Why Q3 2025 Is Your Last Chance to Understand the NEW Crypto Cycle

0:00 Today is June 30th and that means that the second half of 2025 begins tomorrow. And I believe that Q3 of 2025 is going to be the single most important quarter for this entire bull run. And the reason that I believe that is because this is going to be the quarter where most investors get locked into either one of two different paths. The first path is following the old four-year cycle framework. the one that everyone talks about, the everyone the one that everyone's relying on. Uh that tells you that the the market top, the cycle top is just a couple months away. The second path is following the new cycle framework, the one that I'm going to talk about in this video and the one that I believe that all the data is currently pointing to. That's a lot different than most people are currently expecting and is a lot different than what we've seen in past cycles. And my

0:47 personal belief is the path that you choose over the next 90 days is going to determine whether you end up with life-changing, you know, gains this this market cycle or if you just end up walking away, you know, as an average market participant. In this video, I'll dive into all the details. I'll lay out my exact case for why I believe these things and exactly what I'm talking about and show you why I believe that this really is the last chance to get on the right side of this trade. Okay, before we get started, I know it looks like I've gotten hit by a bus uh this this morning when I'm recording. I don't know what's going on with my right eye. I woke up a couple days ago. It's been like this for a few days. I'm hoping it just goes away. I almost didn't record this video this morning, but I really feel like this is such an important topic to dive into that I really wanted to just get this out there and and talk about it. There's an insanely famous quote in investing that goes like this.

1:32 The four most dangerous words in investing are, "This time it's different." And this is probably one of the single most misunderstood quotes in all of investing. It's meant to be a warning that people in psychology never change and therefore you're going to have these timeless patterns in investing that just repeat over and over and over again. However, it's not meant to say that nothing ever changes. Obviously, lots of things change all the time and lots of patterns that exist in investing break all the time. And when it comes to the four-year cycle, there is no guarantee, absolutely no guarantee that it's going to repeat every four years for for the rest of time. Eventually, that cycle will be broken. Uh because eventually enough people will recognize that it is a cycle, they'll try to frontr run it and just like by the very, you know, act of them trying to frontr run it, they'll push it forward, break it or or mess it up,

2:18 whatever. But even beyond that, because I I don't think that's going to happen today. I I think people in crypto are aware of the four-ear cycle. I think people outside of crypto are still like completely oblivious to the four-year cycle. So, as far as that goes, I don't think that's an issue. Uh, but even outside of that, I think most people just are blind to why the four-year cycle happens in the first place. They they just like kind of assume it's, you know, just some sort of, I don't know, uh, finance magic that that happens every four years. And they don't pay attention to the underlying dynamics that actually shape it and cause it to happen in the first place. And it's not the Bitcoin having, that's what everyone says. It's a Bitcoin having. I've gone down that rabbit hole and I'm telling you like matter of fact, the Bitcoin having might have a effect. It might play a little bit of a role but but it's like tiny. Okay. Uh the the real reason behind the four-year cycle is is macro. And the way we can see this like

3:05 guaranteed like I'll I'll prove it to you right now. It has nothing to do with having is all macro. I'll show you right now in one chart. And that's this chart. It's maybe my favorite chart of all time. I show this in so many videos. So some of you guys who watch my channel over and over again, you're probably sick of this chart. Uh but maybe you've never thought it through this way. So this might be worthwhile for you even if you've seen this a million times. This chart unequivocably proves like matter of fact that the the the four-year cycle has nothing to do with the having or that the having has a small only a small incremental effect on the four-year cycle. And that's because this chart itself has nothing to do with crypto. Has nothing to do with Bitcoin. Uh like if Bitcoin and crypto didn't exist, this chart would look exactly the same. It's not measuring anything in Bitcoin and crypto. It's measuring global M2yearover-year growth. Yet, despite it

3:50 having no absolutely nothing to do with crypto, you can clearly see the 2013 uh crypto bull run. You can clearly see the 2017 crypto bull run and you can clearly see the 2021 crypto bull run. Uh so you can see there was this huge burst in liquidity in each of those years that happened to coincide with this huge runup in Bitcoin's price. So again, you know, a lot of people believe this this having thing. Uh but but it just happens to be a coincidence or or maybe it's Satashi's like grand planning. Like maybe he was just a super genius and knew this was going to play out this way. Either way you want to say it, it perfectly coincides with these year-over-year pumps in liquidity uh that that pump up risk assets like Bitcoin. I you might say today maybe Bitcoin's a little bit less of a risk asset uh than it used to be. But certainly back in 2013, 2017, 2021, it

