, governments, and even the very notion of trust in money.

From my perspective, there is still time to take corrective action. But what we need is not just stricter financial regulation—we need political will to prevent the fusion of immature innovation with unchecked capital influence. No currency, whether digital or fiat, can sustain an economy unless it is built on transparency and accountability. If we continue down this path, the question is no longer if a crisis will strike—but when.

Technical Analysis of Bitcoin ( BTCUSD ) Prices:

Bitcoin (BTCUSD) is currently experiencing a technically sensitive phase, marked by sharp volatility that reflects a tug-of-war between sellers and buyers around the key level of $119,556. The formation of a descending triangle pattern on the chart serves as a technical signal of mounting bearish pressure, fueled by weakening momentum and declining active liquidity. However, the price holding above the critical support zone between $115,000 and $116,000, coupled with the Stochastic indicator being in overbought territory, suggests a potential for a corrective upward rebound. If such a rebound materialises, it could target the price gap between $119,000 and $121,000 — a key resistance zone that may determine the next directional move in the market.

 

 

On the other hand, technical movements cannot be separated from the intensifying fundamental pressures. The recent wave of mass liquidations led by major institutions such as Galaxy Digital, along with renewed activity from dormant whales offloading large holdings, reflects a strong profit-taking phase—possibly driven by regulatory concerns or a shift in investor sentiment. Nevertheless, tactical entry by institutional investors at current levels suggests a longer-term conviction in the strength of crypto assets. The emergence of new projects like “Bitcoin Hyper” further indicates a redistribution of liquidity within the crypto ecosystem, highlighting a changing mood in investor priorities and strategic focus.

On the 4-hour chart, Bitcoin has shown a decisive rebound from the golden Fibonacci retracement zone between 0.5 and 0.618 (around $114,288), coinciding with a breakout above the temporary resistance at the 0.236 Fibonacci level (near $119,000). If price action holds above this level with a confirmed close, the next target lies near $124,000, reinforcing the potential for continued bullish momentum. However, the overbought readings on momentum indicators—particularly the Stochastic Oscillator—raise the likelihood of a short-term pullback unless the breakout is supported by strong volume. Overall, maintaining price action above $119,000 remains a key bullish signal, while a drop back below $116,000 could reignite the bearish scenario.

Support Levels: 116,000 – 114,288 – 111,000

Resistance Levels: 119,600 – 122,000 – 124,000

 

Zaid Barem / ymm