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Former U.S. budget director David Stockman escalated his criticism of Bitcoin in a recent X post, describing the flagship cryptocurrency as a “rug pull” after its decline from $125,000 to the $60,000s in the last five months. The nearly 50% correction, argues President Reagan's former advisor, exposes what should be seen as a fundamental contradiction between the “store of value” narrative of Bitcoin and its actual price behavior during risk-off phases.
For Stockman, a longtime fiscal conservative and outspoken critic of central bank policy excess, the episode reinforces how post-2008 liquidity cycles have fueled speculative manias detached from real underlying cash flows.
Is Bitcoin "store of value" or "rug pull?"
The “rug pull” label by Stockman there, while provocative, is not new in crypto discourse. Similar language has surfaced during prior bear markets, including the 2018 collapse and the 2022 deleveraging cycle, when drawdowns exceeded 70% before recoveries.
Of course, such harsh remarks drew responses from market participants, though the counterarguments do not directly challenge the arithmetic of the drop. On-chain analyst Willy Woo pointed to historical drawdowns in trillion-dollar equities, such as Nvidia, Apple, Amazon and Meta, each of which at some stage lost between 60% and 90% from peak to trough before recovering.
If large-cap stocks can suffer deep declines and remain core components of long-term portfolios, volatility alone may not invalidate Bitcoin’s thesis, according to Woo.
Another vocal proponent of BTC, investor Lawrence Lepard, took a more forward-looking position, arguing that the cryptocurrency remains in an adoption phase and could outperform gold over the next two years. So, for him, the current market environment is transitional rather than terminal.
Dan Burgin
Vladislav Sopov