4:36 was much more of a risk asset and it benefited massively from these huge bursts in year-over-year liquidity. So that chart makes it undeniable that the 4-year cycle is much more complex than most people make it out to be. It's much more complex than a simple having. Meaning while of course you can expect every, you know, four years the Bitcoin supply to half uh or to to be cut in half, you cannot expect every four years like magic the global M2 year-over-year uh liquidity to pump on these levels. That's not there's no like pre-written rule. Uh you have to dive into the details as to why every four years these things happen to have pumped uh in the way that they did. And a lot of it goes back to a lot of it goes back to the 2008 financial crisis. We had this huge financial crisis 2008. We had a huge policy response following that crisis

5:23 and that kind of kicked off a set of events that led to this four-year cycle in the way that we know it today. But that got massively shifted and disrupted when we had the COVID cycle. So, so in the same way that 2008 was like this huge big deal, uh, COVID was also a huge big deal in the terms in terms of policy response. We saw a massive amount of policy response on an unprecedented scale globally that shifted things. It changed things and it and it messed up that previous pattern that was playing out. Think of it, I I've given this example before. Think of it like uh 2008 where somebody threw a rock in a pond and because they threw that rock in a pond, that's the policy response. It caused those ripple effects that that came out every four years. Okay. Well, uh, COVID was another it was a bigger rock. It was like this big boulder they

6:09 threw in the pond that changed the ripple pattern and now things are are a little bit different than they were post 2008. And on top of that, crypto itself has been mass like going undergoing massive changes uh that weren't present in the in those past cycles. Okay, Trafi's presence in crypto was not it like even a sh even a ghost of what it is today. We have ETF flows. We have Wall Street going like absolutely bananas on crypto with with their products and and the things they're doing. We have all these altcoin ETFs uh getting ready to come out this year. Uh things have fundamentally shifted on on a crypto level as well. And just to give you an idea of what I mean, when the Fed raised rates post the 2021 cycle, that was the fastest policy tightening that the Fed's done in the last 40 years.

6:55 Because of that, not only has credit been tight and just like in general conditions been much tighter than what we saw in past cycles, but global liquidity as a whole, the the growth of global liquidity as a whole has been much much smaller up to this point than we've seen in in past cycles. And another thing that's been radically different this cycle versus last cycle is the the net gain in liquidity. In 2013, the percentage growth was around 35%. In 2017, it was around 33%. In 2021, it's around 80% and today it's around 11%. So it's around a little bit less than a third of what we saw in 2013. Basically meaning the 2013 cycle was you had three times as much proportionally liquidity than you have today for all uh for crypto and it was much smaller as well. And in 2021 you had over seven times as much uh

7:40 liquidity in terms of percentage slashing around in the system as you do today. And another thing that's insanely different this cycle than previous cycles is the length of tightening that we've seen from the Fed. So in the 20 2009 to 2013 cycle there was no tightening uh you know this was post 2008 uh financial crisis the the Fed was uh sitting at really really low rates and we had no sort of tightening cycles up to that but before the 2017 cycle we saw around 25 months of tightening in terms of liquidity before the 2021 cycle we saw around 19 months of tightening in terms of liquidity. However, today during this cycle, up until this point, we've had around 40 months of tightening, which is unprecedented in in terms of like previous cycles, like you know, the the longest one before this was 25 months. We're currently sitting at 40 months of tightening. Not only

8:26 that, but as I just mentioned, rates are really really high compared to to past cycles. So, in the in past cycles, we've had rates all the way down here, right? So, this is 2013 cycle, and even going into the 2017 cycle, we had rates really low. Although we did pump rates up in like into into 2017, they still were much lower than we are currently today. Uh we've never had a cycle with rates sitting as high as they are today. And what that really affects is credit and debt. So, uh when you have an a credit abundance, when credit is easy, it's cheap. A lot more people are taking out loans. That's a lot more money creation. That's a lot more liquidity being made. It pushes the economy to grow and pushes risk assets to grow. Point being, the environment has been a lot harsher than what we've seen in past cycles. So, it's no wonder, you know, alts, etc., risk on

