What Comes After Bitcoin's Latest Cycle Ends?

TL;DR

Bitcoin's latest cycle may be ending, but that does not necessarily imply another multi-year bear market. The prior advance was supported by DAT buying, strategic reserve expectations, and record ETF flows, while the next mini-cycle could be triggered by renewed liquidity, currency debasement, or the AI energy race. Until then, the market may remain focused on finding a floor.

Transcript

So, the crypto cycle may be over and before you start leaving angry comments and claiming it's clickbait, I've got a thesis that I want to run you through in today's video and we have a very special guest who's joining us, Fabian, who you might know from the Discord. He's amazing on the macro side. I actually found him back in 2023 for his macro co... Read More

Key Insights

• Bitcoin is increasingly behaving like a macro asset whose direction depends on liquidity flows, broader risk markets, and changing narratives. This framework replaces the assumption that every cycle must follow a fixed four-year schedule or produce a prolonged bear market after its peak.
• The recently completed Bitcoin cycle was supported by DAT buying, strategic Bitcoin reserve expectations, and record ETF flows. Those forces became reflexive on the way up, but their reversal is now contributing to fear, weaker sentiment, and downside pressure across the crypto market.
• A finished cycle does not automatically mean a multi-year crypto winter. A new mini-cycle could begin within weeks or months if liquidity expands or another macro catalyst appears, with currency debasement and the AI energy race identified as possible drivers.
• Bitcoin often leads turning points in equities because it is a lower-volume, lower-liquidity asset further down the risk curve. It led previous equity advances and began selling on October 6 before equities weakened, eventually falling about 30% during the period discussed.
• The selloff is primarily described as macro-driven deterioration that crypto-specific problems have intensified. Leverage removal, the October 10 liquidation event, DAT fears, material selling, and possible hidden financial damage have created a reflexive decline that is sharper than the move in equities.
• The four-year cycle can still influence short-term and medium-term behavior as a self-fulfilling expectation. Investors may take profits near an anticipated cycle peak, but the discussion argues that macro conditions become more important when evaluating Bitcoin over the following 6 to 12 months.
• MicroStrategy was not considered close to being forced to sell its Bitcoin during the discussion. The company had previously traded below one times MNAV without capitulating, although the speakers acknowledged that a forced-sale threshold could exist under more severe future conditions.
• The key market question is whether Bitcoin will outperform or underperform other macro assets such as equities and gold. Even if a bearish period develops, the speakers expect Bitcoin's broad cycle to follow major macro asset classes more closely than historical crypto-cycle templates suggest.

Questions & Answers

Q: Why might Bitcoin's latest crypto cycle be over?

Bitcoin's latest cycle may be over because the forces that supported it are fading or reversing. The speakers identify DAT buying, strategic Bitcoin reserve expectations, and record ETF flows as the defining drivers of that phase. As the DAT trade unwinds and sentiment weakens, the same reflexive dynamics that pushed prices higher can operate in reverse and intensify selling pressure.

Q: Does the end of the Bitcoin cycle mean a multi-year bear market?

The end of the current Bitcoin cycle does not necessarily imply a multi-year bear market. The discussion treats Bitcoin as a macro asset that can experience shorter mini-cycles driven by liquidity and narratives. A fresh catalyst could potentially arrive within weeks or months, rather than requiring another four-year wait, although the market must first stabilize and find a floor.

Q: What could trigger Bitcoin's next mini-cycle?

Bitcoin's next mini-cycle could be triggered by renewed macro liquidity, currency debasement, or investment connected to the AI energy race. The central requirement is a new flow of capital or a compelling narrative that replaces the fading DAT, ETF, and strategic reserve themes. The speakers do not give a confirmed timing, but suggest a trigger could emerge within weeks or months.

Q: Why did Bitcoin sell off before equities?

Bitcoin may have sold off before equities because it is a lower-volume, lower-liquidity asset positioned further down the risk curve. Market turning points often appear at the fringes first, allowing Bitcoin to lead both advances and declines. The transcript says Bitcoin began falling on October 6 and declined about 30%, while equities initially outperformed before they also started weakening.

Q: What factors intensified Bitcoin's selloff?

The decline was intensified by a combination of macro deterioration and crypto-specific pressures. The speakers mention leverage leaving the market, damage from the October 10 liquidation event, fears surrounding the DAT trade, material selling visible in order books, and repeated weakness around the US open. These factors created reflexive selling and made Bitcoin fall more aggressively than equities.

Q: Is the traditional four-year Bitcoin cycle still useful?

The four-year cycle may remain useful as a short-term or medium-term behavioral signal because market participants can make it self-fulfilling by taking profits near an expected peak. However, the speakers reject it as the primary long-term framework. Over a 6 to 12 month horizon, they believe macro liquidity and broader risk-asset conditions are more important drivers of Bitcoin.

Q: Could MicroStrategy be forced to sell its Bitcoin?

MicroStrategy was not considered close to the point where forced Bitcoin sales would be necessary. The discussion notes that it had previously traded below one times MNAV during an earlier bear market without capitulating, despite similar warnings. The speakers acknowledge that a threshold for forced selling could exist, but they do not believe current conditions had reached it.

Q: How should investors interpret Bitcoin as a macro asset?

Viewing Bitcoin as a macro asset means evaluating it through liquidity, risk appetite, broader equity movements, and changing capital-flow narratives instead of relying only on a fixed crypto calendar. The relevant question becomes whether Bitcoin will outperform or underperform equities and gold. This approach also allows for multiple mini-cycles without assuming every downturn must resemble the extended bear market of 2022 and 2023.

Summary & Key Takeaways

• The central thesis is that Bitcoin should now be viewed as a macro asset moving through narrative-driven mini-cycles, rather than an asset mechanically governed by a four-year schedule. The cycle powered by DAT purchases, strategic Bitcoin reserve expectations, and record ETF flows appears finished, but another catalyst could emerge within weeks or months.

• Bitcoin began weakening before equities, just as it had previously led equity rallies. Fabian attributes this behavior to Bitcoin being a lower-liquidity asset positioned further down the risk curve, where market turns often appear first. Its roughly 30% decline reflects macro deterioration amplified by crypto-specific leverage, liquidations, selling, and deteriorating sentiment.

• The immediate task is identifying a market floor while monitoring macro liquidity and crypto-specific vulnerabilities. Possible pressures include the DAT trade unwinding, consequences from the October 10 liquidation event, sustained selling around the US open, miner selling, ETH DAT pressure, and altcoin capitulation. Large treasury companies were not considered forced sellers at that point.