Is the 2025 Bitcoin Crash Starting?

Hey There,

Bitcoin ETF investments have now surged past $100 billion.

Major U.S. asset managers have gone on an unprecedented buying spree.

This massive institutional interest has pushed Bitcoin beyond its previous all-time high of $70,000, with a stunning 40% gain in less than 50 days.

We've seen this movie before though.

In February 2017, Bitcoin broke above $11,000 and soared 200% in just 100 days.

The same happened in December 2020 - a break above the previous highs of around $19,000 was followed by a 200% surge in just 100 days.

If history repeats today, and Bitcoin rises 200% over the next 100 days, its chart might look something like this.

So, is that what lies ahead?

Well, Bitcoin's price action follows a clear pattern on the log scale.

A parabolic rally bring extraordinary returns, which are often unsustainable.

These bubbles then pop, as price retraces sharply.

Then, Bitcoin bases for sometime before starting a new parabolic run-up.

Today, we're undeniably in the parabolic stage.

While most market participants recognize this recurring cycle, timing these moves remains challenging.

The key question isn't just whether Bitcoin will continue higher, but where and when will this move will end.

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2 Key Bitcoin Drivers

The current Bitcoin rally stems from 2 fundamental factors.

First, the new U.S. Administration's favorable stance on cryptos promises more support.

Second, and more importantly, Wall Street's accelerating adoption of Bitcoin, particularly through the new ETF vehicles, which is driving prices higher.

BlackRock, the world's largest asset manager, now recommends a 2% Bitcoin allocation.

For perspective: global assets total about $900 trillion, with gold representing 2% at $18 trillion market cap.

Bitcoin's current $1.4 trillion market cap suggests massive growth potential.

In fact, a similar 2% global allocation for Bitcoin would potentially push Bitcoin’s market cap to $18 trillion and its price to $1.3 million per BTC.

Learning from Gold's ETF Journey

When the first gold ETF ($GLD) launched in November 2004, gold's market cap was around $2 trillion, similar to Bitcoin today.

Gold's ETF launch marked a crucial moment when institutional money could finally access the asset without dealing with physical storage.

What followed was remarkable: a 300% price surge over 6 years.

Bitcoin ETFs serve the same function today, potentially unleashing similar long-term price appreciation.

If Bitcoin mirrors gold’s post-ETF performance, it could mean that Bitcoin's bull market might last multiple years with healthy pullbacks along the way.

Bitcoin ETFs currently own 1.15 million Bitcoin, and still accumulating about 3,000 BTC daily.

At this pace, Bitcoin could surge another 50% in 50 days.

However, even a slight slowdown in ETF buying could trigger a decline.

For instance, in March 2024 Bitcoin prices fell by 30%, even though ETFs were still buying.

So, March 2024 was a great time to sell, despite Bitcoin ETFs still accumulating.

Bitcoin Warning Signs

Back in March of 2024, we had closed all crypto positions. We’ve done the same now in December.

Why?

Well because Bitcoin is forming a head and shoulders pattern, which is a common sign of a local top forming.

Additionally, while U.S. stocks have entered correction mode, Bitcoin has remained resilient.

This is the exact opposite of September 2024's setup, when stocks hit new highs while Bitcoin struggled.

Back then, Bitcoin eventually caught up to stocks' strength.

Now, we might see Bitcoin catch down to stocks' weakness.

If Bitcoin corrects, we’d look to buy the dip around $80,000 for the next leg higher.

However, we maintain flexibility in our strategy.

If Bitcoin shows continued strength, we'll adjust our short-term outlook accordingly.

This adaptable approach has helped us yield extraordinary crypto profits in 2024, while keeping losses small.

We've made some incredible trades in 2024:

• Average profit = 16.61%
• Average loss = 3.52%

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