Dividend Fund Trap Revealed: How Bitcoin Market Predictions Shift from Consensus to Crisis

2025年 Bitcoin market staged a grand “face-slapping” show for the entire industry. At the beginning of the year, almost all mainstream institutions were promoting dividend funds and Bitcoin investment products, predicting BTC would surge above $150,000 by year’s end. But reality was cruel—dropping from the October high of $126,080 to today’s $89,320, a decline of over 33%, with November alone down 28%. By January 2026, Bitcoin continued to decline, and the past 12 months’ gains and losses turned negative to -12.60%. Those “sure-win” dividend funds and institutional forecasts have now become the most painful traps for investors.

This collective mistake reflects a deeper issue: the rise of new financial products like dividend funds fundamentally embodies conflicts of interest and information asymmetry. When institutions are both product issuers and market analysts, their aggressive forecasts often serve sales goals rather than market realities.

Hidden Traps in Dividend Fund Design

The popularity of dividend funds in the crypto market mirrors the “promised return” model of traditional financial products. The difference this time is that the promise was based on the assumption that Bitcoin would inevitably rise—an assumption that was completely shattered in 2025.

Institutions like VanEck, Standard Chartered, Fundstrat predicted Bitcoin would break through $150,000 to $250,000 by year-end. These aggressive target prices are not purely market analysis but core supports for dividend fund sales strategies. When analysts say “Bitcoin must rise to $250,000,” investors have a reason to keep pouring in funds. But when Bitcoin falls 30% within the lock-up period of a dividend fund, the “professional forecasts” of these institutions become tools to “trap investors.”

The fundamental problem is that conflicts of interest are everywhere. VanEck issuing Bitcoin ETF products faces a conflict—being bearish could threaten their own business; Standard Chartered providing crypto custody services and issuing pessimistic reports essentially tell clients “don’t use our products”; analysts like Tom Lee mostly serve clients who entered at high levels of $80,000–$100,000, relying on “over $150,000” targets to justify their decisions.

Under such structural pressure, aggressive forecasts become inevitable. The essence of the dividend fund trap is that institutions leverage their authority and information advantage to transfer the risks that should belong to the market onto retail investors.

Consensus Turning into a Trap: When the Market Is Uniformly Bullish

In early 2025, market consensus appeared unprecedentedly unified. Of 11 mainstream institutions, 9 set target prices above $150,000, forming a highly homogeneous forecast ecosystem. On the surface, this “professional consensus” seemed to boost confidence; fundamentally, it became the biggest trap.

When 90% of analysts tell the same story, that story has already been “priced in”—meaning everyone knows the “good news,” and prices have already reacted in advance. The market needs “unexpected” outcomes, not “as expected.” But dividend fund investors are often told “the good news has been confirmed,” rather than “surprise is coming.”

More critically, once consensus forms, no one dares to voice dissent. Analysts who saw problems early on remain silent, with only a few contrarians (like MMCrypto) warning of a collapse risk in advance. But these voices seem insignificant against the mainstream narrative, and dividend fund investors have been thoroughly convinced by the “professional consensus.”

By November 2025, ETF net outflows reached $3.48–$4.3 billion, turning what was seen as “certain good news” into a flight of capital. Investors suddenly realize: the first layer of the dividend fund trap is the consensus itself. When the market is uniformly bullish, it often indicates that the upward potential has been fully priced in, while the systemic neglect of downside risks persists.

Cycle Pattern Failures: Why History No Longer Serves as a Reference

Institutions firmly believe in the historical pattern that “Bitcoin must rise 12–18 months after halving.” After 2012 halving, it rose to $1,150 in 13 months; after 2016 halving, it broke $20,000 in 18 months; after 2020 halving, it hit $69,000 in 12 months—these facts are used as ironclad laws. But what dividend fund investors don’t realize is that these patterns depend on a common premise: ample liquidity.

The macro environment in 2025 is fundamentally different from past cycles. The Federal Reserve’s shift from an initial expectation of 4–6 rate cuts (93% probability) at the start of the year to a stance of maintaining high interest rates (38% probability of cuts in November) marks a sharp reversal in monetary policy—something never seen in previous halving cycles.

