Compiled & Organized by: Deep Tide TechFlow

Guest: Michael Terpin (Founder and CEO of Transform Ventures, author of "Bitcoin Supercycle")

Hosts: David Lin, Bonnie Cheung

Original title: Is shorting Bitcoin the right move? Cryptocurrency guru: This price level is the last line of defense!

Podcast source: Bonnie Blockchain

Broadcast date: May 14, 2026

Editor's Note

In this podcast episode, Michael Terpin makes a bold prediction: the 60K level is most likely not the true bottom of this cycle, and the 2 to 1 odds tend to continue to decline to the 48K–57K range, with the time window pointing to October of this year.

Terpin, dubbed the "Godfather of Crypto" by CNBC and a frequent guest at Saylor's private events, revealed the inside story of Saylor's shift in thinking: The 11.5% dividend pressure on STRC means Strategy must maintain an "escape valve" for selling tokens to cover losses; this isn't a strategic shift but rather a consequence of the funding structure. Furthermore, he maintained his long-term goal of Bitcoin reaching $1 million by 2033 and asserted that AI tokens will outperform Bitcoin in the next three years. He also predicted that the real threat to quantum computing isn't BTC but smart contracts on Ethereum, and that Satoshi aligning the halving cycle with the US election was no coincidence.

Essential Quotes

Saylor shifts towards STRC financing structure

"The reason Saylor is now leaving room to sell tokens to pay dividends when needed is essentially because his funding targets have changed. STRC has become a product driven by both retail and institutional investors. The 11.5% dividend is almost three times the yield on government bonds, and he must prove that he can pay dividends in extreme circumstances."
"Saylor's goal is to gradually increase monthly purchases from the current level to $10 billion, $100 billion, $1 trillion, and $10 trillion. It's uncertain whether $10 trillion can be reached, but $10 billion in monthly purchases is achievable in the foreseeable future. This is enormous buying pressure, essentially setting a floor for Bitcoin's price drop."
"Each time he buys over the OTC market, he doesn't immediately drive up the price; instead, he does so surprisingly gently. OTC markets are essentially channels used to conceal buying and selling activities."

October bottom theory

"We now have about a 60% chance that it will continue to decline, targeting the 48K-57K range. But unlike my assessment in February, I don't think it will fall below 40K now. The buffer provided by STRC and ETFs has already raised the lower limit."
"Historically, each bottoming process takes about a year: the last one took a full year, the one before that took three days to a full year, and the first halving cycle took a year and a few weeks. If this cycle ends in 12 weeks, it means that a large number of historical patterns will fail simultaneously, which is a very low probability."
"The Coin Days Destroyed indicator points to a bottom around 42K, and it has been accurate in every previous cycle. Combined with the 23-month [first high to bottom] and 35-month [bottom to top] empirical values, all three independent indicators point to October as the bottom."
"The main sellers now are not whales; whales sold off their shares back in September, October, and November of last year. Most of today's selling pressure comes from margin calls. With the widespread use of perpetual contracts and 100x leverage tools, retail investors are being liquidated in far more ways than they were four years ago."

Supercycles, Diminishing Returns, and Satoshi's Design Intent

"From 1/10 of a cent to $30 is 3,000 times, the second round is 100 times, the third round is 30 times, and the fourth round was originally expected to be 10 times, but due to macroeconomic headwinds, it only went about 8 times. The returns decrease logarithmically and the declines converge arithmetically. This is the true mathematical structure of the halving cycle."
"A supercycle must meet two conditions: it must last for more than 5 years and the core narrative of assets must undergo a fundamental change. CME suggested in 2023 that currency devaluation might trigger a new commodity supercycle, but by 2025 the answer was clear."
"I don't think it's a coincidence that Satoshi aligned the halving with the US election. Every halving happens around an election year, and bear markets tend to occur in midterm election years. This shows that he has a very precise understanding of economic rhythms."

