Currently, the biggest challenge in the market is the lack of buying support. The next upward cycle for Bitcoin may benefit from institutional capital that does not rely on leverage.

Compiled by: Deep Tide TechFlow

Guest: Jeff Park, Bitwise Investment Advisor & ProCap BTC Partner and Chief Investment Officer

Host: Anthony Pompliano

Podcast Source: Anthony Pompliano

Original Title: The Bitcoin Bull Market Is CANCELLED?!

Release Date: November 20, 2025

Key Summary

Jeff Park is the Partner and Chief Investment Officer at ProCap BTC. In this conversation, we delve into the reasons behind the recent decline in Bitcoin prices and whether the market is truly signaling the arrival of a bear market. Jeff analyzes key factors affecting market sentiment from the perspectives of liquidity pressure and global macroeconomic changes, pointing out that even if Bitcoin has shown some weakness this year, it may not necessarily be a completely pessimistic signal. We also discuss how Bitcoin's price can return to the highs of $125,000 to $150,000, and how geopolitical dynamics in regions like Japan and China affect the global investment environment.

Highlights

• Harvard is an early investor in the cryptocurrency space. Bitcoin is the largest holding in Harvard's endowment fund.

• Crypto is a typical trend asset. Its characteristic is that prices often fluctuate dramatically with changes in market sentiment, rather than reflecting value through buying low and selling high like traditional value assets.

• If Trump's approval ratings continue to decline, or if other chaotic events affecting cryptocurrency legislation occur in Washington, these could become bearish factors for the market, which may retest the $75,000 support level, breaking the current upward momentum.

• In this sentiment-driven market, investors need to maintain psychological agility and strategic flexibility.

• Currently, the biggest challenge in the market is the lack of buying support.

• The next upward cycle for Bitcoin may benefit from institutional capital that does not rely on leverage.

• In fact, perhaps we need a drop like this to release Bitcoin's "super cycle." If we continue to get caught up in the four-year cycle framework, the market may fall into a psychological burden, believing that 2026 will be a down year.

• In the short term, it may be difficult to see positive signals, as the current global economy faces some very severe issues, such as liquidity crises, geopolitical risks, and Trump himself.

• Unexpected events, like black swan events, could become positive catalysts for Bitcoin, one possibility being that a sovereign nation suddenly announces the purchase of Bitcoin, especially from major developed countries in the OECD; another factor that could drive Bitcoin prices up is a solution to quantum computing issues.

• Future institutional decisions may directly influence user choices.

Why is Bitcoin falling? Should investors be worried?

Anthony:

Recently, Bitcoin prices have been continuously falling, and many investors are feeling very worried. What do you think? What do you believe is happening behind the scenes?

Jeff:

I remember about two or three weeks ago, we discussed the need to readjust expectations for Bitcoin's price movements, especially after a large-scale liquidation event on October 10. This event not only shocked market sentiment but also undermined retail investors' confidence in Bitcoin. Additionally, it affected people's long-term views on the institutional crypto market, which may not be operating as well as everyone expected.

Currently, we still face many unresolved issues. For example, there are rumors that some market makers may be facing bankruptcy risks, which could further suppress the market's risk appetite. This week's market performance has highlighted a core characteristic of cryptocurrency: it is a typical trend asset. The characteristic of trend assets is that prices often fluctuate dramatically with changes in market sentiment, rather than reflecting value through buying low and selling high like traditional value assets. The investment logic for Bitcoin leans more towards "buy high, sell higher," meaning that entering the market is more aligned with its characteristics only when prices break through key levels.

When Bitcoin fell below the important support level of $100,000, many in the market began to worry about the arrival of a bear market. Now the price has dropped to around $90,000, and it even briefly fell below $90,000 last night. In this situation, the market is filled with disappointment, panic, and uncertainty. However, investors who have experienced multiple cycles know that this is precisely the process of market self-adjustment. Ultimately, there will always be new buyers and sellers re-entering the market at price points they deem appropriate, and trend signals breaking through are precisely how the market moves.

At the same time, we need to be patient and recognize that the current uncertainty is not limited to the cryptocurrency market but is a common challenge facing the global macro economy. In this context, I recall a saying from the trading community: "Making mistakes is acceptable, but repeating mistakes is not." Currently, many investors are reassessing their portfolios, waiting for better entry opportunities. This mindset may create a self-reinforcing cycle, further driving down prices. Some are even predicting that Bitcoin could fall to $75,000.

In this sentiment-driven market, investors need to maintain psychological agility and strategic flexibility. At the same time, we must remember that Bitcoin's core characteristic is its nature as a trend asset, which will not change due to short-term fluctuations.

Are technical indicators like the CME gap really important?

