It's been a challenging period for Bitcoin holders. While the cryptocurrency was once hailed as **digital gold**, recent performance has raised questions about its stability and long-term value proposition.

### Bitcoin's Recent Performance vs. Gold

Bitcoin has seen significant volatility, with a **16% drop over six months** recently, though it has recovered slightly to an 11% decline. In contrast, **gold has surged 60% over the past year** and 24% in the last six months, maintaining its appeal as a traditional safe-haven asset.

### Potential Factors Behind Bitcoin's Struggles

Several factors may be contributing to Bitcoin's underperformance:

- **Profit-taking** by investors after previous gains
- **Hawkish US interest rate talk**, which typically pressures non-yielding assets like Bitcoin
- **Energy consumption concerns** as mining costs converge with Bitcoin's price
- **Leverage and debt issues** among major holders like Strategy Inc.

### The Strategy Inc. Conundrum

Michael Saylor's Strategy Inc. holds **3.1% of all Bitcoin** and has been a vocal proponent of never selling. However, falling Bitcoin prices and discounted company shares may force selling to cover debt interest, challenging the **HODL narrative** and raising questions about Bitcoin's role as a store of value.

### Broader Market Concerns

- **Quantum computing threats** could potentially break Bitcoin's encryption, undermining its security foundation
- **Unwinding of the yen carry trade** as Japanese interest rates rise, potentially impacting leveraged crypto positions
- **High leverage on exchanges** like Binance, which allows up to **50x leverage**, increasing systemic risk

### The Fundamental Challenge

Bitcoin faces the core issue of being an **unproductive asset** with no cash flow, making traditional valuation methods impossible. While narratives shift from "digital gold" to institutional adoption, the lack of fundamental anchors creates uncertainty.

### Market Implications

The current situation highlights Bitcoin's vulnerability to:
- **Leverage unwinding** during market stress
- **Competition from traditional assets** like gold
- **Technological threats** to its underlying structure
- **Macroeconomic shifts** in global interest rates

### Looking Ahead

Whether Bitcoin ultimately becomes **digital gold** or follows the path of **digital tulips** remains uncertain. The current volatility underscores the difficulty in establishing it as a reliable store of value amid changing market conditions and emerging challenges.

It’s been a tough few weeks for holders of Bitcoin. Not long ago you could, with a little effort, make a reasonable case that it was a bit like gold. Digital gold.

Is Bitcoin Losing Its Shine? The Digital Gold vs. Digital Tulip Debate Heats Up

If you have $500 to invest in cryptocurrencies, it can be overwhelming to know where to begin. Before diving into specific coins, consider how these high-risk assets fit into your overall portfolio. The key is to allocate only a small percentage to crypto, balancing it with less-risky assets like stocks and bonds.

Once you've established your strategy, focus on cryptocurrencies that are relatively established and offer real-world utility—these are more likely to survive and thrive in the long term.

Here are three top picks to consider for your portfolio.

## 1. Bitcoin

When I first started investing in cryptocurrencies, I was often frustrated by lists that always started with **Bitcoin**. As the biggest and best-known crypto, it seemed too obvious, and I was drawn to under-the-radar projects with moon-shot potential. However, over time, I've witnessed prices plummet and many of those lesser-known projects collapse entirely.

Historical data shows that **Bitcoin** is one of the best choices for long-term investors. While it remains volatile, it has consistently erased losses and reached new highs. If you're going to hold just one cryptocurrency, make it **Bitcoin** or **Ethereum**.

Bitcoin has the potential to serve as the backbone of the on-chain economy. It's already attracting increased institutional and corporate investment, with some governments adding it to their reserves. Additionally, Bitcoin may emerge as a form of **digital gold**—a safe asset that could hedge against inflation. Though it hasn't fully proven itself in this role yet, its continued maturation could change that.

## 2. Ethereum

**Ethereum** is the second-largest cryptocurrency by market capitalization. It pioneered **smart contracts**, which make cryptocurrencies programmable. These contracts allow developers to build other cryptocurrencies, stablecoins, non-fungible tokens (NFTs), and a wide range of decentralized applications on Ethereum's ecosystem.

Critics often point to Ethereum's high fees and relatively slow transaction times. Despite this, Ethereum maintains a dominant position in **decentralized finance (DeFi)**. According to DefiLlama, nearly 60%—over $70 billion—of funds in on-chain applications are on the Ethereum network. While some are turning to faster, lower-cost alternatives like **Solana**, reliability remains crucial when handling people's money.