The relationship between quantum threats, AI tokens, and Bitcoin

"Quantum computing is still 15 to 20 years away from truly cracking Bitcoin. Before that, attackers will target other SHA-256 targets—defense, hospitals, banks, etc. Cracking Satoshi's wallet is much harder than cracking JPMorgan Chase."
"What I'm really worried about isn't quantum cracking of Bitcoin, but rather that some cutting-edge AI model (like the Mythos-level model that OpenAI wouldn't dare release) falls into the wrong hands and breaks a crucial smart contract on Ethereum, such as Lido, a protocol that has a massive amount of ETH staked. That would be the potential FTX moment of this round."
"Over the next three years, leading AI tokens will outperform Bitcoin. A significant portion of these funds will eventually flow back to Bitcoin, and with stablecoin users now having wallets for the first time, the transaction costs of entering Bitcoin have been greatly reduced."

Jane Street Selling and Wall Street Play

"It has been widely reported that Jane Street systematically sold off Bitcoin and simultaneously established short positions half an hour after the US stock market opened. I don't have direct evidence, but the price rose after this operation stopped, which in itself is a kind of confirmation."
"The classic strategy of the whale era was: buy heavily on the OTC market, short sell on smaller exchanges, use arbitrage bots to drive down the market price, and then profit from both short covering and OTC discounts. This strategy has existed in the gold market for a long time, and now Wall Street has brought it to Bitcoin."

Saylor's strategic shift

Host David: Welcome back to the show. We're back at Consensus Miami, and we're excited to have Michael Terpin with us for the second time in a year. Michael is the author of "Bitcoin Supercycle," dubbed the "Godfather of Crypto" by CNBC, and the founder and CEO of Transform Ventures. Today we'd like to hear his thoughts on where Bitcoin is headed next.

Host Bonnie: Michael, we'll be talking about the direction of Bitcoin in a bit, but could you please answer an immediate question first—what's your take on Saylor's strategy shift? I know you're a major investor in STRC; you talked to us about it three months ago.

Michael Terpin: He himself said it wasn't a shift, but rather related to his current funding sources. I've discussed this with Saylor many times, and I've always maintained that if your goal is to hold more Bitcoin long-term, you should sell at the top and buy back at the bottom. That's the core argument in my book, and that's what my fund does.

Saylor told me about two years ago that if he made any move that wasn't a "buy forever" commitment, Wall Street buyers would suspect his arguments had changed and wouldn't write him checks unconditionally anymore. Back then, he was financing institutional buyers through preferred stock and other instruments. But STRC has changed; it's now a product driven by both retail and institutional investors.

The market's current concern is how he'll pay the 11.5% dividend. That's almost three times the yield on Treasury bonds, but still relatively safe. He has to prove he can sell Bitcoin to pay the dividend, but that doesn't mean he actually will. Historically, Treasury companies have been forced to sell their tokens because their boards were in crisis and the market had bottomed out. This isn't the case for Saylor. He and Strategy are staunch long-term holders, and his financial engineering structure—borrowing at 11.5% and achieving over 20% annualized appreciation—is sound. But you have to have an "escape valve" in case you really need to sell. I personally strongly doubt he'll do that in the short term.

The long-term path to a million-dollar Bitcoin

Host David: A year ago at BTC Vegas, you predicted that Bitcoin would reach one million dollars by 2033. Does that prediction still hold true?

Michael Terpin: Confirmed. I haven't revised my million-dollar prediction at all; we're currently in the "Bitcoin Autumn" (the downtrend in Terpin's four-season cycle framework). The only real change from a year ago to now is the emergence of STRC, which has provided Strategy with a buying scale that was previously impossible in a bear market. Saylor raised approximately $7 billion on its last ex-rights day.

Last week at the Bitcoin Conference in Vegas, after his keynote address, he gave a special session for whales. He said his goal is to increase monthly purchases from the current level to $10 billion, $100 billion, $1 trillion, and $10 trillion. I don't know if $10 trillion is achievable, but $10 billion in monthly purchases is definitely achievable in the near future, and $100 billion is also foreseeable. This is enormous buying pressure. I think this is equivalent to setting a floor at the lower edge of the price range.

Back in February, because the price didn't touch the 200-week moving average, I judged that it wasn't the true bottom. It should have broken below 57K to truly reach it, but it only reached 60K before rebounding sharply. The previous three panic sell-offs didn't involve such a sharp rebound; instead, they were long periods of sideways trading, with everyone losing interest in Bitcoin.

Who is driving up prices?

