- Bitcoin’s latest downturn has triggered renewed debate about whether the move reflects structural risk or simply another cycle of volatility.
- Roy Kashi of FalconEdge and Scott Ellam of XCE Connecting Excellence discuss institutional positioning, leverage and the role of macro factors in driving price swings.
- Both argue that Bitcoin’s long-term fundamentals remain intact, despite short-term turbulence in the market.
Bitcoin has experienced another sharp bout of volatility, with the world’s largest cryptocurrency falling rapidly after a strong run earlier in the cycle. The move has unsettled some investors and raised fresh questions about whether the downturn signals deeper structural risk or simply the latest chapter in Bitcoin’s historically volatile trading pattern.
In this episode of Expert Exchange, host Ricki Lee is joined by Roy Kashi, CEO of FalconEdge (AQSE:FEG; OTCQB:FEGLF), and Scott Ellam, CEO of XCE Connecting Excellence (AQSE:XCE; OTCQB:XCEGF). Together they examine what’s driving the latest sell-off, how leverage and institutional flows amplify price swings, and why many long-term Bitcoin investors remain unfazed by short-term volatility.
The discussion explores the difference between normal market turbulence and genuine structural risk, as well as how institutional investors interpret Bitcoin during periods of macro uncertainty.
Transcript
The following transcript has been edited for clarity and length. Some portions of the conversation have been condensed from the full interview.
Ricki Lee:
Bitcoin is no stranger to volatility, but this latest downturn has been sharp, fast and for many investors unsettling. After significant gains earlier in the cycle, we’re now seeing aggressive selling pressure, renewed macro concerns and growing questions about where or whether there’s a flaw in sight. So what’s really driving this move? Is this structural risk or simply cyclical turbulence?
I’m joined today by two Bitcoin bellwethers, Roy Kashi, CEO of FalconEdge, and Scott Ellam, CEO of XCE Connecting Excellence, to help answer some of these questions in this episode of the Expert Exchange.
So Roy and Scott, thank you so much for joining us today. Roy, do you want to introduce yourself?
Roy Kashi:
Yeah, sure. Thanks, Ricki. Good to see you again. I’m the CEO of FalconEdge. We are a hedge fund advisory business with a Bitcoin treasury management policy. We’ve been IPO’d on Aquis since November 2025 and we are also listed in the U.S. on the OTCQB since early February.
Our plan is that we advise hedge funds on the advisory side outside of regulation. We spun off from our parent company, which is a dollar hedge fund under a full-scope FCA umbrella business with its own internal capital allocation fund. Half the assets have been in crypto for the last nine years.
So for us, we use our yield strategy to incrementally grow and compound yield on our balance sheet via our strategies in Bitcoin.
Ricki Lee:
Thank you. And Scott, tell us a bit about XCE.
Scott Ellam:
Yeah, so I’m the CEO and founder of XCE, which is Connecting Excellence Group. We’re an international executive recruitment company.
It’s a traditional business that places senior-level candidates — vice president level, director level, partner level and C-level — in industries such as professional services, business advisory, logistics, life sciences and medical devices.
But since 2021, we’ve had a Bitcoin standard balance sheet and we are Bitcoin-only. We’ve used all surplus cash to purchase Bitcoin from 2021 onwards as a long-term treasury reserve asset.
We recently listed on Aquis in December and we’ve just gone onto the OTCQB markets in the United States. I’ve put together a capital markets team and a Bitcoin treasury strategy to access capital markets and increase our Bitcoin per share and Bitcoin holdings through equity raises.
We’ve also launched an XCE Bitcoin bond programme — Bitcoin-denominated bonds.
So it’s an expert Bitcoin treasury team on the balance sheet side and an expert international executive recruitment team on the operational side of the business.
By combining both and becoming a public company, we’re able to attract high-billing executive consultants to the operating business to drive more cash flows, buy more Bitcoin and make us more attractive to capital markets and investors looking for operational growth backed by a Bitcoin treasury.
Ricki Lee:
Well, thank you both again so much for joining us on this episode of Expert Exchange.
Roy, my first question is for you. Bitcoin has seen dramatic drawdowns before — 30, 40, even 50 per cent during broader bull cycles. This current move feels fast and intense though. From your perspective, is this different or just another chapter in Bitcoin’s historical volatility?
What’s driving Bitcoin’s latest downturn?
Roy Kashi:
I think it’s broadly in line with the DNA we’ve seen in how Bitcoin has traded over the last 10 years.
