Fundview: Crypto Market Sell-Off? Experts Assess the Crypto Turmoil.

Moritz Schildt, co-founder and CEO of coinIX, contributed to a Fundview article titled “Crypto Market Sell-Off? Experts Assess the Crypto Turmoil”; written by Eneida Beshaj.This article is the English translation of the original German publication. Click here to read the original article in German.

The recent crypto sell-off hit an already weakened crypto market and was less a sign of a structural shift in sentiment than the result of cyclical pressure factors. Six experts discuss their outlook on the crypto market.

Moritz Schildt: “Selection and risk management matter.”

The recent sell-off primarily highlights how strongly crypto markets are driven in the short term by global liquidity, interest-rate expectations, and risk appetite. The nomination of Kevin Warsh as a potential next Fed chair is less the trigger than a catalyst: markets are suddenly pricing in a broader range of monetary-policy scenarios, ranging from a stricter policy path to politically charged debates about central bank independence. In an environment where many investors are already nervous and defensively positioned, an additional impulse of uncertainty is often enough to trigger rapid risk reduction.

A trend reversal should therefore not be expected automatically. The macro environment will be decisive: if real yields decline and pressure from the U.S. dollar eases, digital assets typically benefit from tailwinds; if interest rates remain elevated for longer or volatility in traditional markets increases, further pullbacks may follow. At the same time, we observe that such phases often flush out overleveraged positions and make market structure healthier. This is painful in the short term but constructive in the long run. Structural progress should not be underestimated: regulation is becoming clearer across many jurisdictions, institutional infrastructure is more robust than in previous cycles, and market breadth is expanding. This does not necessarily lead to steadily rising prices, but it reduces medium-term tail risks and improves the quality of the investable universe.

For investors, this means that selection and risk management matter now more than ever. Bitcoin and a small number of fundamentally strong protocols tend to show the greatest resilience during stress phases, while more speculative segments react disproportionately. Investors allocating to crypto strategically should maintain liquidity reserves, apply clear rebalancing rules, and adopt scenario-based thinking rather than trying to time or outperform the market. Our view remains: volatility is the price of asymmetric opportunity — but it must be managed professionally.

James Butterfill: “The first half of the year is likely to remain characterized by volatility.”

The recent sell-off occurred at a time when the crypto market was already under pressure and reflects a combination of cyclical factors — including Bitcoin sales by large investors totaling about USD 29 billion — as well as monetary-policy and geopolitical influences, rather than signaling a fundamental shift in Bitcoin’s long-term role.

In the short term, the environment remains challenging. Since the U.S. Federal Reserve’s monetary-policy pivot in 2025, Bitcoin has lagged behind traditional hedging instruments such as gold, as geopolitical tensions and rising energy prices have primarily supported the so-called debasement trade — a trend in which Bitcoin would likely have participated more strongly without the cyclical selling pressure from large investors. Major Bitcoin holders have been reducing their exposure since the autumn, consistent with historical patterns observed in the middle of halving cycles. Institutional demand has also remained subdued: exchange-traded crypto products have recorded net outflows of around USD 500 million since the beginning of the year.

Monetary-policy expectations are adding further pressure. The nomination of Kevin Warsh as a potential Chair of the U.S. Federal Reserve has dampened hopes for a markedly dovish policy stance. While he is considered Bitcoin-friendly, his position on inflation control suggests a more restrictive orientation, limiting short-term support for risk assets — including Bitcoin.

However, these factors do not call the broader structural thesis into question. Public debt levels remain elevated, fiscal dominance persists, and the long-term monetary-policy environment continues to be expansionary. Moreover, Bitcoin has temporarily decoupled from global liquidity trends — a divergence that historically has tended to close again rather than become permanent.

Looking ahead, the first half of the year is likely to remain volatile and characterized by sideways market movements. Once cyclical selling pressure subsides and liquidity dynamics regain influence, the medium-term outlook remains constructive. From this perspective, Bitcoin currently appears less like a short-term momentum trade and more like a strategic allocation for investors with a longer investment horizon.