9:12 assets have not performed in line with what we've seen in the past. It's just been a much tougher environment. But his history shows us that that always changes that eventually this environment has to go from a really harsh environment to a more stimulative economy in order to keep the the the Ponzi going basically. And we know this is where Trump and Bessant wants to go. Uh Trump wants to leave a legacy. He wants to be known as the greatest president of all time. He wants to leave the country in a state where he can say, "Look at what happened under me." And and they've spelled this out in multiple interviews exactly how they want to get there. Uh this is why Trump is, you know, yelling at Jerome Powell all the time. You need to cut rates. You need to cut rates because he knows where he wants to go. He knows what he wants to happen. He wants to leave with fireworks and applause and everything going

9:59 absolutely bananas. What I think a lot of people don't understand is if we hadn't had the ETFs, if we hadn't had this liquidity faucet from the stratifi space into the crypto space, the crypto market would be like dead as a doornail up to this point. We it would be so quiet and so slow and people would be like, "Oh my gosh, is crypto is a whole dead? Is is Bitcoin dead? etc." Because we wouldn't have seen even close to the amount of growth that we've seen so far this cycle. All of this growth has been sustained by these trad flows because liquidity as a whole, global liquidity as a whole, credit etc. This has all been like by historical standards really really a really really poor environment and going way slower than what we've seen in the past because again 2021 the co the co era was a huge disruptive event to this pattern that we had

10:45 playing out from 2008 onward. So you can say like the first crypto cycle was 2009 to 2013 and uh we it's an era of low rates. We had really cheap credit. We had a lot of liquidity getting pumped in the system. And it's all hallmarks that we have not seen at all this cycle, which is why I think a lot of people are going to get wrecked this cycle because they are relying on that outdated model, not realizing where it came from and what's shifted since. And so they're expecting prices to peak at some point late 2025. And when that happens, there's going to be a swath of traders who are going to exit the market. They're going to say, "Okay, this was it. This the cycle is over. I'm following the old framework. This is based off the having. It's time to sell." and they're going to exit the market. And I think that's going to be a massive mistake and it's going to be way too soon because they're not recognizing what's fundamentally changed and what's

11:30 going on. Which brings me to the three outcomes or the three different ways that I personally believe things are are going to play out based on the data. The first outcome is the idea that we're going to see the the uh liquidity increase. We're going to see the conditions favorable to an alt season, favorable to more of an a risk on appetite come into place in late 2025. and it's going to bleed into early 2025. So ba basically think of this cycle uh in instead of happening and being condensed into just late 2025, it's actually going to bleed over into early 2025. That's the first scenario or the first outcome. The second one is quite a bit more bullish and it's the idea that the alt season, the bull market starts in late 2025 and bleeds into early 2026 before taking a break o over summer and

12:17 then we have a blowoff top in late 2026. And this is really similar to the 2021 cycle. Although uh where in 2021 we had like a bull market in early 2021 and late 2021 with with a break in the middle, but it would basically represent the first 5-year crypto cycle that we've seen where really the action happens in 2026. And uh the the start of the cycle is is really kicked off in 2025. And then the third scenario is by far the most bullish scenario. And that would be that the basically the the alt season the bull run starts in late 2025 and it simply keeps going all the way to late 2026 before we we have a blowoff top. So basically the third scenario there is no pause and I'll go through the likelihood of each one what the data is saying and why each one has a a shot and a chance.

13:04 And it's not just me like making up like different scenarios that could happen. This is all based on on the current macro setup and the way that we see macro playing out into 2026. We'll start with number one, which is where all season starts in late 2025 and bleeds into early 2026. Currently, this is the base case. It has the highest probability of being what ends up happening, although it's not by as much as you might expect. Currently, based off the data, that's sitting at around 30% probability. This first one is based off the idea that we get a first cut from the Fed in September. So, I some people are expecting maybe the first cut to come in July. That that's certainly possible that we could get maybe a cut in July. Uh, but this is based off the idea that the first cut comes in September. Kind of coupled along with that, we have the altcoin ETFs that that I've talked about in past videos. They're currently sitting at between 90 and 95% uh, odds of approval. Uh, which