Host David: We interviewed Saylor earlier today, and he humbly said that his purchases wouldn't drive up prices. What's your take on that?

Michael Terpin: I wouldn't say his purchases were completely price-independent. I would say he set a floor for the decline, because I believe he would have bought more if it had fallen to a level like 39K. Also, the price increase each time he bought was surprisingly small, because he bought through OTC channels, which inherently mask buying and selling activity. Historically, many price swings during the whale era have been like this: large-scale OTC buying, followed by selling pressure in the open market to drive down prices while simultaneously establishing short positions. This is a trick Wall Street has already played on other assets. I believe there are traces of this kind of game in the sharp fluctuations around October 10th.

Host Bonnie: How will Bitcoin's volatility change as more whales or institutions accumulate a larger share?

Michael Terpin: The proportion of whales isn't actually increasing; it's the proportion of institutional investors that is. But I believe that the vast majority of whales who sold in October will buy back in proportion or even on a larger scale. This is the core of the "Four Seasons Theory": fear and greed drive the seasonal shift, and the price sold at the end of Bitcoin's summer is much higher than the price at the beginning of Bitcoin's autumn. If you can accurately predict the first day (bubble burst) and the last day (panic sell-off) of "autumn," it's not difficult to achieve a return of over 4 times in a single cycle.

Host David: If institutions treat Bitcoin as a permanent capital accumulation, will it make the market less liquid and more volatile?

Michael Terpin: If it's truly permanent capital, then yes. But ETFs aren't permanent capital; funds will still flow in and out. However, ETF holders do have a lower turnover rate than first-generation retail investors. First-generation retail investors were the type who didn't want self-custody, even finding Coinbase too troublesome, and only accepted purchases through traditional brokerage accounts like Charles Schwab. Historically, they sold to cut their losses when prices fell, but their selling ratio was indeed more moderate than the retail investors of 4 or 8 years ago who "chased highs because friends said they were making money, and panic-sold near the bottom." This might be because they called their brokers and were persuaded to continue holding in their IRAs (Individual Retirement Accounts) for 10 years.

Host Bonnie: Saylor is buying heavily over the OTC market, which means someone is selling to him over the OTC market. Is it a whale selling?

Michael Terpin: The whales have already sold off. The main sellers now are liquidation positions. There are far more liquidation methods for perpetual contracts and various new derivatives than four years ago. Four years ago, BitMEX was the first to offer 100x leverage; now, Hyperliquid and various other platforms offer it. Coupled with the widespread adoption of trading bots, many retail investors think they're geniuses after making a little money and start heavily leveraged, only to be liquidated. The scale of liquidations is directly visible on the blockchain; while it may not be the vast majority of selling pressure, it accounts for a significant portion.

Host Bonnie: You said the whales have already sold out. Are these whales still being traded, not in cold wallets?

Michael Terpin: The vast majority of whales are cold wallet holders. The portion that sold only represents about 10% of those holding coins for 8 years or more, especially 10 years or more. Most of these older wallets have never been touched, or only moved once to transfer coins to a Segregated Witness address for OpSec. Twice in each 4-year cycle, they sell near the top and buy back after the bottom is established. They usually sell a little earlier and buy a little later because they always feel it can go even lower; this was very clear on the blockchain during the 2021-2022 cycle.

Why is 60K most likely not the bottom?

Host David: When we last talked, Bitcoin was at 60,000. You predicted it would be even lower.

Michael Terpin: Yes, that was when we were talking in Hong Kong. This time it fell close to the bottom but didn't really touch it. According to Saylor, the bottom was in February. If February really was the bottom, it means that most indicators in historical patterns would simultaneously fail. Each cycle should usually only have one or two patterns changing, but when most change simultaneously, you have to question the entire cycle's judgment.

First, each bottoming process has historically taken about a year. The last one took a full year, and the one before that took three days to a year. If it ends in 12 weeks, the panic selling in terms of time is insufficient. Those holders who did not stop their losses but were indeed weak-willed have not truly given up.

