Original Title: The Light at the End of the Turmoil II
Author: Jordi Visser, Wall Street expert, author of Bitcoin's silent IPO; Translated by: Jinse Finance
On April 8th, when the panic triggered by tariffs and "Liberation Day" reached its peak, I published an article on Substack titled "The Light at the End of the Turmoil I." At that time, the S&P 500 had fallen by 20%, economists were warning of a recession, and the market was dominated by panic. In the article, I proposed that this artificially triggered sell-off would become an excellent buying opportunity—the core driver being AI, and six months later we would find that compared to the rapid development of AI, the initial panic was completely unfounded.
Ultimately, things turned out exactly as I predicted. The market bottomed out and rebounded, risk assets rebounded sharply, the AI narrative accelerated, and people gradually adapted to the new market environment.
Then in November, when the Bitcoin community was in despair due to the price consolidation and underperformance compared to the stock market, I wrote an article titled "Bitcoin's Silent IPO." I argued that Bitcoin's tedious consolidation while other assets were rising was not a sign of weakness, but rather a necessary distribution phase. Early whales finally had the opportunity to release liquidity, and with strong institutional buying from ETFs and corporate treasuries, they methodically reduced their holdings and exited the market. This is similar to the expiration of the lock-up period in a traditional IPO—an uncomfortable and patience-testing process, but crucial for the long-term health of the market. Now, this consolidation pattern has been broken. As the stock market (especially speculative AI concept stocks heavily favored by retail investors) finally began to correct, the distribution of shares triggered by the silent IPO further exacerbated Bitcoin's decline. I also emphasized this point in my weekly video last weekend. This drop has turned Bitcoin's year-to-date gains into a slight negative. The "cognitive dissonance" that previously frustrated the cryptocurrency community has now evolved into genuine bearish sentiment and doubt. The optimism of "Liberation Day" seems like a distant memory, discussions about the "end of the four-year cycle" are intensifying, and the argument that "Bitcoin has lost its upward potential" is echoing on the X platform (formerly Twitter). Even those who insisted "this time is different" are beginning to concede defeat. This drop has caused the CoinMarketCap Crypto Fear & Greed Index to fall to 15, matching the lows before and after "Liberation Day." All hope seems to have been shattered. Therefore, it's time to release "Dawn at the End of Turmoil II." Consistent with the core viewpoint of "Liberation Day," I still believe that the movements of all assets are driven by the development of AI—in the coming years, all investors will finally realize that they missed a narrative, and the purest AI narrative is embodied in Bitcoin. The Bitcoin white paper and Raina Madhavan Ng's 2009 research paper (the first to demonstrate that GPUs could speed up deep learning by more than 70 times, thus ushering in the era of modern GPU-driven machine learning) were published around the same time. Both are examples of exponential innovation, and they complement each other and are indispensable. Exponential innovation reduces the need for office work and even, to some extent, reduces overall employment demand. It exacerbates wealth inequality, forces governments worldwide to maintain fiscal deficits, and drives up financial asset prices—essentially a form of "universal basic income" (UBI). Today's UBI doesn't come from government checks, but from "universal beta gains": your wealth grows naturally because the system has no other choice. For those without assets, government transfers become another form of UBI. This creates what we often call a "K-shaped economy," where most people are angry about the increased burden of living—worried about unemployment, bearing the pressure of reduced corporate hiring, and facing inflation caused by government "universal basic income" policies. Bitcoin will benefit from this upward spiral: it will remain correlated with risk assets until artificial intelligence begins to reshape capitalism and public markets. The combination of stablecoins and AI agents will increase the velocity of money and reduce leverage requirements; while asset tokenization will enable 24/7 free trading of illiquid, concentrated assets such as real estate, private debt, private equity, and venture capital, thereby reducing the leverage required to support these asset prices. As AI develops, its deflationary effects will gradually emerge. By 2026, AI-driven drug development, autonomous taxis, and AI agents will drive up corporate profit margins, while competition arising from the commoditization of intelligence will accelerate, further driving up related asset prices. The most interesting point right now is that while people were previously complaining that Bitcoin hadn't kept pace with the stock market's rise, it has finally shown the performance it deserves. As