13:52 is really high, meaning that we're going to see stuff like a Salana ETF, XRP ETF. Uh, Dogecoin ETF is sitting over 90% odds of approval. And once those things hit in in our live, um, we're going to see a lot more crypto ETFs. Basically, any altcoin that has any sort of demand is going to see an ETF. And you're going to see a lot of speculation around these ETFs. So, everyone's going to wonder, you know, is Polygon going to be the next one with the ETF? Or even like smaller tokens, you know, people are unhinged in crypto. They're going to be like, "Oh, this even unreasonable." They're going to be like, "This if Dogecoin got an ETF, my $5 million market cap coin could be the next one. Who knows?" Again, unreasonable, but people will speculate on this. And alongside this, we have multiple basket ETFs uh that are that are sitting at high odds around 90% of approval, too. Uh which feature a multitude of

14:37 altcoins. So uh you know they might have five 10 different altcoins in that basket uh balanced in in different position sizes. Uh but but all these things are a huge tailwind for uh altcoins and a huge legitimizer of altcoins. They they basically are Wall Street signaling that these are real investments that you can put money in. Uh the you're going to have uh Wall Street's marketing arm, you know, going out there and saying, "Hey, you know, this ETF is great. You should buy it because of this, this, and this. Here's the base case for, you know, this blockchain or here's uh why this token is valuable, etc." And I made a whole video on this and why the second and third order effects are insanely bullish for altcoins. So you have that kind of coming into play alongside this the Fed cut. So it's more risk more liquidity for risk on assets. On top of the fact that in general kind of the end of the year around October through December is

15:23 just insanely bullish for crypto. Like almost every single year, this is when we see a huge uptick in prices. Just go back through the chart and you'll see exactly what I mean. Like alts get a huge bid typically at the end of the year and the start of the next year. And so this is just a really bullish environment in general. Uh and then uh you know lastly you have a lot of people expecting an old season around this time which kind of becomes a self-fulfilling prophecy. So all these things together coupled with the liquidity boost we get from macro uh because it's not just Fed cuts. We we have quite a few things on the horizon which I'll go into in some of these other scenarios and that's really the main core driver that main core uh tailwind behind what should push these prices higher in this uh you know first scenario. And basically the reason this scenario ends up being shortlived is it's it's expecting that CPI picks up. So because of um rate cuts, because

16:09 of tariffs, etc., we see an uptick in CPI that kind of limits the amount that the Fed's able to cut. Trump's, you know, for whatever reason doesn't get his way with his new appointee. We have the TGA rebuild that ends up kind of sucking some the liquidity out of the market. And in general, because uh we see so much action around alts and prices go up, it gets too unstable. the market's too in too much of an unhealthy state and because there's not enough liquidity to keep things pumping, we we see things kind of unwind by early 2026. Okay, so the second scenario currently is sitting at around 26% odds of probability. Again, the first one was 30%, second one's 26%. So it's it's not actually that much like it's not meaningfully lower than the first scenario. In fact, they're really really similar in terms of probability. And this scenario as well as the the next

16:55 scenario are based off the idea that yes, we might get, you know, be maybe one or two cuts in 2025 based off of the way that Jerome Pal is currently doing things. But in 2026, if Trump gets his way, we we'll see a lot more cuts than that, especially considering that Jerome Pal is out in 2026 and Trump gets to nominate whoever is going to replace him. And they're more likely to be a lot more favorable to whatever Trump wants done. And right now, Trump wants rates at like 1% or zero. He wants them as low as possible so that he can get that fireworks scenario and so that it can offset some of the drag that comes from tariffs. This is a part of they've laid out their plan multiple times. The the three stool uh Scott Besson's three stool trade taxes and uh deregulation. And so trade is a little bit more of a uh burden on the economy. But cutting

17:41 taxes is stimulative and then deregulation is stimulative. And and coinciding with this, they want to see rate cuts. This helps them turn over the debt at a much cheaper price. So, this Trump's been talking about um uh right now they're going to just roll everything over into short-term debt and hope to refinance that at much lower rates after they they cut the Fed cuts rates uh hopefully by the time that Trump appoints a new chair. And so, if we're expecting a lot more rate cuts in 2026 and we're only expecting some of them in 2025, it does make sense mentally to say, okay, uh rate cuts are extremely bullish for for the markets, especially risk on assets. They're extremely bullish for credit. They're extremely bullish for liquidity. And if we're going to be getting a ton of those in 2026, who is to like why would the bull run end in early 2026, especially if that's when these rate cuts start, uh that that's a lot more liquidity to push

