Bitcoin has once again found itself at the center of intense debate, with whispers of a looming “death spiral” spreading across financial circles and social media platforms. The controversy stems from a recent opinion piece by Atulya Sarin, a finance professor at Santa Clara University, published in MarketWatch, where he claimed that Bitcoin is entering a downward spiral that could render it worthless.
The so-called Bitcoin death spiral theory suggests that when the market price of Bitcoin falls below the cost of mining, miners are forced to shut down operations. This, in turn, supposedly leads to reduced network security, lower hash rate, and further price declines—creating a self-reinforcing cycle of collapse. Critics argue this erosion of confidence could trigger mass sell-offs, especially in futures markets, accelerating Bitcoin’s demise.
While market sentiment can be fragile—and price drops undoubtedly test investor psychology—the narrative often overlooks the deeper, structural improvements within Bitcoin’s ecosystem. Just as past financial crises were less about asset devaluation and more about eroded trust, today’s discourse risks conflating short-term volatility with long-term failure.
Yet, amid the noise, seasoned analysts are focusing on data—not drama. One such voice is Anthony Pompliano, founder of Morgan Creek Capital, who has consistently highlighted that Bitcoin’s fundamentals are not just holding—they’re strengthening.
“Bitcoin’s fundamentals are improving. Don’t let price distract you. It remains the best-performing asset of the last decade—period.”
Pompliano emphasizes that price is only one metric among many and should not be mistaken for intrinsic value. Despite recent market corrections, key on-chain and network health indicators show robust growth. He points to seven critical data points that collectively refute the death spiral myth and affirm Bitcoin’s resilience.
1. Wallet User Growth: Adoption Is Accelerating
Over the past two years, the number of active Bitcoin wallet users has surged significantly. This isn’t speculative hype—it reflects real-world adoption across individuals, institutions, and emerging markets seeking financial sovereignty.
More wallets mean more participants securing the network, transacting value, and holding BTC as a store of wealth. This expanding user base strengthens decentralization and increases network effects—the very foundation of Bitcoin’s long-term value proposition.
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2. Declining Transaction Fees: Efficiency Is Improving
Since February 2018, average transaction fees on the Bitcoin network have been on a steady decline. This trend contradicts the outdated narrative that Bitcoin is too expensive or impractical for everyday use.
Thanks to Layer-2 solutions like the Lightning Network and improved on-chain efficiency, sending Bitcoin has become faster and cheaper than ever before. Lower fees enhance usability without compromising security—making Bitcoin increasingly viable for microtransactions and global remittances.
3. Rising Transaction Volume: Network Activity Is Booming
Contrary to claims of stagnation, the total number of Bitcoin transactions has increased consistently over the past two years. More transactions indicate growing utility—not irrelevance.
Whether used for peer-to-peer payments, cross-border transfers, or institutional settlements, rising transaction volume demonstrates that demand for Bitcoin as a settlement layer is alive and well.
4. Increasing Confirmed Transactions Per Day
Daily confirmed transactions on the Bitcoin blockchain have also seen sustained growth since early 2018. Each confirmation represents trust in the network—a vote of confidence from users who rely on Bitcoin’s immutability and censorship resistance.
Higher daily confirmation rates signal stronger throughput and reliability, reinforcing Bitcoin’s role as a global financial rail.
5. Steady Growth in Daily Transaction Volume (Excluding Hyper-Active Addresses)
When filtering out activity from highly active addresses (often associated with exchanges or bots), the remaining daily transaction volume still shows consistent upward momentum since 2018.
This metric reveals organic, real-user engagement—individuals and businesses using Bitcoin for actual economic activity rather than speculative trading. It's a powerful indicator of genuine adoption beneath the surface noise.
6. Hash Rate Surge: Security Has Never Been Stronger
Bitcoin’s hash rate—the measure of computational power securing the network—has nearly tripled over the past year alone. Even during price downturns, miners continue to invest in infrastructure, reflecting long-term confidence in the protocol.
A rising hash rate means greater resistance to attacks, faster block validation, and enhanced decentralization. Far from collapsing, Bitcoin’s mining ecosystem is maturing into one of the most robust distributed networks on Earth.
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7. Node Count Jumps 98% in Two Years
According to Bitnodes, the number of publicly accessible full nodes running Bitcoin software has increased by 98% over the last two years. Nodes validate transactions and enforce consensus rules—they are the guardians of decentralization.
More nodes mean greater network resilience, improved censorship resistance, and stronger alignment with Satoshi Nakamoto’s original vision. This surge reflects growing trust in Bitcoin’s open-source protocol and its ability to operate independently of any central authority.
FAQ: Addressing Common Concerns
Q: What is the "Bitcoin death spiral"?
A: The death spiral theory claims that falling prices push miners offline, weakening network security and causing further price drops in a vicious cycle. However, real-world data shows hash rate and node count are rising—even during bear markets—disproving this doomsday scenario.
Q: If the price is down, how can fundamentals be strong?
A: Price is influenced by sentiment, macro trends, and speculation. Fundamentals—like adoption, security, and usage—are measured by on-chain data. These metrics show consistent improvement regardless of short-term price action.
Q: Are lower transaction fees bad for miners?
A: While lower fees may reduce immediate revenue, they increase network utility. Miners benefit from long-term sustainability through broader adoption and future block rewards during halvings.
Q: Does increased mining activity harm the environment?
A: A growing portion of Bitcoin mining uses renewable energy sources. Many operations are built around stranded or excess power, contributing to grid stability and clean energy utilization.
Q: Can Bitcoin survive another market crash?
A: With stronger fundamentals than ever—including higher node count, hash rate, and global adoption—Bitcoin is better equipped to withstand volatility now than in previous cycles.
Q: Is Bitcoin still relevant in 2025?
A: Absolutely. As fiat inflation persists and digital ownership evolves, Bitcoin continues to emerge as a preferred hedge against monetary debasement and a cornerstone of decentralized finance.
The Big Picture: Fundamentals Over Fears
The idea of a “death spiral” thrives on fear and misunderstanding. But data tells a different story—one of resilience, innovation, and growing strength.
Every layer of Bitcoin’s infrastructure is improving:
- More users are joining.
- Transactions are faster and cheaper.
- The network is more secure than ever.
- Decentralization is deepening.
These aren’t speculative claims—they’re measurable realities backed by transparent blockchain analytics.
As Anthony Pompliano reminds us:
“Price is just one way to measure value. But true value lies in utility, scarcity, decentralization, and trust.”
In a world where confidence in traditional financial systems wavers, Bitcoin offers an alternative anchored in code, not promises.
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The narrative may shift with the markets, but the fundamentals remain clear: Bitcoin isn’t dying—it’s evolving.