the stock market (especially the overvalued retail AI concept stocks) corrected, Bitcoin fell in tandem. The "divergent trend" that puzzled everyone during the "silent IPO" period has ended. Bitcoin has returned to its nature as a risk asset, and its price movement is closely related to growth expectations and the liquidity environment. In my view, this will accumulate the necessary purchasing power and momentum for a new round of upward trend. This means that when I look ahead to the market landscape in 2026, I see "the dawn after the turmoil" once again. Just as the tariff panic in April created buying opportunities for those who could see through the fear, this pullback triggered by the synchronous weakening of Bitcoin and overall risk assets is paving the way for the next wave of significant gains. Why is the synchronous fluctuation of Bitcoin and the stock market actually a bullish signal? A long-standing misconception is that Bitcoin should operate independently of traditional risk assets. The mainstream narrative holds that Bitcoin is digital gold, a tool for hedging against the risks of the existing system, and has nothing to do with the stock market. Therefore, the idea that if Bitcoin falls along with the stock market means "something's wrong" is incorrect. Bitcoin is a risky asset. I clearly stated this in my Substack article, "Yes, Virginia, Bitcoin is a Risky Asset." While Bitcoin does possess store-of-value properties and is decentralized, from a market psychology and capital flow perspective, its performance is more akin to a high-beta risky asset. ETF buyers include Bitcoin alongside stocks in their asset allocations, and when they diversify to mitigate risk, Bitcoin and stocks are reduced in tandem. Retail traders use the same funds to trade both cryptocurrencies and stocks simultaneously. Even investors concerned about fiat currency devaluation are more likely to increase their Bitcoin holdings during periods of strong economic growth and ample cash flow. Therefore, when the Nasdaq falls, Bitcoin follows suit; when AI-related stocks falter, Bitcoin is also impacted. This is not a flaw, but a characteristic—given Bitcoin's holder structure, this behavior is perfectly logical. This is a bullish signal because if Bitcoin fluctuates in tandem with risk assets, then Bitcoin's prospects are closely linked to those of risk assets. This means that to understand Bitcoin's future, we first need to understand the direction of the stock market. Next, I will explain why I am extremely optimistic about the outlook for risk assets in 2026. 2026 Market Landscape: A Triple Resonance of Fiscal, Monetary, and AI Markets always rise amidst anxiety. Current concerns primarily stem from AI bubble fears, recessionary expectations, and cryptocurrency pessimism, but the market outlook for 2026 is highly attractive. Fiscal support continues to be strong. The Infrastructure Act, the Chip and Science Act, and the Inflation Reduction Act are not empty political slogans, but multi-trillion-dollar spending plans that are creating real economic activity and sustaining the fiscal deficit. The "Big Beautiful Act" is a prelude to the midterm elections, data centers are being built at an unprecedented pace, semiconductor factories are springing up, and power infrastructure is being upgraded. The Federal Reserve has room for easing. Inflation is currently under control. Wages, housing prices, and oil prices are all under pressure this year, so even as the impact of tariffs gradually emerges, combined with the weak labor market, inflation will remain stable. Artificial intelligence is both a deflationary force and will exacerbate the weakness in the labor market. A breakthrough in AI is imminent. The pace of development in artificial intelligence over the past year has been astonishing. In the near future, we will witness tangible, world-changing breakthroughs that will attract mainstream attention: AI-driven drug discovery: The first drugs discovered by AI are nearing clinical trials. Once positive news emerges, its impact on the healthcare industry and economic productivity will be profound. As of November, pharmaceutical stocks had their best relative return month in 30 years, with every pharmaceutical company vying to integrate AI into its R&D process, and billions of dollars flowing into the AI healthcare field. Autonomous vehicles: After years of predictions that it would be a reality in five years, we have finally reached a turning point. Waymo is expanding its operations, Tesla's Full Self-Driving (FSD) technology continues to iterate, and Chinese companies are deploying autonomous taxis on a large scale. In 2026, when autonomous vehicles are widespread in major cities, a speculative frenzy surrounding humanoid robots will erupt.
AI Agents and Productivity Boost: AI agents capable of autonomously performing complex tasks will become widespread across various sectors—enterprise software, customer service, creative industries, etc. This will bring significant productivity gains to the entire economy, driving up corporate profit margins. AI makes all businesses more efficient, more productive, and more profitable.