Oliver Shcäfer: “Positioning is healthier, but caution is warranted in the short term.”

The recent crypto market sell-off was also technically driven and, once again, resulted from a leverage unwind. Within a short period of time, derivatives liquidations totaling more than USD 2.5 billion accelerated the downward move significantly. Selling pressure was driven primarily by perpetual futures, while spot selling remained comparatively limited. The speed of the decline can be explained by the mechanics of these futures contracts themselves: a position ends either when the trader closes it or when it is automatically liquidated due to insufficient collateral, which can trigger a wave of technical selling.

At the same time, the macroeconomic environment added pressure. The nomination of Kevin Warsh — considered relatively hawkish — as Chair of the U.S. Federal Reserve supported both the U.S. dollar and interest-rate expectations, putting additional pressure on risk assets. Although the market has stabilized recently, rebounds following liquidation cascades are typical and, on their own, do not constitute a reliable signal of a trend reversal. As long as spot demand, market breadth, and liquidity do not clearly improve, momentum remains fragile.

Following the reduction of excessive leverage, Bitcoin positioning can now be described as “healthier,” but caution still dominates in the short term. Our base case is a volatile consolidation with a slight downward bias, in which rallies are likely to be sold. A more constructive development would require a spot-driven recovery, a gradual rebuilding of open interest (i.e., larger aggregate positions in Bitcoin derivatives), and a stabilization of macroeconomic volatility.

On the positive side, a sustained move back above the USD 79,000–80,000 range would send a more bullish signal. Conversely, a break below the mid-USD 70,000 level would increase the probability of another stop-out phase, particularly if the U.S. dollar and interest rates strengthen again. A test of the 200-day moving average in the USD 58,000–60,000 range remains a possible — albeit extreme — scenario.

Samir Kerbage: “Demand for Bitcoin will continue to grow.”

Crypto prices have been negatively affected by the current risk-averse environment, driven by a range of factors including geopolitical tensions, the impact of AI developments, and an uncertain macroeconomic outlook. The nomination of Kevin Warsh as Chair of the Federal Reserve has also contributed to market uncertainty regarding the direction of monetary policy, as he is known to favor higher interest rates — a stance that could weigh on risk assets such as Bitcoin.

We do not believe that the short-term uncertainty surrounding Warsh’s views on the interest-rate environment undermines the longer-term investment case for Bitcoin and other digital assets. Notably, Warsh has spoken positively about Bitcoin in public, stating that it can function as a form of “new gold,” particularly for younger investors.

As a scarce digital asset with a limited supply, we expect demand for Bitcoin to continue rising, especially as more traditional financial institutions open their platforms to Bitcoin and crypto ETFs. In our view, the current macroeconomic environment — characterized by currency instability and unsustainable public debt levels — supports the case for a non-sovereign, emerging store of value such as Bitcoin. Regulatory clarity for this asset class may improve in the coming months, as the U.S. Congress debates digital-asset market-structure legislation that could be passed later this year.

Markus Hujara: “Weakness is less crypto-specific and more liquidity-driven”

The recent weakness is less crypto-specific and instead driven by macroeconomic and liquidity factors. Digital assets remain a relatively small but highly liquid market and therefore react sensitively to global risk-off movements. The Warsh announcement, with its hawkish tone, has weighed on risk assets more broadly. In addition, deleveraging effects in other asset classes have created spillover effects into crypto markets. Political uncertainty in the U.S. surrounding the Clarity Act is also causing short-term caution — even though we view the Act itself as a very positive and long-overdue step for the industry.

We interpret these developments as short-term price and liquidity effects, not as a structural change in the long-term outlook for blockchain technology and the business models built on it. On the contrary, from our perspective, the conditions for the industry have never been stronger. Technologically, the ecosystem has reached a high level of maturity. At the same time, regulatory clarity is increasing across key jurisdictions — a critical factor for institutional capital. On the adoption side, stablecoins and prediction markets such as Polymarket demonstrate growing usage beyond early adopters.

