“People were keenly aware, like me, they were bulled up because it was ‘go’ time,” Connors said. “We were going to go to that $250,000 to $300,000, $400,000 level using previous cycles.”

Instead, the market turned against them.

“The movement was obviously not onchain data. I mean, it was all derivatives,” he said. “So paper bitcoin again is alive and well and governs the near term.” The lesson, he argues, is that bitcoin’s price can be driven as much by leveraged bets as by demand for the asset itself.

That hasn’t changed much in the past year. Perpetual futures, which allow traders to bet on price moves without owning bitcoin, remain a major part of crypto trading. Exchanges also have strong financial incentives to keep offering leveraged…