Anthony:

I've been following technical analysis, but to be honest, I feel it’s more like a "game rule." I pay attention to what others say, but I don't fully believe in these analyses, nor do I base my decisions on them.

However, recently I've seen many people discussing the CME gap issue, and now that Bitcoin has touched it, the price seems to stabilize and even rise slightly. In your view, are these more technical analysis indicators really important?

Jeff:

Yes, I believe that in a highly technical market like cryptocurrency, paying attention to microstructure is indeed very important and is a key tool for predicting short-term price movements. I usually distinguish between short-term price fluctuations and long-term price trends. Long-term prices can be assessed through trend establishment or mean reversion, but short-term price fluctuations are mainly driven by leveraged trading.

The price of cryptocurrency is largely influenced by the futures market, especially perpetual futures. The characteristics of perpetual futures determine their amplifying effect on price fluctuations, so people pay particular attention to the number of open contracts and different liquidation levels. Since October, we have seen that the interest in leveraged long positions has not significantly recovered, while leveraged short positions remain active. This imbalance can lead market prices to move towards liquidity gaps. The design of perpetual futures is inherently tactical; once liquidation points are reached, forced liquidations occur, further exacerbating price fluctuations.

Currently, the biggest challenge in the market is the lack of buying support. Without new buying entering the market, it is difficult for prices to stabilize or even rebound. I believe that the inflow of institutional capital is a key source for future market rebounds. Therefore, ETF (Exchange-Traded Fund) fund flows have become an important observation indicator. Recently, we have noticed that ETF fund inflows have shown negative growth, which has put some pressure on market sentiment. Additionally, corporate financial conditions and Wall Street's adoption of structured products may also affect market liquidity.

However, my intuition is that there are still some investors who want to increase their exposure to Bitcoin, but they may be waiting for better entry opportunities. Generally speaking, when prices reach a higher margin of safety, investors are more willing to enter the market. In fact, ETF investors are often the most stable participants in the market. If you look at the fund flows of Bitcoin ETFs this year, you will find a significant gap between net inflows and outflows, indicating that these long-term investors still have confidence in Bitcoin.

I believe that the next upward cycle for Bitcoin may benefit from these institutional capitals that do not rely on leverage. They typically hold a long-term perspective and view Bitcoin as part of a global asset portfolio, rather than simply comparing it with other cryptocurrencies. These investors may weigh Bitcoin against assets like gold, Nvidia stocks, and Japanese government bonds to decide whether to increase their allocation to Bitcoin.

Harvard's Bitcoin Holdings and Endowment Fund Investment Strategy

Anthony:

You worked at Harvard for a while. Recently, there have been reports that Harvard's endowment fund's largest holding is actually Bitcoin. Some speculate that this may not just be a simple spot investment but involves some kind of short-term trading strategy.

Can you explain how endowment funds like Harvard typically invest? Should we pay special attention to this news, or are there other noteworthy details that may have been overlooked?

Jeff:

Certainly, Harvard's endowment fund is indeed a very interesting case, and its investment strategy has undergone multiple adjustments during different chief investment officers' tenures. When I worked at Harvard's endowment fund, the fund's management model was very flexible, similar to a hedge fund's operational approach. The internal team directly managed the balance sheet, engaged in high-frequency risk trading, and adopted an SMA (Single Managed Account) structure to improve capital efficiency. However, with the arrival of NARV, Harvard's endowment fund's strategy gradually aligned more with the traditional Yale model, which allocates funds to external fund managers to take on risks while gradually reducing direct internal risk exposure.

Regarding the current investment strategy, I believe their investment exposure is very tactical and specific. For example, if Bitcoin's core returns align with their asset allocation goals, then including it in the portfolio is entirely reasonable. Additionally, they may utilize the price differences between spot and futures to engage in relative value trading. This strategy has historically been widely adopted by institutional investors like pension funds, especially in balance sheet management.

I cannot know the exact operational details of Harvard at present, but in the cryptocurrency market, there are sometimes low-risk or even risk-free arbitrage opportunities. For instance, by hedging Bitcoin risks in different directions, investors can achieve stable returns.

Harvard is actually an early investor in the cryptocurrency space. They have entered this market through venture capital funds for nearly 10 years, so they can be said to be very experienced in this regard and adept at obtaining alpha through various means.

Nevertheless, it is still surprising to see Bitcoin become the largest holding in Harvard's endowment fund. Whether they have adopted a directional long strategy or a market-neutral strategy, it indicates that the scale and depth of the Bitcoin market are now large enough to accommodate such a $55 billion endowment fund's major investment. This was unimaginable five years ago.

Has Options Changed the Market Dynamics of Bitcoin?

