Why Is Bitcoin Not Rallying?

This is Matthew Crats, Bitcoin University. Today, I want to answer the question: why is Bitcoin not rallying? This is a question that many of you have, especially in the wake of President Trump signing an executive order that brings the US strategic Bitcoin Reserve into being. Why is Bitcoin not pumping harder? In fact, why is Bitcoin actually selling off? It's not pumping at all.

Some necessary background in markets: we have this saying, "buy the rumor, sell the news." And this is that idea that markets will begin to price in things before they actually happen. Here's a typical example: the market figures out that Nvidia is going to have an extra good earnings report. Nvidia stock runs up until earnings day, and then it sells off on a really good earnings report, which confuses a lot of people who don't follow markets closely. It could be, in this case, that Nvidia's forward guidance—its forward revenue or earnings guidance—is weak. But often, it's just a sort of "buy the rumor, sell the news" kind of thing where the market does sell off. You're still higher than you were before, but it sells off on the good news.

Something similar, I think, happened with the spot Bitcoin ETF. So BlackRock filed for its spot ETF in mid-June of 2023. I made a video about it right then, saying that this was really big news—this is the real deal—and it may be yet another catalyst for a massive capital inflow into Bitcoin. There's a lot of skepticism around it at the time as well, which helped make this a very good entry point. This was June 16th, 2023, and if we take a look—look—that was down here when Bitcoin was trading at, uh, call it approximately $29,000 or $30,000. And then what happened, of course, is Bitcoin began to run up as this process took place and as the market began to price in the possibility that there actually would be a BlackRock Spot ETF, which was finally approved on January 10th, 2024, by the SEC. And then I believe it began trading the next day. If we take a look at it, it looks like it began trading on, uh, Thursday, January 11th, so it was the next day. And that's actually when, uh, it sold off. So it came out around $26,000 or wherever it was; it sold off for a couple of weeks, and Bitcoin itself sold off from that January 10th date. It sold off until about January 22nd and then went on to hit new, uh, new highs for that move.

Something similar happened with the inauguration of President Trump. He was sworn into office on January 20th of this year, 2025, and that really was a peak for Bitcoin. We had sort of a double top, but we can see here that approximately January 20th is where Bitcoin peaked, and it's been selling off ever since President Trump took office. Now, there can be a number of reasons for this, but first, let's go back and take a look at the executive order. This came out obviously last week, March 6th, 2025, and the question is: why is Bitcoin not pumping with last week's announcement of the Strategic Bitcoin Reserve?

As we've said, there are a few possible explanations. There's the one we've just been discussing—this idea of buying the rumor and selling the news. So Bitcoin is selling off on the actual news of the Strategic Bitcoin Reserve. Number two possibility: people don't believe that the US is actually going to buy additional Bitcoin for the Strategic Bitcoin Reserve. I think they're wrong; I'll explain why in a moment. But just at this point, if you're enjoying this video so far, I'd ask you to help to support this channel's educational mission: hit the Subscribe button; that does really help. Leave a like, leave a comment, question, suggestion for a future video; share this video with a friend or family member.

So, in this executive order, there's a passage that says this: "The Secretaries of Treasury and Commerce are authorized to develop budget-neutral strategies"—that means anything that doesn't increase the budget deficit—"budget-neutral strategies for acquiring additional Bitcoin, provided that those strategies impose no incremental costs on the American taxpayers." Now, who is the Secretary of Commerce in the US? It's Howard Lutnick, and we know for a fact that he owns hundreds and hundreds of millions of dollars of Bitcoin, as he's been saying in recent interviews. And he also says his holdings are going to be billions fairly shortly. So he's obviously very bullish on Bitcoin as well. So they are definitely incentivized to buy Bitcoin because of the incentives of Trump. Trump wants Bitcoin to hit new highs; Howard Lutnick owns a lot, supposedly; Trump owns a lot as well.

