In the latest episode of The Milk Road Show, Charles Edwards, founder of cryptocurrency hedge fund Capriole Investments, provided that an in-depth analysis of Bitcoin’s current state, its future trajectory, and the potential end of Bitcoin’s time-honored 4-year cycle.

Edwards bets that Bitcoin’s trip to $100,000 could be the catalyst for an unprecedented price acceleration. He suggests that once this psychological and technical barrier is broken, Bitcoin could potentially double in value in a matter of weeks. Comparing 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 for a really elderly asset. For Bitcoin to escalate from 100,000 dollars up to 200 thousand dollars, it will be just $2 trillion for assets that are traded 24 hours a day, 7 days a week and are more widely available around the world.

He emphasizes that Bitcoin’s relatively smaller market capitalization compared to gold allows for faster price movements. Historically, after surpassing previous all-time highs, Bitcoin has experienced significant and rapid appreciation, entering periods of price discovery where supply constraints can lead to vertical price increases.

When will the price of Bitcoin double?

The value of $100,000 is not just a round number; represents a significant level of resistance due to several factors. Edwards highlighted the presence of a significant sell wall at this price point, noting: “We have the largest sell wall we have ever seen on the Bitcoin order books at $100.00. “I think yes, once you get that straightened out, then you know that everyone who wanted to sell has sold and there’s a really sharp, vertical movement of price appreciation because there’s just no more supply.”

Additionally, many investors who entered the market at lower prices may see $100,000 as the optimal time to take profits, which could create selling pressure. Edwards, however, remains bullish that this barrier will be breached, especially over the next few months given the seasonal strength seen in Bitcoin price movements in the fourth and first quarters.

“We are [at a point] in a cycle in which we have a seasonal nature and it is, in a sense, the optimal period of two to four months, […] maybe five to six months every four years. After each Halving every four years, you have approximately 12 to 18 months during which you earn 90% to 95% returns on all cycles over every four years. So most events happen only during this one year. If we look at Q4 and Q1, that’s the majority of returns again […] when, first of all, there will be a mighty monthly break in history,” said the hedge fund’s CEO.

While Edwards is bullish about Bitcoin’s prospects, he cautions investors about the market’s inherent volatility. He emphasized that corrections of 20-30% are a normal phenomenon during a bull market and investors should be prepared for such fluctuations. “It is normal to experience 30% declines every few months during a Bitcoin bull market,” he noted.

Factors such as increasing leverage in the market can exacerbate price fluctuations. Edwards mentioned that if leverage and funding rates continue to escalate without weakening the existing sell wall, Bitcoin could return to lower support levels, potentially around $80,000. However, he emphasizes that such volatility is a natural part of Bitcoin’s growth cycle and does not necessarily indicate a long-term downturn.

The end of the time-honored 4-year cycle?

A significant point of discussion was whether the time-honored 4-year cycle, largely driven by halving events, was coming to an end. Edwards believes that as Bitcoin matures and becomes more deeply integrated into time-honored financial systems, the halving’s impact on market cycles will decrease.

“As Bitcoin’s inflation rate declines and it becomes more integrated with traditional finance, four-year halving cycles may become less effective. The large 80% declines we have seen in the past may not occur in future cycles,” he said.

This maturation process can lead to more stable growth patterns and less variability. Edwards suggests that future cycles may see shallower corrections, possibly by around 60%, rather than the dramatic declines of previous years.

It is worth noting that several potential catalysts could push Bitcoin’s price to unprecedented levels. Edwards mentioned the possibility of the U.S. government creating a strategic bitcoin reserve under President-elect Donald Trump.

While he estimates the probability of such an event in 2025 to be around 30%, he admits that such an event would be a game changer. “Conceited [the U.S. government] not selling its existing shares is great, but probably won’t support the cycle much. Actively buying Bitcoin can be a game changer,” he noted.

Corporate adoption is another crucial factor. The potential for enormous corporations to add Bitcoin to their balance sheets could drive significant demand. Edwards highlighted Microsoft’s upcoming vote on the matter, saying, “Let’s hope it’s Microsoft [on December 10]”

Moreover, the success of spot Exchange-Traded Funds (ETFs) has opened the door to institutional investors. Sustained demand from ETFs continues to eat into Bitcoin’s supply. Edwards noted: “ETFs have just been ferociously sucking Bitcoin out of the system.”

Bitcoin price predictions

Edwards presented a basic and bullish scenario for Bitcoin’s price this cycle. He stated, “I would be surprised if we don’t raise $140,000.” In this basic case, stable market conditions were assumed without any unusual positive events.

In a more bullish scenario, he believes Bitcoin could reach $200,000, especially if significant catalysts such as government or corporate adoption materialize. “We could easily get $200,000. Once we get those historical highs out of the way, Bitcoin hits multiples very quickly,” he explained.

He concluded: “Once we get above $100,000, people who are not interested in Bitcoin will simply not be able to understand Bitcoin above $100,000 […] That’s when you see a real switch and there’s a flow.”

At the time of publication, the BTC price was $94,814.

Featured image created with DALL.E, chart from TradingView.com