This year, blockchain technology has taken significant steps toward mainstream integration, particularly in **real-world asset tokenization**, such as stablecoins. If companies use public blockchains for these projects, Ethereum and Solana are both strong contenders. This could drive growth in the coming decades.

With a new legal framework for **stablecoins** in the U.S., Citi predicts issuance could grow from about $280 billion today to as high as $4 trillion by 2030. Broader tokenization of assets like equities, bonds, and real estate is also expected to soar in 2026 and beyond.

## 3. Chainlink

If you're looking for a lesser-known cryptocurrency with high potential, **Chainlink** should be on your radar. Chainlink is an **oracle crypto**, feeding data from other blockchains and the real world into decentralized workflows. As I mentioned earlier, smart contracts are tiny pieces of decentralized blockchain code that require accurate data to function.

For example, imagine a farmer using a decentralized insurance contract that pays out under specific weather conditions damaging crops. The contract relies on an oracle to trigger the payment when those conditions are met. Similarly, if tokenized versions of stocks are traded, a reliable on-chain source of pricing data is essential.

Chainlink has fallen 40% over the past year, but it has secured partnerships with major financial institutions, blockchains, and even the U.S. government. This cryptocurrency could underpin many blockchain technology applications, giving it strong growth potential.

## Consider Crypto ETFs

Many new crypto investors are hesitant because they think they need to open an account with a cryptocurrency exchange and find a safe storage solution. **Crypto ETFs** eliminate this worry, as you can buy them through your brokerage account. The fund handles custody, and these ETFs are protected against brokerage failure by SIPC insurance.

**Spot Bitcoin ETFs** launched in early 2024, followed by Ethereum ETFs that summer. Since then, they've attracted over $100 billion in funds. The first Chainlink ETF has just launched, meaning you can access all these cryptocurrencies in ETF form. They are also available on top cryptocurrency exchanges if you prefer that route.

These three coins could form the backbone of your crypto portfolio.

Unlock Your Crypto Future: 3 Top Cryptocurrencies to Hold for Decades with Just $500

The average analyst price target for **Strategy (MSTR)** implies a staggering **184% upside** from Friday's close, making it the most ambitious target among large-cap stocks on Wall Street. This either positions MSTR as the stock most loved by analysts or the one they've been most wrong about—or perhaps both.

Other cryptocurrency plays like **IREN** and **Circle Internet Group (CRCL)** also rank among the top 10 stocks with the highest implied upside, while **Oracle (ORCL)** stands out as the largest company on the list.

Analysts currently have an average price target of **508.43**, down from a peak of 564.23 in August but still far above Friday's closing price of 178.99. This average includes over a dozen analyst targets, though some are restricted from view.

### Implied Upside From Average Analyst Price Target
| Symbol | Target | Price | Upside |
|--------|--------|-------|--------|
| MSTR   | 508    | 179   | 184%   |
| IREN   | 87     | 45    | 94%    |
| SMMT   | 34     | 18    | 85%    |
| NBIS   | 163    | 98    | 66%    |
| BMRN   | 89     | 53    | 66%    |
| CRCL   | 142    | 86    | 65%    |
| CHTR   | 332    | 205   | 62%    |
| FIG    | 61     | 38    | 60%    |
| ORCL   | 341    | 218   | 57%    |
| CELH   | 66     | 42    | 57%    |
*Source: FactSet*

### How Did Analysts Get Strategy So Wrong?
Overly optimistic projections for **bitcoin prices** and the belief that Strategy should be valued significantly higher than its bitcoin holdings likely explain these steep targets. While this is just a snapshot in time—and a resurgent bitcoin price could change the narrative—Wall Street was caught off-guard by Strategy's **61% slide** from its 52-week high, with analysts yet to broadly reassess its prospects.

This misjudgment raises questions, especially given Strategy's prolific issuance of common stock, convertible debt, and preferred stock. Over 13 months through November, the company raised **$40 billion** for its bitcoin buying binge, generating fees of up to 2% (around $500 million or more) for firms whose analysts cover it.

The only analyst with a hold rating is Gus Gala of Monness, Crespi, Hardt—a firm that hasn't provided services for Strategy's massive sales. Gala upgraded MSTR to a hold last month, citing diminished downside, but had previously rated it a sell even with a $100,000 bitcoin price assumption.