Secondly, technical indicators point to October as the bottom. The Coin Days Destroyed indicator (a measure of the intensity of selling by long-term holders) points to around 42K, an indicator that has historically been accurate. There's also the time window of "first hit to new highs to capital capitulation": the past two times it was 23 months. Adding to this the pattern of "35 months from bottom to top," the last top was exactly 35 months ago, just a few days shy of the point of the bubble burst. Both these 23-month and 35-month timeframes point to October of this year.

The only controversy lies in the fact that this round saw a "first new high" before the halving (reaching $73,850 in March 2024 after the ETF was approved, before falling back), which is unprecedented in history. If we start counting from that ETF month, the 23-month period points to February of this year, which corresponds precisely to the low of $60,000. Therefore, my judgment has always been: there is a 70% probability that the bottom has not yet been reached. Today, the price just rose to $83,000, which I think is a good shorting opportunity, and my fund is currently doing so. However, there is now about a 40% probability that the bottom has been established, and we also need to do reverse hedging. Overall, the odds of 2 to 1 favor continued decline, and I can buy back what I sold at around $80,000 in the $60,000 or even $50,000 range.

The only change compared to February is that I no longer expect it to fall below 40K; buying in STRC and ETFs has provided a buffer. Each halving cycle is characterized by decreasing returns and decreasing losses. This cycle has historically had the lowest returns; I originally expected a 3x increase under a neutral macro environment, but it only saw a little over 2x. The expected drop was about 66%, but from 126K to 60K, it has only fallen about 54%. Therefore, I estimate the final bottom will be between 48K and 55K, or even 57K, as long as it falls below 60K in February and touches the 200-week moving average, the cycle narrative still holds.

Will the impact of AI on the software industry extend to Bitcoin?

Host Bonnie: AI is disrupting the entire software industry. The IGV ETF (Software Index ETF) is down about 25% year-to-date, and mainstream media says "anything built on code is being repriced." Bitcoin is also based on code; will it face a similar repricing?

Michael Terpin: No. Bitcoin has withstood countless attacks. No Mythos-level model can crack Bitcoin's code; its protection layers are too thick. Bitcoin isn't just code; it also includes all the blocks that have been permanently locked away. The threat of quantum computing is that, theoretically, it's possible to brute-force private keys, compressing what would have taken billions of years into trying all combinations of a 45-character alphanumeric string in minutes, but I think that's still 15 to 20 years away.

Furthermore, before attacking Bitcoin, quantum computing would first target other entities based on SHA-256 (the cryptographic hash function used by Bitcoin), such as defense systems, hospitals, and banks. To crack Satoshi's wallet, one would first have to get past JPMorgan Chase. Bitcoin is cracked wallet by wallet; it's impossible to crack the entire network at once—this is its decentralized advantage.

What I'm really worried about is AI breaching a critical smart contract on Ethereum, causing a price crash for Ethereum and dragging Bitcoin down with it. This is, in my opinion, the most likely "FTX moment" between now and October, such as Lido (Ethereum's largest liquidity staking protocol) being compromised, with staked ETH being siphoned off and transferred to North Korea. An event of this magnitude would drag Bitcoin down to the $40,000 range. Even without such a black swan event, if it's just ordinary hedge fund liquidation, it might only drop below $60,000.

Host Bonnie: Everyone's talking about quantum computing cracking Bitcoin, but very few people are talking about Ethereum. Can quantum computing crack Ethereum first?

Michael Terpin: I wasn't talking about quantum mechanics breaking Ethereum itself, but rather that Ethereum-based smart contracts could be compromised by next-generation cutting-edge AI models. For example, OpenAI reportedly has some Mythos-level models that they're hesitant to release, and other labs also have models of similar strength. If this falls into the wrong hands, malicious actors will actively seek out vulnerabilities. Looking back, the closest Ethereum came to collapse was the 2016 DAO attack, when Vitalik and the community decided to roll back the Ethereum mainnet to erase the theft. At the time, $60 million represented a double-digit percentage of Ethereum's total market capitalization, and the price plummeted from $30 to about $6, but it eventually recovered.

The correlation between Bitcoin, Nasdaq, and gold and wartime hedging

Host Bonnie: From the perspective of supercycles, why have Bitcoin, Nasdaq, and gold moved in tandem over the past three months? I've overlaid them on a chart, ignoring the orange line representing the 10-year yield for now, but the other three lines show very consistent trends over the past six months.

