Bitcoin Doomsday: The 16-Step Domino You Didn’t See Coming

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Bitcoin pulled a proper diva moment, dropping with a theatrical swoop that would make a reality show finale look tame. And one crypto analyst believes the market is strolling toward a finale that ends at zero.

Jacob King, founder of SwanDesk, laid out a 16-step breakdown of how Bitcoin could enter what he calls a “worst-case, totally catastrophic domino effect of cascading failures.”

BTC flirted with the $60,000 mark today, with on-chain data showing $3.2 billion in realized losses on February 5 alone.

That figure is larger than what investors shed during the Terra-Luna crash or the FTX bankruptcy, making it the most severe single-day capitulation event in Bitcoin’s history.

What Does King’s Bitcoin Doomsday Look Like?

King’s scenario begins with exchange liquidity collapsing under sustained ETF outflows, creating what he describes as a “self-reinforcing capitulation loop.” Retail investors rush for the exits, but platforms freeze or go dark. Exchanges lacking reserves start banning withdrawals altogether.

From there, things get worse. Tether comes under federal pressure and stops printing new supply, removing the artificial liquidity that has historically helped spark rebounds. Miners, hit by falling rewards and rising energy costs, dump their BTC reserves onto a market that already has no buyers.

Then comes the big domino. King warns that heavily leveraged corporate holders like MicroStrategy could face margin calls, forcing “massive involuntary liquidations” of hundreds of thousands of coins. Demand vanishes. Tether depegs. Hashrate collapses so far that a 51% attack becomes realistic.

“The story of Bitcoin mirrors the Titanic. It was said to be unsinkable, but that was never true. You will see,” King wrote.

Can Bitcoin Actually Fall That Far?

The fear is not entirely detached from reality. Market depth, the amount of capital available to absorb large sell orders, sits more than 30% below where it was in October. That kind of thin liquidity means even moderate selling can trigger sharp moves down.

Historical patterns offer some perspective. Each Bitcoin bear cycle has produced a smaller drawdown than the one before: 93% in 2011, roughly 77% in 2022. If that trend continues from the $126,000 peak, a potential floor sits somewhere around $38,000.

Whether King’s full doomsday chain plays out is debatable, but traders need to be on full alert.

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2026-02-06 16:02