With Bitcoin and Ethereum experiencing their worst year in recent memory, and the Crypto Fear and Greed Index running into extreme fear, it may be time for crypto investors to go back to first principles.
If you believe that the long-term theory of Bitcoin has not changed and that it is inevitable that Bitcoin will rise, you will buy it at any price.
As macro analyst James Rabish points out, the real story isn’t about price movements or temporary sentiment. It is an inexorable march of governments running deficits, central banks flooding the system with liquidity, and financial institutions quietly hoarding money for the long term. He commented:
“After seeing so many negative views on Bitcoin this morning, maybe we should go back to first principles. Governments will continue to overspend, global liquidity will continue to expand, and in the long run, Bitcoin will reflect endless inflation.”
In this environment, Bitcoin’s long-term theory is tied to fundamental macro trends rather than short-term movements. We are witnessing government debt growth and fiat currency depreciation unfolding in parallel before our eyes. And that makes Bitcoin more relevant than ever.
Fiscal discipline remains a distant memory for most major economies. The United States reported a budget deficit of $1.775 trillion in fiscal year 2025, and government spending rose to $7.1 trillion by the end of the year.
President Trump has put a massive stimulus package on hold, and a new proposal to send $2,000 direct checks to households shows why increased spending pressures will become a structural fixture of U.S. fiscal policy in 2025.
Expanding global liquidity
Liquidity is rapidly increasing around the world. The broad money supply will reach a staggering $142 trillion by September 2025, an increase of 446% since 2000.
The year-on-year growth rate reached 7%, with a jump of 9.1% by 2025. Currently, China has $47.1 trillion in currency in circulation, compared to the United States’ $22.2 trillion.
Central banks in developed markets continue to fund the financial system, expanding the global monetary base to new highs. Unlimited liquidity has become an enduring feature of macro.
Even with the recent economic downturn, institutional investors’ appetite has not diminished. In fact, as you invest consistently, you’ll find your confidence grows. Harvard University, one of the world’s most-watched endowments, tripled its holdings in a Bitcoin ETF in the third quarter of 2025, bringing its position to $443 million.
This marks a significant increase of 257%, placing IBIT Harvard’s allocation ahead of traditional blue-chip assets. Institutional adoption points to a broader trend as volatility shakes retail infrastructure. Bitcoin’s long-term theory of digital assets is still intact.
Bitcoin reflects “infinite inflation”
Every expansionary policy, every budget deficit, every stimulus package highlights the simple reality that inflation is here to stay, and Bitcoin will reflect that.
Bitcoin’s value proposition strengthens as the world’s money supply increases. When the world’s money supply soars past $140 trillion and the world’s largest economies continue to print. Bitcoin is not just a speculative asset. It is a precaution against endless deterioration.
Bitcoin’s fundamentals are worth paying attention to, despite the flood of negative comments that follow each drop. The backdrop remains the same, from huge government deficits to constant liquidity creation. The government will continue to overspend.
Global liquidity will continue to expand. Bitcoin’s future remains locked in endless inflation. Scott Melker of The Wolf of All Street says:
“If you believe the price of Bitcoin will rise significantly over time, it makes little difference whether you buy at 94,000, 97,000, or 100,000. Just buy.”