Why Bitcoin Will Collapse in the Next 7-10 Years?
Justin Bones, founder and chief investment officer of Cyber Capital, predicted that Bitcoin (BTC) could crash in 7 to 11 years.
He points to declining security budgets, a 51% vulnerability to attacks and what he calls impossible choices for the network. Bones warns that these fundamental vulnerabilities can erode trust and even lead to chain splits.
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Bitcoin's economic security model is being refined.
Over the years, experts have raised several alarms for Bitcoin, especially quantum computing.
However, in a detailed post, Bones described a different category of anxiety. Bitcoin's long-term threat lies in the economic security model, he argued.
“BTC will collapse in 7 to 11 years from now! First, the mining industry will collapse, as the security budget shrinks. That's when the attacks start, censorship and double spending,” he wrote.
At the center of the controversy is Bitcoin's shrinking security budget. After each halving, mining rewards are halved, reducing the incentive to protect the network.
The most recent halving was in April 2024, with increments scheduled every four years. Bones argued that to maintain its current level of security, bitcoin would require sustained price growth or permanently high transaction fees, both of which he considers unrealistic.
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The decrease in mining income and the increasing threat of attacks
According to Bones, mining revenue, rather than raw hashrate, is the most important measure of network security. As hardware efficiency improves, even as the cost of generating hashes decreases, hashrates can rise, making it a misleading indicator of attack resistance, he said.
In his view, the decline in mining revenues directly reduces the cost of attacking the network. Once the cost of mounting a 51% attack falls below twice the cost or benefit of disruption, such attacks become economically rational.
“Crypto-economic game theory is based on punishment and reward, carrot and stick. This is why mining revenues determine the cost of the attack. As for the reward of the calculation: double cost, it is a highly realistic attack vector due to the large potential rewards of attacking 51% of exchanges,” he wrote.
Currently, transaction fees account for only a small portion of mining revenue. As block grants approach zero over the next decade, Bitcoin will have to rely entirely on fees to maintain the network. However, Bitcoin's limited space covers the transaction flow and overall payment revenue.
Bones also said that consumers tend to drop out of the network during rate hikes, so sustained high payments are unlikely, preventing the payments from reliably replacing subsidies for long-term suspensions.
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Overcrowding, bankable dynamics and a potential death spiral
In addition to the threat to the security budget, Bonds warned of possible “bank-driven” conditions. According to him,
“Even under the most conservative estimates, if each BTC user made just one transaction, the queue would be 1.82 months longer!”
He explained that during a shock, the network cannot process enough withdrawals, effectively crowding out users and increasing fees. This creates conditions similar to a bank run.
Bones pointed to Bitcoin's two-week correction pattern as a complex risk. Unprofitable mines may be shut down during severe price declines, delaying production until the next correction.
“As the shock causes the price to crash, that causes more miners to shut down, which slows down the chain even faster, causing more shocks and the price to crash again, and more miners to shut down, etc.
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He also said the risks of such congestion could make mass self-preservation dangerous during times of stress, warning that users would not be able to get off the grid when demand spikes.
An inevitable problem for Bitcoin
Bones concludes that Bitcoin is in a fundamental dilemma. One option is to increase the total supply above the 21 million coin limit to maintain mining incentives and network security. However, he pointed out that this undermines Bitcoin's core value proposition and could lead to a chain split.
The alternative, he says, is to endure an ever-weakening security model, increasing exposure to attacks and censorship.
“The most likely outcome is that the 7-11 years I described and the other options both occur simultaneously,” Bones wrote.
He linked the issue to the legacy of the block size wars, arguing that governance restrictions in Bitcoin Core will only make meaningful protocol changes until a crisis forces them. At that point, he warns that it may already be too late.