While firms have rules to guard against conflicts of interest, Strategy's continuous bitcoin buying may have tested these rules. For example, securities firms must observe a "quiet period" around share offerings, but Strategy uses at-the-market offerings that allow weekly sales without such restrictions.

### Can $1 In Bitcoin Be Worth More Than $1?
The stubbornly high average price target for MSTR comes as Strategy's valuation premium to its bitcoin holdings shrinks but persists. The company's enterprise value is **1.15 times** the value of its bitcoin reserve (down from above 2.0 earlier this year), a metric it calls mNAV (multiple of net asset value).

Short-seller James Chanos, who closed his successful bet against MSTR, stated his thesis simply: "Don't pay more than $1 for something worth $1." His bet wasn't against bitcoin but against Strategy's premium disappearing.

If MSTR stock fell to around 149 with bitcoin steady near $90,000, Strategy's enterprise-to-bitcoin ratio would hit 1.0. Alternatively, the premium would vanish if bitcoin rose to $104,000 while MSTR held around 179.

Initially, investors were willing to pay $2 or $3 for $1 worth of bitcoin through Strategy (formerly MicroStrategy), as it provided institutions a bitcoin investment route without holding the cryptocurrency. This role faded after bitcoin ETFs launched, but Chairman Michael Saylor remained seen as "captain of Team Bitcoin," with investors offering 0% loans to accumulate bitcoin, supporting its price and popularizing it as an asset class.

### MSTR Stock Vs. Bitcoin ETF
Strategy is now in a different position. Instead of 0% convertible bonds, its go-to funding source is preferred-stock issue STRC with a **10.75% interest rate**. This means future bitcoin additions will lose money for shareholders if bitcoin rises less than 11% annually.

Additionally, Strategy faces **$800 million a year** in interest and dividend payments, equal to 1.4% of its bitcoin holdings at current prices.

Given these costs, it's hard to see how investors are better off with MSTR vs. a bitcoin ETF, which carries fees as low as **0.15%**. For example, $100.15 in an ETF gets $100 in bitcoin, while $101.4 of MSTR stock currently gets about $87 in bitcoin, considering interest costs and the 1.15 mNAV.

Strategy recently announced a **$1.4 billion U.S. dollar reserve fund** to address worries about bitcoin sales, providing 21 months of dividend coverage. However, this might not prevent large bitcoin sales, as MSTR's sell-off has left **$6.8 billion of its convertible debt** out of the money (below the redemption price).

Strategy's stock faces three key problems:
1. It may keep losing ground to bitcoin until its premium disappears.
2. Potential disqualification by index funds like MSCI USA due to its crypto holding business model could lead passive funds to sell.
3. Under these scenarios, MSTR may fall further below the conversion price for its convertible debt, increasing the risk of a cash crunch by fall 2027 that could force bitcoin unloading.

MSTR stock has the most ambitious average price target of any large-cap stock on Wall Street. Does the bitcoin holding company deserve it?

Wall Street's Biggest Mistake? Why MSTR's 184% Upside Target Is a Bitcoin Bet Gone Wrong

**BlackRock's flagship Bitcoin ETF is experiencing its heaviest redemption cycle since launch**, with more than **$2.7 billion pulled over the past five weeks** as institutional flows continue to unwind into year-end.

### The Outflow Streak

The iShares Bitcoin Trust (IBIT), which ballooned into a **$71 billion vehicle** during Bitcoin's run to record highs, has now logged **five straight weeks of outflows** through Nov. 28, according to Bloomberg data.

Another **$113 million exited on Thursday**, putting the fund on track for a **sixth week in the red**—its longest streak since debuting in early 2024.

![(SoSoValue)](https://www.coindesk.com/_next/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2Fs3y3vcno%2Fproduction%2Fcc4e9e16e4c7d8f8553ec0292b35a72f652cd3b2-3250x1294.png%3Fauto%3Dformat&w=3840&q=75)

### Broader Market Context

The withdrawals mirror the broader shift in crypto positioning since **October's liquidation shock**, when leveraged wipeouts erased over a trillion dollars in digital-asset market value and pushed Bitcoin into a confirmed bear phase.

IBIT was the **largest single conduit for institutional inflows earlier this year**, but that bid has reversed as fund managers cut exposure ahead of bonus season and macro uncertainty picks up.

### Current Market Dynamics

Bitcoin has recovered to the **low $92,000s this week**, yet flows remain negative. Analysts say that matters more for directionality than short-term price action. Glassnode noted that the outflow cycle marks a **clear break from the steady accumulation regime** that underpinned BTC's climb into October, describing the current trend as a **cooling in fresh capital allocation** rather than a structural exit.