Michael Terpin: In the period following the war, Bitcoin actually experienced a period of independent price movement, first consolidating before rising, while gold did not move in tandem. I haven't done a daily comparison, but Bitcoin outperforming gold after the war is a relatively rare occurrence in recent years.

Host Bonnie: Does this mean that gold is being replaced by Bitcoin as an anti-war safe-haven narrative?

Michael Terpin: We haven't reached that point yet. "Bitcoin is digital gold" has been the main narrative for many years. Although it is still much smaller than the gold market in terms of scale, Bitcoin has some characteristics that many people consider more stable than gold, such as scarcity. The new supply halves every 4 years, while the annual new supply of gold is about 1.5% of the existing stock. If this rate is maintained over the next 100 years, it means that the gold stock will increase by 150% in 100 years, while Bitcoin will only increase by about 4%.

Global liquidity, presidential elections and supercycles

Host David: Do you think liquidity is still the main driver of Bitcoin? Lyn Alden (macro analyst) overlaid global M2 money supply growth and Bitcoin price a few years ago, showing a strong correlation. Does this shake your cyclical theory?

Michael Terpin: No, the two are complementary. The global liquidity cycle is mainly driven by presidential elections and related policies. As I wrote in my book, it's no coincidence that Satoshi scheduled the halving around presidential election years and the bear market around midterm election years.

Host David: Why do you say it's not a coincidence?

Michael Terpin: Satoshi didn't explicitly state it in the white paper, but the fact is that 2012, 2016, 2020, 2024, and the next 2028 all align with the US presidential election. In reality, he couldn't control it precisely, because the cycle isn't a fixed 4 years, but rather 210,000 blocks, with a target of one block every 10 minutes, exactly 4 years. The difficulty adjustment algorithm automatically makes it harder or easier for miners to produce blocks based on the block production speed; it increases difficulty when block production is fast and decreases it when it's slow. This is the source of the additional security this mechanism provides to the network; I have a whole chapter in my book about mining economics.

Host Bonnie: So the 4-year cycle is based on the US election, and Satoshi's campaign is designed around the US?

Michael Terpin: I believe so, because the United States remains the world's most powerful economy, influencing the entire globe. Whether Satoshi was an individual or a team, their understanding of economics was incredibly sophisticated, and they predicted this arrangement would operate stably for the next century. Once the initial five, six, or seven cycles are over, we enter the supercycle effect I discuss in my book. Even though we're only in the fifth cycle, Bitcoin's issuance is already 96% complete. The first cycle was the most profitable; you could mine coins for less than a cent, although you couldn't sell them before 2010. Hal Finney (the person who received the first Bitcoin transfer and the first miner besides Satoshi) said something to the effect of: "This will either go to zero or reach $10 million per coin."

Host Bonnie: Do you think Hal Finney is Satoshi?

Michael Terpin: He was indeed one of the suspected candidates. It remains a mystery; there are probably 20 candidates with reasonable suspicion, but none have been confirmed. The most recent suspicion points to Adam Back (inventor of Hashcash and CEO of Blockstream), but he has denied it. Many people disagree with this assessment, mainly due to his British spelling and the timezone information in his original post, which indicated it was made in Canada. So, it's still in the speculation stage.

Fiat currency devaluation, trust erosion, and commodity supercycles

Host David: How much of the Bitcoin price increase over the past 10 years has been driven by fiat currency devaluation and sovereign debt accumulation?

Michael Terpin: A very large proportion. The biggest creator of liquidity is printing money, and once the US prints money, the rest of the world often prints even more, which erodes trust in the fiat currency system. I've discussed commodity supercycles over the past 100 years in my book; there have been three. Elliott Wave Theory (a market cycle theory proposed by Ralph Nelson Elliott nearly a century ago) divides supercycles into large and small supercycles. A supercycle must meet two conditions: it must last for more than 5 years, and the core narrative of assets must undergo a fundamental change.

The first supercycle of the last century was gold in the 1970s. Two narrative shifts occurred simultaneously: Nixon abandoned the gold standard, and Americans regained the legal right to own gold. One created a new reason to buy gold, and the other created a new group of gold buyers, ultimately leading to a fourfold increase in gold prices in the 1970s. The second supercycle was in the 1990s, driven by China's ultra-rapid industrialization, particularly in building materials such as copper and nickel.

