This article is available in Spanish.
In the latest episode of The Milk Road Show, Charles Edwards, founder of crypto hedge fund Capriole Investments, explains as long as an in-depth analysis of Bitcoin’s current state, its future trajectory, and the possible conclusion of the traditional four-year Bitcoin cycle.
Edwards argues that Bitcoin’s journey to $100,000 could be the catalyst for unprecedented price acceleration. He suggests that once this psychological and technical barrier is broken, Bitcoin could double in value within weeks. Drawing parallels to gold’s recent performance, Edwards said: “If you look at gold this year, it’s up 33% in 16 weeks – that’s a $3.8 trillion move in a very old asset. If Bitcoin goes from $100,000 to $200,000, that is just $2 trillion in assets traded 24/7 and more accessible globally.”
He emphasizes that Bitcoin’s relatively smaller market capitalization compared to gold allows for faster price movements. Historically, after surpassing previous all-time highs, Bitcoin has experienced significant and rapid appreciations, entering periods of price discovery where supply constraints can lead to vertical price increases.
When will the Bitcoin price double?
The amount of $100,000 is not just a round number; it represents a significant level of resistance due to several factors. Edwards highlighted the presence of a substantial sell wall at this price level, noting: “We have the largest sell wall we have ever seen on the order books for Bitcoin at $100.00. I think once that’s cleared up, you know that everyone who wanted to sell has sold and you get very sharp, rapid vertical price increases because there’s just no more supply.”
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Additionally, many investors entering the market at lower prices may see $100,000 as an optimal point to realize profits, potentially creating selling pressure. However, Edwards remains optimistic that this barrier will be overcome, especially in the coming months, given the seasonal strength seen in Bitcoin’s price movements in the fourth and first quarters.
“We are [at a point] in the cycle in which we are seasonal and this resembles the optimal period of two to four months, […] perhaps a period of five to six months every four years. After each halving every four years you have about 12 to 18 months where you get 90% to 95% of all the cycles back every four years. So most of it happens in that one year alone. If you look at the fourth and first quarters, that’s again the bulk of the returns […] once you have a strong monthly breakout above all,” said the hedge fund CEO.
While Edwards is optimistic about Bitcoin’s prospects, he cautions investors about the market’s inherent volatility. He pointed out that corrections of 20% to 30% are normal during bull markets and investors should be prepared for such swings. “It is normal to have a 30% drop every few months in a Bitcoin bull market,” he noted.
Factors such as increasing market leverage can exacerbate price fluctuations. Edwards said that if leverage and funding rates continue to rise without breaking the existing sell-off wall, Bitcoin could once again move towards lower support levels, possibly around $80,000. However, he emphasizes that such volatility is a natural part of Bitcoin’s growth cycle and is not necessarily indicative of a long-term downturn.
The end of the traditional four-year cycle?
A major point of discussion has been whether the traditional four-year cycle, largely driven by the halving events, is nearing its end. Edwards believes that as Bitcoin matures and integrates more deeply with traditional financial systems, the impact of the halving on market cycles will diminish.
“As Bitcoin’s inflation slows and it becomes more integrated with traditional finance, the four-year halving cycles may become less impactful. The large 80% declines we have seen in the past may not occur again in future cycles,” he said.
This maturation process could lead to more stable growth patterns and reduced volatility. Edwards suggests that future cycles may see shallower corrections, possibly around 60%, rather than the dramatic declines of previous years.
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Notably, there are several potential catalysts that could push Bitcoin’s price to unprecedented levels. Edwards mentioned the possibility of the US government establishing a strategic Bitcoin reserve under newly elected President Donald Trump.
While he puts the likelihood of this happening by 2025 at about 30%, he acknowledges that such an event would be a game changer. ‘Accepted [the U.S. government] Not selling their existing assets is great, but it probably won’t help the cycle much. Actively buying Bitcoin could be a game changer,” he noted.
corporate adoption is another important factor. The potential for large companies to add Bitcoin to their balance sheets could drive substantial demand. Edwards highlighted Microsoft’s upcoming vote on the issue, saying, “Let’s hope it’s Microsoft [on December 10].”
Furthermore, the success of spot Exchange-Traded Funds (ETFs) has opened the doors to institutional investors. The continued demand from ETFs has steadily absorbed Bitcoin supply. Edwards noted, “The ETFs just violently sucked Bitcoin out of the system.”
Bitcoin price predictions
Edwards provided a foundation and an optimistic scenario for the Bitcoin price in this cycle. He said, “I’d be surprised if we don’t reach $140,000.” This base scenario assumes stable market conditions without extraordinary positive events.
In a more optimistic scenario, he believes Bitcoin could reach $200,000, especially if major catalysts such as government or corporate adoption materialize. “We could easily reach $200,000. Once we reach these all-time highs, Bitcoin will make multiples very quickly,” he explained.
He concluded: “Once we get above $100,000, people who aren’t into Bitcoin just can’t understand Bitcoin above $100,000. […] Then you see the real switch and the flows happening.”
At the time of writing, BTC was trading at $94,814.
Featured image created with DALL.E, chart from TradingView.com