The Bitcoin Cycle You Knew Is Dead, Says Capriole | Crypto News
Capriole founder Charles Edwards argues that Bitcoin’s well-known four-year boom-and-bust sample has successfully ended—not because markets have matured into a placid equilibrium, but because the engine that once compelled 80–90% drawdowns has been dismantled by Bitcoin’s own financial design.
The 4-Year Bitcoin Cycle Is Dead
In his Update #66 publication revealed on August 15, 2025, Edwards writes that since the April 2024 halving, Bitcoin’s annual provide growth has fallen to roughly 0.8%, “less than half of Gold’s 1.5–3%,” including that this shift “made Bitcoin the hardest asset known to man, with look-ahead certainty.” With miners’ new-issuance provide now a rounding error in contrast with combination demand, the dramatic, miner-driven busts of prior cycles look more and more like artifacts of an earlier period. “In short – the primary driving force behind Bitcoin cycle 80-90% drawdowns historically is dead.”
Edwards doesn’t deny that cycles exist. He reframes their causes. Reflexive investor conduct, macro liquidity, on-chain valuation extremes, and derivatives-market “euphoria” can still mix to produce sizable drawdowns. But if the halving calendar no longer dictates those inflection factors, traders must recalibrate the indicators they monitor and the timelines on which they anticipate risk to crystalize.
On reflexivity, he cautions that perception in the four-year script can itself grow to be a price driver. If “enough Bitcoiners believe in the 4 year cycle… they will structure their investing activities around it,” he notes, invoking George Soros’s notion that market narratives feed back into fundamentals. That self-fulfilling aspect can still set off “sizeable drawdowns,” even if miners are no longer the marginal price-setters.
Macro liquidity, in Edwards’s framework, stays decisive. He tracks a “Net Liquidity” gauge—the year-over-year growth in global broad money minus the price of debt (proxied by US 10-year Treasury yields)—to distinguish genuinely expansive regimes from nominal money growth that is offset by greater charges.
Historically, “All of Bitcoin’s historic bear markets have occurred while this metric was declining… with the depths… while this metric was less than zero,” he writes, whereas “All of Bitcoin’s major bull runs have occurred in positive Net Liquidity environments.” As of mid-August, he characterizes circumstances as constructive: “We are currently in a positive liquidity environment and the Fed is now forecast to cut rates 3 times in the remainder of 2025.”
On-Chain Data Is Still Supportive
If liquidity units the tide, euphoria marks the froth. Edwards factors to established on-chain gauges—MVRV, NVT, Energy Value—that have traditionally flashed purple at cycle peaks. Those indicators, he says, usually are not yet there: “In 2025 we still see no signs of onchain Euphoria. Bitcoin today is appreciating in a steady, relatively sustainable way versus historic cycles.”
A chart of MVRV Z-Score “shows we are nowhere near the price euphoria of historic Bitcoin tops.” By distinction, his derivatives composite—the “Heater,” which aggregates positioning and leverage across perps, futures, and choices—has been sizzling enough to warrant short-term warning. “The heat is on… Of all the metrics we will look at here, this one is telling us that the market locally has overheated near all time highs this week.” In his telling, elevated Heater readings can cap near-term upside unless they persist for months alongside rising open curiosity—circumstances more constant with a major top.
One metric, however, eclipses the remainder in 2025–26: institutional absorption of new provide. “Today, 150+ public companies and ETFs are buying over 500% of Bitcoin’s daily supply creation from mining,” Edwards writes. “When demand outruns supply like this, Bitcoin has historically surged over the coming months. Every time this has happened in Bitcoin’s history (5 occurrences), price has shot up by 135% on average.” He emphasizes that the current, prolonged period of high multiples on this measure is “good news for Bitcoin,” while conceding the apparent caveat: no one can know how long such circumstances will last.
Because institutional demand can flip to provide, Edwards particulars a “treasury company early warning system.” He highlights 4 watch-items that his crew tracks “24/7 for cycle risk management and positioning purposes”: a Treasury Buy-Sell Ratio that, if falling, “suggests growing selling by the 150+ companies”; a Treasury CVD whose flattening or lurch into a “red zone” is “risk off”; the share of Coinbase quantity that is web shopping for; and a Treasury Company Seller Count that, on spikes, has traditionally preceded stress.
Layered on top is balance-sheet fragility. The more treasuries lever up to accumulate Bitcoin, the more a drawdown can cascade through compelled deleveraging. “Total Debt relative to Enterprise value are key to track,” he says, including that Capriole will publish a contemporary tranche of treasury-risk metrics “next week.”
Quantum Computers Vs. Bitcoin
Edwards then makes an argument many Bitcoin traders will discover uncomfortable: quantum computing is both an engaging return alternative and Bitcoin’s most concrete long-term tail risk. Capriole, he says, expects “the asset class will outperform Bitcoin by circa 50% p.a. over the next 5–10 years,” citing today’s small market capitalizations against a “$2T+” addressable market.
At the same time, “in the long-term (without change) QC is existential to Bitcoin,” with a worst-case window of “3–6 years” to break the cryptography that secures wallets and transactions. He notes that China “is spending 5X more on QC than the US” and not too long ago “presented a QC machine a million times more powerful than Google’s,” arguing that the tempo of breakthroughs, “with… innovations occurring every quarter,” suggests “this technology will mature sooner than many think. Just like ChatGPT.”
The operational problem, even if the risk isn’t imminent, is the migration path. Edwards sketches back-of-the-envelope constraints: roughly 25 million Bitcoin addresses maintain more than $100; on “a good day,” the community handles about 10 transactions per second. If everybody tried to rotate to quantum-resistant keys at once—and many would prudently ship check transactions—it will take “3–6 months” just to push the transactions through, before even counting the time to obtain consensus on, and deploy, a most well-liked improve. “Optimistically we are looking at a 12 month lead time to move the Bitcoin network to a Quantum proof system,” he writes. He flags work by Jameson Lopp as a place to begin and urges the group to “encourage action on the QC Bitcoin Improvement Proposals (BIPS).” Capriole itself holds quantum-computing publicity both for return potential and as “a portfolio hedge should a worst case scenario eventuate.”
His conclusion is clear without being complacent. “The Bitcoin miner driven cycle is largely dead.” If institutional demand holds, “there is a strong chance of a right translated cycle,” with “a significant period of price expansion still ahead of us.” But vigilance is important.
The two variables to prioritize this halving epoch, in his view, are “Net Liquidity and Institutional Buying,” while the “biggest risk to this cycle” is paradoxically the cohort that has powered it: the Bitcoin treasury corporations whose balance-sheet selections can compound both upside and draw back. Quantum computing, he stresses, “isn’t a risk to Bitcoin this Halving cycle,” but absent motion “it certainly will be in the next one.” The prescription isn’t to worry cycles, but to retire the outdated ones and put together—technically and operationally—for the cycles that stay.
At press time, BTC traded at $119,121.
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