In my book, I cited a 2023 report from the CME Group, which stated that we may be entering a new supercycle due to money printing and currency devaluation, but it was still uncertain. By 2025, the answer will be clear.

Host David: Have you heard of Neil Howe's "The Fourth Turning" (a theory that predicts a systemic collapse of society every 80 years)? Does the recent rise in Bitcoin reflect the erosion of social trust brought about by the Fourth Turning?

Michael Terpin: That's an interesting question. Actually, similar theories about the two-generation forgetting cycle existed long before the publication of *The Fourth Turning Point*. The 1980s are a controversial window, with dramatic events occurring in every decade. My personal observation is that the technology cycles over the past 50 years have been remarkably consistent: each decade has seen at least one major disruptive technology, typically starting at the beginning of the decade and bursting at the end.

To recap, the internet began in 1991 (although DARPA's experimental network existed in the 1960s). When I first encountered it in 1993, browsers were obtained from Marc Andreessen's dorm room; it was just a university project then. The late 2000s saw the dot-com bubble. The 2000s were about Web 2 and social media, with companies like LinkedIn and MySpace starting from scratch, culminating in giant unicorns like Facebook. The 2010s were about Bitcoin; it could be bought for a few cents in 2010, but by 2020 it was worth nearly $60,000. This decade is about AI; in 2022, OpenAI released its first commercial LLM, breaking all records for user growth. Netflix took a year to reach 1 million users; OpenAI took 5 days, and now it's approaching 1 billion.

AI, like the internet, has been brewing for a long time. My younger brother graduated from MIT's AI Lab, and back in the 90s I thought expert systems and the Prolog language would make AI take off, but that didn't happen. LLM and agents were the real tipping point, and now AI accounts for almost the entire growth of the S&P 500.

Will AI investments steal funds from Bitcoin?

Host David: AI is the new sexy investment, so what is Bitcoin?

Michael Terpin: There are two points. First, it's a huge pie, and it's true that some stock investors are shifting from other sectors to the Mag7 (the seven largest tech stocks by market capitalization, primarily beneficiaries of AI), and Sand Hill Road (Silicon Valley's top venture capital hub) allocates over 80% of its budget to AI. However, these are all rotations within their respective asset classes. Gold investors won't sell gold to invest in AI, and neither will Bitcoin holders. There might be some who previously allocated 30% to crypto and now switch to 20% crypto + 10% AI, but the money supply continues to grow, and every asset has room for growth.

Secondly, AI tokens have also seen significant gains during the bear market, although their overall size remains relatively small. The AI token sector experienced a 100x surge at the end of 2024 (October to December), before the bubble burst. In the last 90 days, Venice's VVV token has risen approximately 500%, from $2 to nearly $10. Bittensor's price has doubled, although it is still far from reaching its previous high.

My prediction is that leading AI tokens will outperform Bitcoin over the next three years, with a significant portion of the profits flowing back into Bitcoin. Furthermore, stablecoins are a new force in the crypto economy; for the first time, stablecoin users have a "wallet," greatly reducing the transaction costs of accessing Bitcoin and other tokens. I was an early participant in Tether, founded in Santa Monica in early 2014 by Brock Pierce and Reeve Collins, which was later sold to Bitfinex and became independent as Tether. At the time, everyone's vision was simply "to eliminate the three-day waiting time for transfers between exchanges, while incidentally earning bank interest." No one imagined it would become a business with 100 employees, earning $20 billion annually from US Treasury bonds.

The Mathematics of Diminishing Returns and Supercycles

Host David: How will future cycles evolve? The gains in each bull market decrease from bottom to top. If this trend continues, mathematically, the gains will eventually approach zero.

Michael Terpin: Yes. That's why supercycles are important; what we see are "logarithmically decreasing returns" and "arithmically converging declines." Specifically: the first round (before the halving, which may not be entirely comparable) went from 1/10 of a cent to $30, a 3000-fold increase, then dropped 97% to $1; after the first halving, it went from $12 to $1200, a 100-fold increase, a drop of 85%; the third round went 30-fold, a drop of 83%; you see 3000, 100, 30, and logically the next number is 10.

