Autobiographers of Loss: Why the Bitcoin Scam Narrative Is a Psychological Mirage

Market cycles consistently produce a familiar chorus labeling Bitcoin a fraud during aggressive drawdowns. However, these labels reveal more about investor psychology than asset fundamentals. According to Prospect Theory, the psychological pain of a loss is twice as potent as the joy of equivalent gains. When retail participants enter during euphoria and face a 40% correction, the word "scam" provides an emotional explanation that matches their intense financial agony.

Statistical reality contradicts this emotional narrative. Data confirms that any investor holding Bitcoin for over four years has never realized a loss, regardless of their entry point. Despite this, roughly 70% of rally-driven retail investors exit at a loss within a year. This panic facilitates a massive wealth transfer; institutional giants like BlackRock absorb supply from "weak hands" who cannot tolerate volatility.

Furthermore, Bitcoin is maturing. Drawdowns have compressed from 93% in 2011 to approximately 50-60% in 2025. This volatility dampening suggests a transition toward a stable, generational wealth vehicle. The asset remains constant; only your time horizon must change to survive the psychological pressure. $BTC