Justin Bons, the founder and Chief Investment Officer of the crypto fund CyberCapital, is sounding the alarm, suggesting Bitcoin could face a catastrophic collapse within the next 7 to 11 years. He attributes this potential doom to the cryptocurrency's economic and security model, specifically citing the diminishing mining rewards from halving cycles and the slow drain of the budget that keeps the network secure.
Bons argues that for Bitcoin to maintain its current level of security, it would have to pull off a magic trick: either doubling its price every four years or relying on sky-high transaction fees forever. He dismisses both scenarios as mathematically impossible, pointing out that such exponential price growth would eventually eclipse the entire global GDP, while exorbitant fees would be unsustainable in a competitive market where users can simply flee to cheaper alternatives.
The heart of the problem, according to Bons, is Bitcoin's shrinking "security budget"—the total revenue paid to miners. He emphasizes that security is measured by the cost of an attack, not just hash rate alone. With this budget dwindling, he warns that 51% attacks and double-spend scenarios become increasingly attractive. He suggests that large exchanges could be sitting ducks, with attack costs potentially dropping to a few million dollars while the potential profits could reach hundreds of millions or billions.
Bons points out the grim math: even a $1 billion investment could disrupt a network worth over $2 trillion, a calculation that rival states or large financial actors might find tantalizing. He sees Bitcoin facing two unpalatable paths: increasing inflation beyond the sacred 21 million supply cap or accepting greater vulnerability to attacks and censorship. This dilemma, he notes, challenges Bitcoin's foundational "social contract," with some core developers, like Peter Todd, openly acknowledging the security budget problem and discussing supply increases as a potential fix.
He also highlights Bitcoin's limited capacity of about 7 transactions per second (TPS), which he says could lead to months-long queues during crises, akin to a "bank run" where users can't move funds quickly. A confidence crisis and price drop could reduce miner profitability, lowering hashrate. Network slowdowns from delayed difficulty adjustments might worsen transaction backlogs, fueling panic and risking a "death spiral" of price decline, miner exits, and network stagnation.
Bons concludes that the notion of Bitcoin as "immutable and eternally secure" is a fantasy, as the balance between security, scarcity, and utility has been disrupted. These issues, he argues, will become more evident in 7-11 years due to halving cycles, forcing the Bitcoin community into an inevitable confrontation. *This is not investment advice.
