The problem is people buy but rarely actually use bitcoin. This means the price collapses whenever a major holder tries to cash in.

The basic math is you only get a net ROI across all users when someone derives some value from the act of using bitcoin. As a currency that’s either from efficient transactions or as a stable store of value. Otherwise it’s an inefficient pyramid scheme where case inflows = cash outflows - mining costs.

PS: By contrast bonds can retain a high percentage of their value after a massive sale because they become more appealing as the price drops as they have some underlying value.

Well frankly that in itself should be be a huge red flag to the buyers as it doesn't add up.

Everybody who does the math gives stock investors shit for doing worse than random strategy but then you see what the amateurs do when they play at "investing" (really speculation but it is considered rude to call it what it really is) like beanie babies or baseball cards. And even they are geniuses compared to those who try lotto tickets, race tracks, and slot machines.