18:27 the bull run further into the end of 2026, which is where this and the next scenario come from. As well as things like the SLR exemption, which they the Fed just did a meeting on this. It's extremely bullish. The the direction they're wanting to take is actually more bullish than was initially thought. You have the Basel 3 delays there. In general, Trump and Scott Besson's goal is to inject a a massive amount of deregulation into the global financial market or into the the US financial market so it can free up banks to not only buy more US debt, but in general to get the economy humming. They want they want really cheap credit. They want really abundant credit. And they want things really humming along to kick the economy into overdrive. I talk about this all the time, but uh their plan, you know, Doge didn't work. They there wasn't enough to cut. And so their plan to deal with this massive amount of debt currently the one that they broadcast

19:13 day and night is to outgrow the debt and in order to grow I I always say in in order to grow you got to throw some gasoline on that fire and that is their plan with deregulation. So what you have this deregulation you have these rate cuts and all of this is centered around 2026 not 2025. And so really the the first scenario is based off the idea that like the market sees this coming, prices it in ahead of time, and that's where you see this exceptional growth in all coins into early 2026. But if you look at like the fundamentals of these things, uh most of those things take effect in 2026, which is why you have this second and third scenario gaining so so much credibility because the majority of these things happen in 2026. And it's not just even those things like in general of like crypto deregulation, you have like the the Fit 21 bill. Uh

19:58 you have the SEC providing a framework and like a sandbox for for crypto to innovate, more builders to come into the space. Uh you know, maybe some sort of like token equity rules where like projects can actually provide value with their tokens. Uh and and you're going to have a lot more ETFs like the ETFs so far that I've mentioned are just the ones coming out like with a deadline in 2025, especially once some of those are approved, you're going to see like a huge swath of more ETFs coming to market. They're going to have they're going to land in 2026. And the third path where it's like the single unbroken run starts in 2025 goes all the way into 2026 also sits at a 26 odds of approval or or odds of happening. And if you've been adding up all these probabilities you might have noticed it doesn't quite uh equal 100 and that's because there is a fourth path and that is what are the odds of just no alt season whatsoever. Uh it'd be stupid not not to price that

20:45 in. Uh that's currently based on the data sitting at around 18%. And basically in that scenario the Fed doesn't cut rates till around December or maybe even next year. CPI ends up reacelerating to like 3.5%. Uh meaning you can't really get easing. Somehow the Fed chair that Trump himself appoints is like turns hawkish and like tricks Trump. All this regulation stuff ends up fizzling out and not going the direction we think it's going to be there. You get the idea. Just like the the bad outcome scenario in aggregate. If you take the winning scenarios where you either have the the short burst from 2025 to 2026, the long burst with a break or the long un uninterrupted burst, those together are a total of 82% total chance uh versus an 18% chance of like no alt season. So 82% chance that one of those three paths is uh where we go with alt

21:32 season and we do have an amazing alt season and then you have an 18% chance of no all season whatsoever. And what I find most interesting about these odds is like in to if you take the either it's a two-stage uh run in 2026 or a single unbroken run in 2026 in total like those together that's a 52% chance which means like it the the currently the highest likelihood uh outcome is that we have uh some sort of bull run or alt season that goes towards to the end of 2026 which would represent essentially the first 5-year cycle in crypto and I think would catch every almost everyone offguard. But again this isn't me just like making this up. This is like all based on like you know looking at the the wider liquidity picture and what's coming all these rate cuts uh you know all this deregulation all these other things coming into the market that should be a tailwind to risk assets like altcoins. As always as new

22:18 data rolls in as we get our first rate cut and you know things shift and change I'll keep updating these frameworks and and posting videos like this to kind of share where we're at and where we're going. If you're interested in weekly market updates where I dive into the current state of the market, the current state of macro and everything in between, I do post weekly market updates in the Obsidian Council. Currently, it's closed to new members, but you can sign up to join the wait list in the description of this video. As always, of course, none of this is investment advice. None of this is me telling you to do anything with your money, and you should always do your own research. If this video was helpful, make sure to hit that like button. And if you want to see more videos like this, make sure to hit the subscribe button and the little bell next to it to be notified each time I release a new video. Thanks for watching and I'll see you