Manufacturing is expanding. The construction boom in AI infrastructure is driving the recovery of US manufacturing. After years of contraction, manufacturing has shown signs of recovery. I believe that, driven by the aforementioned multiple catalysts, the Purchasing Managers' Index (PMI) will rebound in 2026. Historically, cryptocurrencies (especially altcoins) tend to perform exceptionally well when the PMI rises.
Short sellers will cry out, "The AI bubble is about to burst!" Perhaps they are. But the duration and magnitude of bubbles often exceed everyone's expectations. The dot-com bubble didn't burst when valuations first showed signs of being outrageous in 1997, but rather didn't peak until March 2000, three years later.
From the end of 1994 to the end of 1999, the Nasdaq 100 index (QQQ) rose by 800%, while in the past five years, QQQ's increase has been less than 100%. Compared to the dot-com bubble, the current AI craze is hardly a bubble. Even if we are in an AI bubble, it is only in the early to mid-stage—the mainstream population has not yet fully entered the fray, and your relatives won't be asking about AI stocks at Thanksgiving dinners. This scenario usually occurs in the later stages of a bubble, and I believe cryptocurrencies will follow a similar pattern. Furthermore, a bubble bursting requires a catalyst, usually the Federal Reserve aggressively raising interest rates during a period of economic weakness. However, the Federal Reserve has already completed its current rate hike cycle and may adopt a more accommodative policy in 2026 rather than starting a new rate hike cycle. Currently, there is no typical catalyst to trigger a bubble burst.
Bitcoin's Core Catalysts in 2026
If risk assets perform strongly in 2026, Bitcoin, as a high-beta risk asset, should significantly outperform. The following Bitcoin-specific catalysts make its upward trend even more attractive.
The Clarity Act. For years, regulatory uncertainty has been a drag on the cryptocurrency market. The Cryptocurrency Clarity Act, expected to be passed by the end of 2025 or early 2026, will provide a clear regulatory framework, clarify jurisdiction, and eliminate legal ambiguities that have deterred institutional investors. The "waiting for regulatory clarity" camp, including some of the largest asset management companies and pension funds, will finally gain market access. At that time, the ETF inflows we are currently seeing will appear insignificant compared to the impending flood of funds.
Expanding Asset Tokenization. Large financial institutions are advancing the tokenization of government bonds, real estate, commodities, and stocks. JPMorgan Chase, BlackRock, Franklin Templeton, and other institutions are building tokenization platforms. This validates the value of the entire cryptocurrency infrastructure, proving that blockchain is not only suitable for "digital gold." As tokenization scales up, illiquid assets begin trading 24/7 and leverage demand decreases, highlighting Bitcoin's role as a neutral settlement asset and making it the "Transmission Control Protocol/Internet Protocol (TCP/IP)" of the digital finance sector. Stablecoins are rapidly gaining popularity. This is the most underestimated bullish factor. Global adoption of stablecoins is exploding, especially in developing countries. Tether and USDC are becoming major US dollar payment channels across large parts of the global economy: when Nigerians receive USDC instead of Naira as payment, when Argentine businesses hold dollar-denominated stablecoins instead of pesos, and when cross-border payments are made through stablecoins instead of correspondent banks, cryptocurrency infrastructure has become an indispensable part of global trade. Stablecoins and Bitcoin are not competitors, but rather a dual system. Stablecoins act as a medium of exchange in the digital economy, while Bitcoin plays the role of a store of value. As more economic activity and capital flow into the digital economy, a significant portion will naturally flow to Bitcoin. You can think of stablecoins as the broad money supply (M2) of the digital world, while tokenization is the bridge to bringing traditional fiat assets into the system. This will create a powerful network effect: the adoption of stablecoins will bring millions of new users into the cryptocurrency ecosystem. After leaving stablecoins, these users will eventually need a long-term store of value, and Bitcoin will become the default choice. The network effect brought about by the growth of stablecoins will accelerate the adoption of Bitcoin in a way that is difficult to quantify but cannot be ignored.
