As Bitcoin and Ethereum stumble through their worst year in recent memory, and the Crypto Fear & Greed Index tumbles into extreme fear, it may be time for crypto investors to return to first principles.
The Bitcoin long-term thesis hasn’t changed, and if you believe it’s inevitably going up, you’ll buy at any price.
As macro analyst James Lavish points out, the real story isn’t about price swings or fleeting sentiment. It’s the unyielding march of governments running deficits, central banks flooding the system with liquidity, and institutions quietly accumulating for the long haul. He commented:
“Seeing many bad takes on Bitcoin this morning, so perhaps we should return to first principles: Governments will keep overspending, global liquidity will keep expanding, and long-term, Bitcoin will reflect inflation that continues ad infinitum.”
In this environment, the Bitcoin long-term thesis is not tied to short-term moves but to foundational macro trends. We’re witnessing a parallel expansion of government debt and fiat debasement playing out in front of 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 2025, with government expenditures climbing to $7.01 trillion by year’s end.
President Trump has kept large-scale stimulus on the table, with renewed proposals for $2,000 direct checks to households illustrating why elevated spending pressures have become a structural fixture of American fiscal policy in 2025.
Global liquidity expanding
Liquidity is surging worldwide. The broad money supply hit an astounding $142 trillion by September 2025, a 446% increase since 2000.
Year-over-year growth reached 7%, with a 9.1% spike so far in 2025. China now boasts $47.1 trillion in circulating money, while the US has $22.2 trillion.
Central banks across developed markets continue to flood the financial system, stretching the global monetary base to new highs. Liquidity through the roof has become an enduring macro feature.
The recent downturn hasn’t discouraged institutional investors either. In fact, continuous investment shows rising conviction. Harvard, one of the world’s most closely watched endowments, tripled its Bitcoin ETF holdings in the third quarter of 2025, bringing its position to $443 million.
This marks a massive 257% increase, making IBIT Harvard’s top allocation ahead of traditional blue-chip assets. As volatility shakes the retail base, institutional adoption shows the broader trend. The Bitcoin long-term thesis for digital assets is still intact.
Bitcoin will reflect ‘inflation that continues ad infinitum’
Every expansionary policy, every deficit funding, and every round of stimulus underscores a simple reality: inflation is here to stay, and Bitcoin will reflect that.
Bitcoin’s value proposition strengthens with each tick higher in the global money supply. When the global money supply surges past $140 trillion, and the world’s biggest economies keep printing. Bitcoin isn’t just a speculative asset; it becomes a hedge against infinite debasement.
Faced with waves of negative commentary after every dip, Bitcoin’s fundamentals deserve focus. From outsized government deficits to ceaseless liquidity creation, the backdrop hasn’t changed. Governments will keep overspending.
Global liquidity will keep expanding. Bitcoin’s future remains anchored in inflation that continues ad infinitum. As The Wolf of All Streets’ Scott Melker states:
“If you believe that bitcoin price is going much higher over time, then it makes almost no difference whether you buy at 94k, 97k or 100k. You just buy.”