Currently, we observe three central developments. First, AI solutions integrated into everyday applications are increasingly acting autonomously. For these agents to participate independently in economic exchange in the future, they will require global, programmable infrastructure for digital transactions and coordination. At the same time, demand for privacy and identity solutions is rising in order to protect human identity and value creation in an AI-driven world. Both aspects of the emerging agent economy will rely on blockchain technology.

Second, engagement from institutional investors, banks, and traditional financial institutions continues to grow — both as users of the technology within their core businesses and as providers of capital. Third, functional business models with real revenues and sustainable cash flows are increasingly moving into focus, while market prices have so far only partially reflected these operational developments.

Overall, we view the current phase less as a structural break and more as a typical interim stage within a long-term adoption cycle — historically often an attractive environment for long-term-oriented capital.

Johanna Belitz: “The current market cycle is clearly characterized by tightening liquidity.”

Historically, Bitcoin has often followed the price of gold with a time lag. Although this correlation has weakened recently, the relative valuation metric sends a clear signal: compared to gold, Bitcoin appears as inexpensive as it has rarely been before. The Bitcoin–gold ratio is at historically extreme levels, which in the past have often marked attractive long-term entry zones.

This undervaluation can largely be explained by current market behavior. Despite a weaker U.S. dollar and growing discussions about monetary-policy easing, the expected tailwind has not yet materialized. In this phase, Bitcoin is behaving less like a safe haven and increasingly like a liquidity asset: during periods of tight liquidity, it is sold rather than accumulated as an inflation hedge. Outflows from structured products such as Bitcoin ETFs in the U.S. market reinforce this impression.

The current market cycle is therefore clearly characterized by liquidity tightening — a condition that historically has not been permanent. If the global environment continues to deteriorate ahead of a monetary-policy pivot, additional market dislocations cannot be ruled out. Toward the end of such phases, however, even previously strong-performing assets such as gold often come under pressure as investors raise liquidity to offset losses or finance new opportunities. During these portfolio-rotation phases, capital typically flows from highly valued assets into relatively inexpensive ones. This is precisely where the cyclical potential for digital assets such as Bitcoin lies.

Beyond liquidity dynamics, the long-term outlook remains decisive. Regardless of short-term capital flows, one trend is clear: the world is becoming increasingly digital. Global trade relationships are under growing pressure, confidence in the U.S. dollar as the sole settlement currency is gradually eroding, and alternative settlement systems are gaining importance. In this context, blockchain technology can position itself as a future digital and global infrastructure layer. Once the liquidity cycle turns — for example, through the end of quantitative tightening or a new monetary-policy direction following a leadership change at the Federal Reserve — Bitcoin could benefit disproportionately. Historically, Bitcoin bull markets have coincided with phases of expanding global liquidity.

About coinIX GmbH & Co. KGaA

Founded in 2017 and based in Hamburg, coinIX GmbH & Co. KGaA specializes in blockchain investments and digital assets. The firm’s team includes experts in asset management, venture capital, and emerging technologies.

coinIX invests in cryptocurrencies, token projects, and blockchain startups within decentralized markets. The company’s shares are publicly traded on the Düsseldorf, Berlin, and Munich stock exchanges (WKN: A2LQ1G | ISIN: DE000A2LQ1G5 | Ticker: XCX). More information: www.coinix.capital

About coinIX COINVEST SCI1

The coinIX COINVEST SCI1 is a German special AIF (Alternative Investment Fund) launched in June 2022, managed by coinIX Capital GmbH, a registered capital management firm. The fund is available exclusively to professional and semi-professional investors and can invest up to 100% of its capital in crypto assets.

It actively manages a diversified digital asset portfolio, generating additional income through staking and blockchain-native financial strategies. The fund’s ISIN is DE000A408Q55, and investments can only be made directly through coinIX. It is not available to private investors. More details: coinIX COINVEST SCI1.

Source: Fundview

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