I originally expected a 10x increase from the halved price of $8,700 during the COVID period, but it only reached $68,000-$69,000, roughly 8x. I attributed this to macro headwinds, the Biden administration's crackdown on crypto, Operation Choke Point 2.0 (referring to the alleged financial decoupling policy), and the interest rate hike cycle. I was already surprised it was only slashed by 20%. This round of price increases, including the ETF's surge to $73,850 in the first month (almost 9x), and subsequent rebound from the low of $15,000 after the FTX debacle, all point to this.

Based on this sequence, I expect this round of gains to be around 3 times, depending on the macro environment. Everyone thought Trump's election would bring favorable winds, but they didn't realize that while Trump is friendly to crypto policies, his communication style is extremely chaotic. His statements on Twitter often ignite the market. Following the logic of "The Art of the Deal," he would first make extreme demands and then return to the middle ground to create a sense of victory. This political tactic is a shock to the media and the market, resulting in the extreme volatility on October 10th.

The October high perfectly matched the positions of previous peaks in terms of data. Another viewpoint suggests that there could have been another month or two of continued gains, requiring sufficient buying pressure and the absence of a black swan event. However, October 10th became that black swan event: Trump's tweets, chaotic buying and selling, and market makers being liquidated—a perfect storm that caused a freefall in prices. There was also some consistent selling and shorting activity in traditional financial markets at the time, possibly indicating that certain institutions acted quickly after seeing the signals. That initial crash triggered the entire bear market.

Jane Street's selling pressure at 10 AM and Wall Street's trading strategy

Host David: Finally, please comment on the rumors that Jane Street (a top quantitative market maker) sells Bitcoin every day at 10 a.m.

Michael Terpin: This event was widely reported. I don't have direct evidence, but the reporting was so intense that it seems very likely that it actually happened. And now that it's stopped, the price has gone up. The narrative is this: Jane Street systematically sold off half an hour after the US stock market opened, coupled with the short-term sellers' usual practice of spreading bearish news. In fact, the price fell because they themselves were systematically selling off; at the same time, they had already established short positions, profiting from both sides.

Host Bonnie: Is this legal?

Michael Terpin: It's basically legal. There would be restrictions on commodities or securities, but the definition of Bitcoin itself is unclear, and the legal boundaries of short selling are blurred. I'm not a lawyer, but I know that Wall Street pays only a small fraction of its trading revenue in fines each year. The games they played during the whale era are still perfectly possible for Wall Street today, and they continue to play them.

Host Bonnie: In other words, the inflow of funds into Bitcoin spot ETFs is what retail investors can see, but that doesn't mean they aren't simultaneously shorting with derivatives.

Michael Terpin: Yes. The stock market is the same; there are dark pools and OTC trading platforms. The classic profit-making method during the whale era was: buying heavily on the OTC market, shorting on smaller exchanges (arbitrage would automatically drive down the entire market price), and simultaneously holding a large short position. For example, establishing a short position when the price is 85K, with a target of 75K. Their holdings were enough to trigger selling pressure, and then they would buy back at the price reached, while simultaneously closing out their short positions and making a profit.

Host Bonnie: Does this explain those well-known addresses that seem to be consistently losing money on-chain, like James Wynn? They must be hedging on exchanges.

Michael Terpin: I can't verify that for them. There are indeed many people on X publicly claiming to have "made or lost a billion," and there are people live-streaming their trades on YouTube, but they may not be live-streaming all their trades. The biggest advantage of the Bitcoin market is the openness of on-chain data, but after ETFs, a large amount of trading is hidden in Coinbase's internal ledger and off-chain derivatives markets. This kind of trading has existed in the gold market for a long time.

Host David: If you were to rewrite your book today, how would you revise it?

Michael Terpin: I will write more details about the possible endings of this cycle. Previously, I simplified the most likely scenario to "a neutral macroeconomic downturn to around 193K". I will also add a few formulas, such as the 35-month pattern, but at the time I didn't want the book to be too technical.

Host David: I recommend everyone check out Michael's "Bitcoin Supercycle".

Michael Terpin: That includes your channel too, thank you.

Spot gold has climbed back above $5,000.

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