As there’s more leverage in the system and it’s become more institutionalised with ETFs and different mechanisms to access Bitcoin, the moves can become more exaggerated — faster and harder.
But the premise is still there. When things are going up, everyone piles in and thinks it’s the best asset in the world. When it’s going down, everyone thinks it’s terrible.
Add leverage into that and you get the exaggerated moves we’re seeing today.
That said, it does feel like we’re starting to see a floor forming over the past couple of weeks. It feels like we might see some range trading before it takes off again, but that’s just my personal opinion.
Ricki Lee:
Are we looking at retail capitulation here, institutional repositioning, macro-driven deleveraging or a combination of all three?
Roy Kashi:
I think it’s definitely a combination of all three.
Retail tends to react first, which triggers momentum selling.
You saw the Jane Street news last week and around the same time every day you saw downward moves. That had an effect and ties back to institutional flows and leverage in the system.
For such a liquid asset, you’re still able to manipulate volatility to an extent.
For investors who saw Bitcoin move from around 125 to where it is now, I understand that pain. But for us it’s a long-term asset and an opportunity to accumulate at lower levels.
From the FalconEdge side, we’re thinking about next year, the year after and the next decade.
How leverage and market structure amplify Bitcoin volatility
Ricki Lee:
Scott, from a market structure standpoint, when you see a move accelerate this quickly, what typically amplifies volatility? Is it leverage, thin liquidity pockets or algorithmic trading?
Scott Ellam:
We focus on the long term.
When I first started a Bitcoin balance sheet in 2021 the price was around 51,000. Shortly after it went up to about 61,000 and then we had an 80 per cent drawdown triggered by a third party outside Bitcoin.
Any volatility or amplification tends to come from third parties. Bitcoin itself continues exactly as designed — every block, every 10 minutes, the same supply schedule forever.
It’s human nature that causes volatility.
That sharp drawdown recently felt like leveraged sellers cascading through the system until a floor was found.
That sort of deleveraging is actually healthy for the asset class. It rewards those who aren’t leveraged and who are buying consistently and holding over the long term.
Ricki Lee:
Bitcoin trades 24-7 across multiple venues globally and often with significant leverage involved. Structurally speaking, what makes Bitcoin more prone to violent swings compared to traditional assets?
Scott Ellam:
Bitcoin’s market cap is still far smaller than gold.
But what we’re witnessing from 2009 until today is the birth of a global reserve asset.
If gold had been discovered in 2009, its price chart during adoption would likely look similar.
When you zoom out and look at a 200-week moving average, Bitcoin trends upward. In the short term it might move five thousand dollars up or down in a day, but this asset needs to be viewed from a time horizon perspective rather than timing the market.
Is Bitcoin still seen as a ‘risk-on’ asset by institutions?
Ricki Lee:
Roy, from a portfolio allocation perspective, what tends to trigger institutions to pull back risk?
Roy Kashi:
Unfortunately Bitcoin is still viewed as a risk-on asset rather than a risk-off asset.
Gold and silver are still considered safe havens where investors run during uncertainty.
In my opinion that’s the wrong view.
If you’re looking for an asset with a finite supply that allows you to store wealth securely and transfer it globally, Bitcoin is unmatched.
Yet many investors still believe Bitcoin could go to zero simply because they can’t physically see it like gold.
That tells me we’re still very early.
Bitcoin as portable wealth: the overlooked use case
Scott Ellam:
Roy made a great point there.
Very few people truly understand Bitcoin. Maybe half a per cent of the population at most.
It can take ten hours of serious study just to understand the incentives, mining, supply caps and how to hold it securely.
One use case people overlook is portability.
If someone had to flee a country during currency collapse or political crisis, Bitcoin allows them to take their wealth with them.
You can memorise twelve words and carry millions across borders in your head.
That’s a powerful use case that traditional assets can’t replicate.
Ricki Lee:
Scott, for investors watching this unfold, what’s the difference between volatility and structural risk?
Scott Ellam:
Structural risk would involve something changing in Bitcoin’s fundamentals — the supply schedule, network security or transaction validation.
Those things are extremely unlikely to change.
Volatility, on the other hand, is driven by human emotion, leverage and trading activity.
Bitcoin itself just continues operating exactly as designed.
Every ten minutes a new block verifies the network regardless of what the price is doing.
Ricki Lee:
Thank you both so much for your insights today. You actually answered all of my questions without me even having to ask them.
And to our viewers, let us know your thoughts in the comments. Is this panic positioning or opportunity?
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