Bitcoin’s Next Supercycle: Why a Supply Shock Could Send Prices Soaring | Markets Outlook

Jennifer Sanasie (0:00)

You mentioned a million-dollar Bitcoin there. When do you think we get to that price target?

Michael Terpin (0:04)

I've said for a while that I think it will be within the next three cycles. I think that the most likely is 2037 I think that this next time, obviously depends how early we get the first supply shock and start the super cycle.

Jennifer Sanasie (0:25)

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Michael Terpin (0:50)

Happy to be back.

Jennifer Sanasie (0:52)

All right. Talk to me about what you're watching.

A lot of excitement over the past two weeks.

What are you watching at Markets this morning?

Michael Terpin (1:02)

Well, I'm watching the change of seasons. We have definitively gone now from the end of the bear, what I call Bitcoin fall, to the very early beginnings of the three-year bull market, which I call Bitcoin winter. It's the longest season and it's the one that people have disbelief that it's actually going to start turning around, but it does. We did it just like we did in early 2023 with an exclamation point.

If you look at what happened after FTX in the end of 2022, went all the way down to 15K, lasted really flat for about two months, and then all of a sudden, one day in January, it popped up all the way to 22K. That's what happened here. To begin the move up, which was when Treasury Secretary Besson said that they were going to start printing money to start buying back up to a trillion dollars of long dated T-bills, and then when we had just the dynamics of going above the 50-week moving average, that was enough to kick in another sharp rally and a billion dollars of ETFs got bought. So the institutions are definitely playing along this time.

Jennifer Sanasie (2:09)

But the beginning of bull market always comes a new entrance into the space. I think there's a different narrative driving us into the evolution of crypto and the evolution of finance. For folks who are just starting to learn about crypto, maybe making their first investment, what should they know? Maybe draw some parallels. You mentioned what happened around the FTX event and what happened after there. Just draw some parallels between the last time we came out of a bear market and into a bull.

Michael Terpin (2:40)

So my whole thesis, and I've been in Bitcoin since 2012 and really heavily since 2013, was following the markets and noting. Satoshi actually said in his early writings that as long as the amount of new money coming into the ecosystem between halvings exceeds the amount of inflation from the halving itself, which gets lower and lower every four years, the price has to go up in supply and demand. I noticed that what scared off other traditional investors was the wild volatility. It would go up 100x and then down 85%.

And I noticed that that happened in discrete behaviors, which I call the Four Seasons in my book, Bitcoin Supercycle, available in stores and on Amazon.

And I named them after the Four Seasons because there are four behaviors that happen in the same order. Bitcoin Spring starts at the halving and it basically is when miners go from being slightly profitable to having a big loss. You think the price would crash, it doesn't. It stays flat because for everyone who's a miner and is selling, which is fewer and fewer percentage of Bitcoin holders every time, there's someone who's happy to go and buy at the lower price, but they don't buy in great quantity until you get a new all time high after the halving and that's the first day of Bitcoin Summer. Four times out of four goes up like a rocket ship. Usually stops in the middle, kind of like the first phase is jettisoned and then you get the second one. This last time did not go up as much as people were hoping or expecting, but we do have the law of large numbers in effect. We only went up 2x as opposed to 100x after the first halving. But that will continue until we hit the super cycle. Right now, when the bubble pops, that's Bitcoin fall that usually lasts about a year. This is the shortest one we had, it was only nine months. Then the longest season is what I call Bitcoin Winter, which is what we just started now. It's the long way back to the top. But in general, it's been pretty consistent in the halving that if you hold Bitcoin for three years and then hold cash for one year, you do way better than just holding Bitcoin forever.