Now, there's a third possibility that I think is probably the real reason why Bitcoin's fiat price has been weak. It's not just that the market doesn't believe that the Strategic Bitcoin Reserve is going to buy more Bitcoin, or that it's a "buy the rumor, sell the news" sort of thing. I think there's a third possibility, and that is just all the macro uncertainty around Trump taking office. Everything is changing; there are questions about the Ukraine-Russia future and all the negotiations, the US relationships with traditional allies like Europe, Canada, Mexico; the tariffs obviously related to that; and then, of course, Doge cutting government spending. And what a lot of people forget is that government spending is a large component of GDP, unfortunately, because it's probably the worst part of GDP. But nevertheless, when the government cuts back on its spending, you can have a contraction in GDP, which is another way of saying a recession if it goes on long enough. Risk assets like stocks are also beginning to sell off on the uncertainty of it all. I think we've retraced all the Trump inauguration gains, and risk assets in general are falling. Now, Bitcoin has often been a leading indicator for macro weakness, which is one reason we may have been seeing it sell off the past few weeks.

There's also been a lot of talk about the latest forward-looking estimate from the Atlanta Fed's GDPNow numbers. This model is anticipating, for the first quarter of 2025, a contraction of 2.8%, but it looks like there—there's a lot of controversy around this. I haven't done a deep dive, but it looks like this number is actually being distorted by gold transfers to the US, which is messing up the trade deficit data component of this model. That in itself—the fact that a lot of gold is being repatriated—suggests, first of all, that Trump wants more gold coming back to the US, or maybe we need to get the gold back here to fill up Fort Knox before it gets audited. There are lots of different reasons for this, as well as obviously macro uncertainty. This may be distorting the GDP numbers, but on the other hand, the way risk assets and Bitcoin are behaving, perhaps we are entering a bit of a recession here. So that's another possibility. Bitcoin does seem to be sniffing out some macro weakness here, and it's often been a leading indicator for risk assets selling off, and it looks like stocks may be following along with Bitcoin selling off.

Now, people at this point will say, "But wait, I thought Bitcoin is money, and it's not supposed to do that or be correlated with tech stocks or whatever; what's going on here?" My answer would be: Honey Badger Don't Care. Bitcoin does what it wants. Also, the other thing is: Bitcoin is not yet a global reserve currency or global reserve asset. It's not yet a safe haven, as we spoke about in this video, which I'll link to in the description notes below. In this video, I conclude that while its technical construction makes it the ultimate safe haven asset—Bitcoin has zero counterparty risk and zero dilution risk—enough investors do not currently consider it to be a safe haven asset for it to currently function as one in a market selloff. Expect Bitcoin to still crash whenever there's a financial crisis or risk-off scenario. We are still early.

In conclusion, I would say: don't waste your time constantly checking the fiat price of Bitcoin. Try to be more low time preference—meaning more focused on the long term—rather than high time preference, which would be focusing on the short term. Also, be grateful for cheap sats; this is not going to last forever. Just set your DCA—your dollar-cost averaging—by a fixed amount every day or every week or every month without looking at the price and get on with your life. And really just instead focus on contributing more to the world, providing goods and services that the world wants, so that then you can get paid more fiat that you can convert to sats. This is a much better strategy rather than wasting your time with charts and predictions. Bitcoin ultimately has no top because fiat has no bottom. It's going to be a very volatile path, but we know fiat has no bottom. This is the chart of Bitcoin going up forever, and this is the chart of the US dollar purchasing power going down forever. And as Michael Saylor is famous for saying, "It's going up forever, Laura forever," and I think this is true as well, though the path there will obviously be stressful; it will be volatile, but I do think that, uh, Bitcoin will win this race. If you enjoyed this video, be sure to hit the Subscribe and like buttons. Hit the notification bell if you want to be notified when I publish my next video, and let me know your questions and comments in the comment section below. Thanks all for watching, and I'll see you in the next video.