The Distress Is Real

The sentiment in crypto right now is, frankly, brutal.

The S&P 500 is flirting with all-time highs. The Nasdaq has been on a tear. Gold just broke through $4,300. Tech stocks are rallying. By every traditional measure, we’re in a risk-on environment. Money is flowing into risk assets. Investor appetite is healthy.

And Bitcoin? Bitcoin is doing… nothing.

Sideways. Consolidating. Grinding. Boring. Choose your own description, none of them hide the frustration that’s permeating the community. Twitter is filled with variations of the same anxious question: “Why isn’t BTC pumping with everything else?”

The cognitive dissonance is palpable. We have Bitcoin ETFs that launched successfully and see inflows every month. Institutional adoption is accelerating. The Genuis Act passed and Clairty is coming soon. There’s no regulatory crackdown. No major hack. No fundamental narrative breakdown. Everything that was supposed to matter… happened.

Yet here we are, watching other assets rally while Bitcoin treads water.

As someone who has become increasingly connected to the crypto community over the past few years, I’ve had a unique vantage point. I’ve watched both worlds, the traditional fiat financial system and the crypto ecosystem, and I’ve begun to see a pattern that reminds me of the world I grew up in. The similarities are striking. So are the differences. But sometimes, the similarities reveal themselves in unexpected ways.

What if everyone is looking at this wrong?

What if Bitcoin isn’t broken, what if it’s finally having its Tradfi version of an IPO?

A Bridge Between Two Worlds

My journey into crypto has been illuminating precisely because I haven’t abandoned my understanding of traditional markets. I’ve brought that lens with me. And increasingly, I’m seeing that Bitcoin, despite its revolutionary origins and decentralized nature, follows economic patterns that are as old as capitalism itself.

Early-stage investors take enormous risks. If the investment succeeds, they deserve enormous rewards. But eventually, and this is crucial, they need to realize those gains. They need liquidity. They need an exit. They need to diversify.

In the traditional world, this moment is called an IPO. It’s the moment when early believers cash out, when founders become wealthy, when venture capitalists return money to their limited partners. It’s not a moment of failure, it’s a moment of success. The company doesn’t die during its IPO. It transitions. It matures. Ownership becomes distributed.

Bitcoin never had a traditional IPO because it never had a company. But the economic forces don’t disappear just because the structure is different. They simply manifest differently.

The Divergence That Tells The Story

Let’s talk about what we’re actually seeing in the market right now.

Bitcoin moves with tech stocks. It is correlated to liquidity and “risk appetite.” For years, you could predict Bitcoin’s direction by watching the Nasdaq. That correlation has broken down recently and since December of 2024. Completely.

This confuses people. It confuses algorithmic traders. It confuses momentum investors. When risk assets rally and Bitcoin doesn’t participate, the narrative becomes “something is wrong with Bitcoin.”

But here’s what I’ve learned from watching traditional markets: this is exactly what happens during IPO distribution periods.

When a company goes public and early investors begin to sell their positions, the stock often consolidates, even during broader market rallies. Why? Because there’s a specific dynamic at play. Early investors aren’t panic selling. They’re methodically distributing their positions. They’re being careful. They don’t want to crater the price. They’re patient. They’ve waited years for this moment. They can wait a few more months to do it right.

Meanwhile, new investors are stepping in, but cautiously. They’re not chasing. They’re accumulating on dips. They’re waiting for the distribution to complete before getting aggressive.

The result? A sideways grind that drives everyone crazy. The fundamentals are fine. The broader market is rallying. But the stock just… sits there. Don’t believe me, go look at Circle or Coreweave. They had this early surge post the IPO pricing but since then, consolidation.

Sound familiar?

If this were a macro-driven weakness, Bitcoin would be falling with risk assets, not diverging from them. If this were a true “crypto winter,” we’d see panic, capitulation, and correlated selling across the entire space. Instead, we’re seeing something much more specific: methodical, patient selling into stable bids.

The kind of selling that says “I’m done, time to move on,” not “I’m scared.”

The Evidence Keeps Mounting

Then came the confirmation I didn’t expect but probably should have.

On a recent Galaxy Digital earnings call, Mike Novogratz announced Galaxy had sold $9 billion worth of Bitcoin for one customer. $9 billion. Think about that number for a moment. This isn’t retail panic. This isn’t some trader getting shaken out. This is one of the OG players in the space methodically exiting a massive position.

But they’re taking profits. They’re realizing gains. They’re doing exactly what early-stage investors are supposed to do when an asset matures and liquidity finally exists to support large exits.

And here’s the thing: that one OG isn’t alone.

The on-chain data tells a clear story if you know how to read it. Old coins...