Bitcoin remains down about **27% from its all-time high** set in early October, and IBIT's flow data is increasingly viewed as a **proxy for broader U.S. demand**.

Another $113 million exited on Thursday, putting the fund on track for a sixth week in the red, its longest streak since debuting in early 2024.

BlackRock's Bitcoin ETF Faces Record Outflows: Is Institutional Demand Cooling?

**Mayor-elect Zohran Mamdani** is turning to an unlikely coalition of **crypto billionaires**, Hollywood celebrities, and wealthy heirs to fund his transition into office. With a goal of raising **$4 million**—twice what his predecessors collected—Mamdani is blending grassroots support with high-dollar donors in a strategy that highlights the growing influence of cryptocurrency in politics.

![Mayor-elect Zohran Mamdani at a news conference](https://static01.nyt.com/images/2025/12/04/multimedia/00met-mamdani-transition-01-fwtg/00met-mamdani-transition-01-fwtg-articleLarge.jpg?quality=75&auto=webp&disable=upscale)
*Mayor-elect Zohran Mamdani has set a goal of raising $4 million for his transition, twice as much as his two most recent predecessors raised for theirs. Credit: Heather Khalifa for The New York Times*

### The Crypto Connection
This week, Mamdani attended a sold-out fundraiser in the West Village hosted by a **cryptocurrency billionaire**, a Qualcomm heir, and a son of George Soros. The next morning, he was in TriBeCa for another event co-hosted by a Hunt oil fortune heiress and a **major cryptocurrency advocate**.

### Hollywood Power Players
Next week, Mamdani will appear at a star-studded reception on the Lower East Side featuring **Hollywood royalty** including Julianne Moore, Mark Ruffalo, Ramy Youssef, Tituss Burgess, and director Mira Nair (who happens to be Mamdani's mother). The cheapest ticket costs **$1,000**, demonstrating the premium access being offered to supporters.

### What This Means for Crypto
This fundraising strategy represents a significant moment for **cryptocurrency's political influence**. As crypto billionaires and advocates open their wallets for political candidates, it signals growing acceptance and integration of digital assets into mainstream power structures. The fact that Mamdani is targeting both grassroots donors and wealthy crypto backers shows how cryptocurrency is becoming a **bridge between different donor classes** in modern politics.

Mayor-elect Zohran Mamdani has turned to crypto kings, movie stars and an oil heir, among others, to help reach his $4 million goal to fund his transition and Jan. 1 inauguration.

Crypto Billionaires and Hollywood Stars Fuel NYC Mayor-Elect's $4M Transition Fund

The Federal Reserve's preferred inflation gauge, **core PCE**, is expected to show a rise in September, moving away from the Fed's 2% target. According to FactSet, it likely increased by **2.9% year-on-year**, marking 55 consecutive months above the target. This sticky inflation could bolster Fed hawks advocating for slower rate cuts.

Despite this, volatility indices indicate no major turbulence. Volmex's annualized one-day bitcoin implied volatility index (BVIV) hovers around **36%**, suggesting a 24-hour expected price swing of **1.88%**, which is within normal ranges. Low volatility expectations are likely due to anticipated Fed rate cuts next week, with CME's FedWatch tool pricing a **25 basis point cut on Dec. 10** as a done deal.

![BTC's price chart. (TradingView)](https://www.coindesk.com/_next/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2Fs3y3vcno%2Fproduction%2F54f58f7e11aad771b401a3b0d243f2853c40752a-2854x1404.png%3Fauto%3Dformat&w=3840&q=75)

A softer-than-expected inflation report could push the **10-year Treasury yield below 4%**, potentially helping Bitcoin break out of its current trading range of **$92,000-$94,000**. Iliya Kalchev, a Nexo Dispatch analyst, noted that a softer labor read and contained PCE would reinforce the easing narrative, supporting crypto's rebound, while any upside surprise might keep markets range-bound until the Fed clarifies its path.

However, analysts at ING have warned that any decline in the benchmark yield could be short-lived.

The data could similarly impact alternative cryptocurrencies. Ether's one-day implied volatility index is at **57.23%**, implying a **3%** price swing, slightly higher than Bitcoin. Solana's volatility index signals a **3.86%** move, with XRP at **4.3%**.

A softer inflation report could lower the 10-year Treasury yield and support cryptocurrencies.

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