Bitcoin Investors Face Record Losses: Capitulation or Bottom?

Bitcoin investors face $4.5 billion in losses; CZ predicts a supercycle.

Holders of digital gold have realized losses amounting to $4.5 billion, marking a three-year high. CryptoQuant analyst Gaah described the situation as market capitulation.

$4.5 Billion in Realized Loss on Bitcoin

“Highest amount of realized losses in three years. The last time this occurred in Bitcoin, the price was trading at $28,000 after a brief correction period that lasted about a year.” – By @gaah_im pic.twitter.com/OJ7bbL3RSC

— CryptoQuant.com (@cryptoquant_com) January 26, 2026

The expert noted that widespread loss realization historically precedes the formation of a local bottom. Similar metrics were last observed when the price was $28,000 following a prolonged year-long correction.

Changpeng Zhao: Supercycle Instead of Four-Year Model

Despite the decline in prices at the beginning of the year, Binance co-founder Changpeng Zhao (CZ) suggested the onset of a digital gold supercycle in the next 12 months. In an interview with CNBC, he speculated that traditional market models might lose relevance.

“Bitcoin usually follows four-year cycles: historically, every four years we see a new high, followed by a decline. But this year, given the pro-crypto stance of the US and other countries, we are likely to break this pattern,” he stated.

Zhao does not plan to return to managing the exchange, despite being pardoned by Donald Trump.

The platform’s founder acknowledged that the presidential decree lifts the ban on working at the company. However, CZ sees no point in returning to a leadership position.

“I don’t need it, nor do I have much desire. Leaving Binance after seven years was a good way to end that chapter. At the time, it was painful, I didn’t like it. But then you get used to it. I believe in giving space for other strong leaders to grow,” he noted.

Zhao emphasized that Binance is thriving under the leadership of co-CEOs Richard Teng and Yi He. Key metrics are growing: the user base has exceeded 300 million, and the annual trading volume has reached $34 trillion.

CZ describes himself as a “passive shareholder.” He avoids being a “backseat driver,” preferring to offer advice publicly through X when necessary.

Institutions Buy the Dip

The sentiment among major players contrasts with the panic selling in the retail market. According to the Charting Crypto Q1 2026 report from Coinbase, 71% of institutional investors consider bitcoin “undervalued” in the $85,000-95,000 range.

A survey conducted in December-January among 75 professional managers and 73 large private investors revealed:

• 80% of institutions are willing to hold or increase positions if there is a 10% dip;
• 60% of respondents increased their allocation to digital assets after the October ATH;
• 54% believe the market is in an accumulation phase, presenting entry opportunities.

Only 4% of surveyed professionals described the current value of digital gold as overvalued.

Macroeconomic Context

At the time of writing, bitcoin is trading around $87,650 — 30% below the all-time high of $126,080 (according to CoinGecko). Since the major crash on October 10, which led to $19 billion in position liquidations, the market has moved sideways with a downward bias.

Coinbase analysts attribute this to geopolitics: escalating tensions in the Middle East and tariff threats from the Trump administration.

Amid uncertainty, traditional safe-haven assets have risen:

• gold reached a new all-time high above $5,000;
• the market value of silver has doubled since October;
• the S&P 500 index showed a moderate increase of 3%.

Meanwhile, the US economy is showing resilience: real GDP grew by more than 5% in the fourth quarter, and inflation in December was 2.7%.

Coinbase expects that in 2026, the Fed will cut the rate twice. This could act as a catalyst for growth in risk assets, including cryptocurrencies.

In January, Bitwise analysts stated that the fourth quarter of 2025 marked the end of the bear phase.