Bitcoin's glory days are over and a sudden collapse could trigger financial chaos, warns investment chief
Bitcoin may have created millionaires, but its best days are behind it – and a sudden crash could unleash turmoil across financial markets, a senior investment expert has warned.
Simeon Willis, chief investment officer at consultancy XPS, said the cryptocurrency has dramatically underperformed traditional investments in recent years, despite its reputation for spectacular gains. He described Bitcoin as a 'one trick pony' whose underlying technology cannot adapt to the rapidly evolving digital finance landscape.
Yet Willis cautioned that the evaporation of Bitcoin's $1.54 trillion market could trigger a cascade of selling in risky assets like equities, pushing investors toward safer havens such as government bonds. The wealth destruction would ripple through the economy, reducing consumer spending and hampering UK economic growth.
The stark assessment comes as Bitcoin continues its volatile journey. The cryptocurrency hit a record high above $126,000 in October 2025 before plunging below $60,000 by July this year. Recent months have seen renewed volatility, with prices hovering around $77,000 amid turbulence in bond markets and hopes for favorable US legislation.
The golden era is over
According to government figures, 240 Britons earned more than £1 million from cryptocurrency in the 2024-25 tax year, each pocketing an average of around £3 million. An investor who placed £2,500 into Bitcoin a decade ago would now have approximately £300,000 – enough to purchase an average UK home outright.
However, this headline-grabbing success masks a crucial shift. Between 2016 and 2021, Bitcoin delivered extraordinary returns of 7,000 percent. In the past five years, it has returned just 72 percent – barely doubling investors' money and actually underperforming the FTSE All World global equity index, which gained 75 percent over the same period.
Those days are long gone
Willis said, referring to the era of Bitcoin millionaires. He argued that for Bitcoin to sustain or increase its current valuation, it must evolve from a speculative asset into a fully functional currency with widespread everyday adoption. Without this transformation, he believes it will 'wither fast.'
A technology dead end
Willis dismissed arguments that Bitcoin serves an essential role in the broader digital finance revolution. He pointed out that blockchain technology – the distributed ledger system underpinning digital finance – does not require cryptocurrency to function.
The UK government's upcoming DIGIT initiative exemplifies this reality. In February 2026, HM Treasury selected HSBC's Orion blockchain platform to issue the Digital Gilt Instrument, Britain's first digital government bond, scheduled for pilot issuance in early 2027. The Orion platform operates entirely in Sterling without any cryptocurrency component and has already facilitated the issuance of over $3.5 billion in digitally native bonds globally.
Bitcoin is a one trick pony – the Bitcoin blockchain only does Bitcoin. It doesn't do smart contracts which can automate payments, and is not programmable for growing digital finance areas like tokens.
Willis explained. He warned that other blockchains with superior capabilities could rapidly eclipse Bitcoin, much as customers quickly abandoned Silicon Valley Bank during its spectacular 48-hour collapse.
It's not scaremongering to consider that Bitcoin could disappear within a single day. Stranger things have happened.
Willis stated.
Contagion risks across markets
If Bitcoin were to fail spectacularly, the consequences would extend far beyond cryptocurrency markets. Willis predicts a sharp withdrawal from digital markets, including redemptions of other cryptocurrencies and stablecoins – digital currencies pegged to traditional assets.
Stablecoins present particular concerns. USD Tether, the most popular stablecoin with a market capitalization exceeding $183 billion, backs its coins primarily with US Treasury securities (approximately 80 percent of reserves). However, the remaining reserves include more volatile assets such as gold (roughly 5 percent), Bitcoin (around 3 percent), and secured loans. A Bitcoin collapse could undermine confidence in these instruments, potentially preventing investors from recovering their full investment.
Willis drew parallels to the 1998 collapse of hedge fund Long-Term Capital Management, which lost $4.6 billion in under four months and required a $3.6 billion bailout orchestrated by the Federal Reserve. That crisis, combined with Russia's debt default, triggered double-digit sell-offs in equity markets. A Bitcoin failure of similar magnitude could prompt investors to dump risky assets and flee to the perceived safety of government bonds.
The wealth destruction – both direct losses and indirect effects on consumer confidence – would reduce household spending power, weighing on economic growth just as the UK economy faces other headwinds.
A fragile hope
Despite institutional developments such as the US government establishing a Strategic Bitcoin Reserve in March 2025 using approximately 200,000 Bitcoin seized through asset forfeitures, fundamental questions about Bitcoin's long-term viability remain.
Bitcoin's fourth 'halving' event in April 2024, which reduced mining rewards to 3.125 Bitcoin per block, was meant to support prices by constraining new supply. The next halving is not expected until 2028. Yet this technical feature has not prevented the cryptocurrency's recent underperformance against traditional investments.
While I may not have bought into the investment case for Bitcoin, I'm hoping that it can hang on. But if it can't, that any demise is long, drawn-out and predictable. For everyone's sake.
Willis concluded.
