Could Bitcoin ever fall to zero? The question is back in circulation as traders fret over a fresh liquidity squeeze that could push prices lower. Fund manager Michael Kramer of Mott Capital Management warned this week that looming Treasury settlements might siphon roughly $150 billion from markets — a hit he says often shows up first in Bitcoin’s price action.
“In my experience, Bitcoin tends to be a better liquidity indicator than most other instruments. If the Treasury settlements are a drain on liquidity, then Bitcoin could be heading much lower,” Kramer wrote.
Why the concern matters now
- Bitcoin has slipped about 11% from highs above $82,500 and recently broke support around $75,000, moves traders interpret as rising crash risk.
- Kramer’s view is that if large-scale Treasury settlements reduce overall market liquidity, risk assets like Bitcoin can weaken quickly because liquidity is what keeps rapid sell-offs from cascading.
Is zero a realistic outcome?
Most analysts still consider Bitcoin dropping to zero a fringe scenario. Several factors underpin that view:
- Large institutional holders, notably MicroStrategy, have historically bought dips instead of selling into them, acting as a de facto price support.
- Reports of standing buy orders from major backers at very low levels create additional downside buffers.
- The article notes that the United States has set up a Strategic Bitcoin Reserve, which — if sustained — provides an institutional floor that most crypto assets lack.
That said, nothing eliminates downside risk. Bitcoin remains volatile; 10% plus moves are common, and critics point out its speculative nature, especially when liquidity tightens.
The practical takeaway
Right now the bigger, more credible threat is not an extinction event but further crash risk and a prolonged liquidity squeeze. Historically, the “could Bitcoin go to zero?” debate cools off once liquidity returns, but in the near term traders should prepare for a choppier market and elevated downside risk rather than a total wipeout.
Read more AI-generated news on: undefined/news