Even more deadly is that the original cycle analysis completely ignores a key variable: real interest rates. When risk-free yields stay high at 4–5%, the attractiveness of zero-yield assets like Bitcoin diminishes systematically. Dividend funds attract investors by promising “additional returns” on top of Bitcoin’s appreciation, but when the underlying asset begins to decline, these dividend promises immediately become empty words.

The failure of historical patterns stems from a fundamental change in the environment. Institutions treat “cycles” as deterministic laws, essentially using past maps to explore new terrains. The second layer of the dividend fund trap lies in this overconfidence in historical regularities.

Misjudging Asset Attributes and the Risks of Dividend Funds

For decades, the market has habitually compared Bitcoin to “digital gold,” viewing it as a hedge against inflation. But 2025 data slapped this narrative in the face—Bitcoin’s performance is more akin to Nasdaq tech stocks, highly sensitive to liquidity, and lacking the safe-haven properties of gold.

When the Federal Reserve maintains a hawkish stance and liquidity tightens, Bitcoin exhibits high beta characteristics (volatility far exceeding the market average). Dividend funds are designed based on the mistaken positioning of Bitcoin as a “hedging asset.” Investors are told Bitcoin is a risk hedge, but in reality, it is becoming risk itself.

A deeper contradiction is that dividend funds promise stable returns while Bitcoin’s inherent high volatility conflicts with this. In low-interest-rate environments, this contradiction is masked—since bank savings yield little, it’s tempting to gamble. But when real interest rates reach 4–5%, opportunity costs rise sharply. Why take on a 30% downside risk for a 5% promised return from a dividend fund?

This is the third layer of the dividend fund trap: systemic misjudgment of asset attributes. When the environment changes, these traps tend to explode simultaneously.

Lessons from the Dividend Fund Trap for Investor Protection

The collective failure of 2025 offers a clear warning: the dividend fund trap is fundamentally a product of information asymmetry and conflicts of interest, not a failure of market prediction.

The reason institutions uniformly turn bullish is not because they hold secret information, but because their roles force them to see the market optimistically. VanEck, Tom Lee, Standard Chartered, as issuers and sellers of dividend funds, their “forecasts” are essentially marketing tools.

True investment wisdom lies in recognizing this reality: use institutional research reports to understand what the market is thinking, but don’t let them dictate your actions. When VanEck, Tom Lee, and others collectively turn bullish on dividend funds, your question should not be “Are they right?” but “What if they are wrong?”

The lesson from 2025 is harsh—if institutions are wrong, dividend fund investors will suffer total losses or see their returns sharply shrink. Today, Bitcoin has fallen from $126,080 to $89,320, and most early investors locked into dividend funds are now deeply trapped by this decline.

Conclusion: The Dividend Fund Trap and Long-term Survival Rules

The collective misstep of 2025 is not a probabilistic event but an institutional one. When products like dividend funds become mainstream, conflicts of interest become inevitable. The larger and more reputable the institution, the greater the bias—because conflicts of interest grow with size.

The clear lesson from this crisis: precise prediction is a false proposition. Bitcoin is influenced by macro policies, market sentiment, technical factors, and many variables; no single model can capture this complexity. Dividend funds attempt to simplify this complexity into “stable returns,” which is fundamentally misleading.

Investors who remember this lesson should keep three bottom lines in mind:

1. Independent thinking always takes precedence over authoritative following. When all institutions promote dividend funds, it’s the moment to scrutinize risks.

2. Contrarian voices are often more valuable than mainstream consensus. In 2025, the only accurate prediction of a collapse came from niche analyst MMCrypto, not top-tier institutions.

3. Risk management always outweighs return forecasts. The fatal flaw of dividend funds is that they promise returns while completely ignoring risk management.

Long-term survival in the crypto market depends on these three principles. Dividend funds may have a future, but only investors who remain vigilant about risks and skeptical of institutions can fully escape the next trap when it arrives.