Historical Patterns Repeating Themselves
Decades of market experience have taught me that initial lows are often retested. We witnessed this in April—the market bottomed out, rebounded, then retested the lows, and then began a significant rise. This is a normal and healthy pattern for the market to build support levels and shake out weak holders.
I expect Bitcoin may follow a similar path.
We have likely already reached an initial low, but a retest of that low is still possible in the coming weeks. Another wave of selling could occur as the last wave of weak holders capitulates, potentially even a brief "final cleansing" that pushes Bitcoin to even lower levels. If a retest of the low occurs, it will present an excellent opportunity this year. During the retest, smart money that missed the first bottom will have a second chance to enter the market. A retest with shrinking volume and diminishing panic will confirm that the initial low was indeed the true bottom. However, I do not recommend waiting for a retest—I believe the current range between Bitcoin and the stock market presents an ideal time to seize opportunities when fear is high and greed is low. Bitcoin has been trending downwards this year, and while the early whale selling triggered by the "silent IPO" may not be completely over, significant progress has been made. Bitcoin's holding structure is more dispersed than ever before, with retail investors shorting and exiting the market, ETF buyers patiently increasing their holdings, investors worried about fiat currency devaluation continuing to systematically add to their positions, and developing countries steadily adopting Bitcoin as a financial infrastructure. Meanwhile, the market landscape for 2026 is exceptionally favorable: continued fiscal support, monetary policy assistance, breakthroughs in artificial intelligence driving speculative fervor and real profit growth, manufacturing expansion, the Cryptocurrency Clarity Act providing regulatory certainty, increased asset tokenization, and the widespread adoption of stablecoins strengthening network effects. Bitcoin fluctuates in tandem with risk assets, which are poised for a strong performance in 2026. Therefore, Bitcoin also has the foundation for a significant surge in 2026. The dawn is just ahead. I always recall the scene of "Liberation Day": the S&P 500 fell 20%, economists warned of a recession, and people panicked and sold off. At the time, I suggested that, looking back six months later, we would find that our initial panic was unfounded. I proved correct. Now, I hold the same view on Bitcoin. Admittedly, this pullback has been painful, market sentiment is extremely poor, and the Fear & Greed Index has fallen to 15, matching the "Liberation Day" low. But pullbacks in a bull market always feel like the end of the world is coming, always make people feel "this time is different," always make people believe that the upward trend is over. But for those who can see through the fear, these pullbacks are always buying opportunities. In my trading career, I've experienced countless crises—the 1994 Mexican financial crisis, the 1998 Brazilian financial crisis, the global financial crisis, the COVID-19 pandemic, the "Liberation Day" panic—and I know that these unsettling moments are never as terrible as they seem. One core truth remains unchanged: if you can overcome fear, these moments will present the best investment opportunities. Bitcoin has not collapsed, and digital assets will not die. What is happening now is exactly what should have happened: a maturing risk asset, still recovering from the winter of 2022, is currently undergoing a pullback in tandem with other risk assets, accompanied by uncertainty and portfolio adjustments. Unlike April, this pullback is narrower, primarily concentrated in growth stocks and cryptocurrencies, rather than a broad market panic—this is healthier, indicating that the market is undergoing differentiated pricing, and that when the recovery arrives, the rise may be more rapid and targeted. For those who can see the opportunity, now is the time to increase holdings. This is not reckless buying, not leveraged trading, not investing money you can't afford to lose, but rather a prudent and firm deployment based on fundamentals and conviction. In the context of AI-driven investment excess returns, the market will be highly volatile. Governments face significant challenges in dealing with this disruptive force, and moments of panic are inevitable. Doubts will persist, and media headlines will be filled with talk of crashes and bear markets. Ignore the noise and focus on the fundamentals: Artificial intelligence is the most important and powerful innovation we've witnessed in our lifetime, and it will bring us better days in the coming years. When everyone sees the light at the end of the tunnel, it's too late to make your move. Currently, the fear and greed index in the cryptocurrency market is as low as 15, market participants are surrendering, and the tunnel is still dark—but the opportunity is right now. Six months from now, just like on Liberation Day, the market narrative for Bitcoin will be completely different. When we look back at the current prices and sentiment, we can't help but wonder: why did we have any doubts in the first place? The light is there. You just need to be willing to see it.
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