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On a recent episode of The Milk Road Show, Charles Edwards, founder of cryptocurrency hedge fund Capriole Investments, said, available An in-depth analysis of Bitcoin’s current state, its future path, and the likely outcome of the traditional 4-year Bitcoin cycle.
Edwards posits that Bitcoin’s journey to $100,000 could be a catalyst for an unprecedented price acceleration. He points out that once this psychological and technical barrier is breached, Bitcoin’s value will likely double within weeks. Compared 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 really old asset. For Bitcoin to go from $100,000 to… $200,000, that would mean just $2 trillion on an asset that is traded 24/7 and is much more globally accessible.
He asserts that Bitcoin’s relatively smaller market cap compared to gold allows for faster price movements. Historically, after surpassing previous all-time highs, Bitcoin has seen significant and rapid rallies, entering periods of price discovery where supply constraints can lead to vertical price increases.
When will the price of Bitcoin double?
The $100,000 mark isn’t just a round number; It represents a major resistance level due to several factors. Edwards highlighted the presence of a large sell wall at this price point, noting: “We have the largest sell wall we’ve ever seen on the Bitcoin order books at $100,00. I think once you clear that up, that’s when you know everyone who wanted to sell has sold out.” And you have sharp, rapid vertical price movements because there is no more supply.”
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In addition, many investors who entered the market at lower prices may view $100,000 as an ideal point for making profits, which can create selling pressure. However, Edwards remains optimistic that this barrier will be crossed, especially over the next few months, given the seasonal strength observed in Bitcoin price movements during Q4 and Q1.
“We are (at some point) in the cycle where we are seasonal and that’s kind of like the ideal period of two to four months, (…) maybe a period of five to six months every four years. After every half every four years , you have about 12 to 18 months where you get 90% to 95% of all the returns every four years so most of that happens in that year alone if you look at Q4 and Q1, that’s again the majority of returns (… ) once you get a monthly breakout Strong beyond all times,” said the hedge fund CEO.
While Edwards is optimistic about Bitcoin’s prospects, he cautions investors about the inherent volatility of the market. He pointed out that corrections ranging from 20% to 30% are considered normal during bull markets, and that investors must prepare for such fluctuations. “It is normal to have 30% drawdowns every few months in a Bitcoin bull market,” he noted.
Factors such as increased market leverage can exacerbate price volatility. Edwards stated that if leverage and funding rates continue to rise without clearing the current sell wall, Bitcoin may reconsider lower support levels, which could reach around $80,000. However, he stresses that such volatility is a normal part of Bitcoin’s growth cycle and does not necessarily indicate a long-term decline.
The end of the traditional four-year cycle?
An important point of discussion was whether the traditional four-year cycle, driven largely by the events of the halving, had come to an end. Edwards believes that as Bitcoin matures and becomes more deeply integrated with traditional financial systems, the impact of halving on market cycles will diminish.
“As Bitcoin’s inflation rate declines and it becomes more integrated with traditional finance, four-year halving cycles may become less impactful. The large 80% drawdowns we have seen in the past may not occur in future cycles,” he stated.
This maturation process can lead to more stable growth patterns and reduced fluctuations. Edwards notes that future sessions may see shallower corrections, perhaps around 60% rather than the large declines seen in previous years.
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Notably, several potential catalysts could push Bitcoin’s price to unprecedented levels. Edwards mentioned the possibility of the US government creating a strategic reserve of Bitcoin under President-elect Donald Trump.
Although he estimates the probability of this happening in 2025 at about 30%, he admits that such an event would change the rules of the game. “The assumption that (the US government) doesn’t sell its existing holdings is great, but it probably won’t help the cycle much. Actively buying Bitcoin could be a game-changer,” he noted.
Corporate accreditation is another important factor. The possibility of major companies adding Bitcoin to their balance sheets could lead to increased demand. Edwards highlighted the upcoming vote by Microsoft on the matter, saying: “Let’s hope Microsoft (on December 10).”
Furthermore, the success of exchange-traded funds (ETFs) has opened doors for institutional investors. The ongoing demand from ETFs has been steadily absorbing the supply of Bitcoin. “ETFs are just ferociously sucking Bitcoin out of the system,” Edwards noted.
Bitcoin price forecast
Edwards presented a fundamental and optimistic scenario for the Bitcoin price in this session. “I’d be surprised if we didn’t get to $140,000,” he said. This base case assumes stable market conditions without any unusual positive events.
In a more optimistic scenario, he believes Bitcoin could reach $200,000, especially if large catalysts, such as government or corporate adoption, are achieved. “We could easily hit $200,000,” he explained. “Once we cross those all-time highs, Bitcoin doubles them very quickly.”
He concluded by saying: “Once we get above $100,000, people who are not using Bitcoin can’t understand that the price of Bitcoin is above $100,000 (…) That’s when you see the real switch click and the flows happen.”
At press time, Bitcoin was trading at $94,814.
Featured image created with DALL.E, a chart from TradingView.com