Anthony:

I've noticed that the types of participants in the Bitcoin market are becoming increasingly diverse, including retail investors, hedge funds, professional traders, and institutional investors like asset management companies. Companies like BlackRock are entering the market through passive ETF products, while endowment funds may operate using their balance sheets, and some countries and corporate finance departments are also participating in the market through ETFs and other means.

Assuming you have a dollar investment strategy, that dollar may not necessarily flow entirely into the spot market. If someone buys a Bitcoin ETF, theoretically, the funds from the ETF will eventually flow into the spot market, but perhaps only 99.9% or some other proportion will actually enter the spot market.

I wonder if the emergence of options has, to some extent, diverted the capital and energy that would have originally flowed into the spot market?

Jeff:

There are indeed more options available in today's market, and more options mean more complex risk layering, term layering, and asset-liability layering. The emergence of these layers has actually changed the market's direct exposure to Bitcoin spot. In other words, investors can hold Bitcoin indirectly through more complex financial instruments without having to purchase the spot directly.

Before the emergence of these complex financial products, our insights into the crypto market primarily relied on trading volumes from exchanges, dynamics in the derivatives market, and on-chain data analysis. These were the main decision-making bases at the time. However, now there are new decision nodes in the market, especially with the participation of large institutional players. They invest in Bitcoin-related assets through various credit instruments, and the price fluctuations and yield of these instruments directly affect the demand for Bitcoin. For example, companies like MicroStrategy utilize these tools to accumulate Bitcoin, which was not possible in the past.

Although the current trading volume in the market is not particularly high, I believe the impact of these complex products is even more important than the trading volume itself. For instance, last week there was news that an investor purchased nearly $900 million worth of Bitcoin in one go, which became one of the biggest news stories in the market recently. This indicates that physical buying (i.e., directly purchasing spot Bitcoin) remains the core driving force of the market.

The market has indeed changed from the past, but ultimately, the dynamics of the market still depend on those investors who wish to gain exposure to Bitcoin and take on Bitcoin risk. This demand must be realized in some way, which usually means someone is buying actual Bitcoin on the other end.

What Signals Does Jeff Pay Attention to for Market Optimism?

Anthony:

In the current market downturn, where sentiment is generally pessimistic, what areas do you think can show optimistic signals? We’ve noticed that some large holders have started buying Bitcoin between $89,000 and $90,000. Although there is a constant stream of bad news and people are very worried, can you point out some market signals that give you hope?

Jeff:

One optimistic signal for me is that Bitcoin has shown resilience in its intraday price fluctuations compared to other risk assets. Even as the stock market has plummeted due to the so-called "AI bubble," Bitcoin seems to be less affected. For example, if Palantir's stock price drops by 40%, I don't think Bitcoin would drop by 40% in the same timeframe. Once the correlation between Bitcoin and other assets is broken, this independence will attract institutional investors, as Bitcoin can provide different performance in their portfolios.

For institutional investors, a key reason for choosing Bitcoin is that its performance needs to differ from traditional assets. As long as Bitcoin can demonstrate this "orthogonality" (i.e., low correlation with other assets), it has the opportunity to be included in more portfolios. Although Bitcoin's gains may not currently match those of gold, and its volatility may not be as pronounced as Nvidia's, these differences are precisely Bitcoin's unique advantages. From a long-term perspective, this characteristic means that Bitcoin's demand and potential will further increase. I think this is a very optimistic aspect.

Additionally, the volatility of Bitcoin's price is also a noteworthy characteristic. For instance, Bitcoin might drop $35,000 in 40 days, but it could also rise $35,000 in 20 days. This rapid change in sentiment can act as a catalyst for the market, especially when investors view it as a unique asset exposure.

Has the Four-Year Cycle Officially Failed?

Anthony:

Additionally, the volatility of Bitcoin's price is also a noteworthy characteristic. For instance, Bitcoin might drop $35,000 in 40 days, but it could also rise $35,000 in 20 days. This rapid change in sentiment can act as a catalyst for the market, especially when investors view it as a unique asset exposure.

Jeff:

I believe that, logically and fundamentally, the theory of the four-year cycle is no longer applicable. This theory was originally based on Bitcoin's "halving" events, but now the impact of halving on new demand in the market has significantly weakened. The current market is more driven by the capital demands of institutional investors, so a new cycle that aligns more closely with institutional investment behavior should emerge.

However, the four-year cycle theory may still persist because there are still many investors who believe in its validity. These investors are often early supporters of Bitcoin, and their belief in the four-year cycle almost takes on a "prophetic" quality. If we look at the current holdings of Bitcoin, wallets holding over 10,000 Bitcoins still control about one-third of the market's supply. This means that if these large holders believe the four-year cycle is real and act according to this theory, then this belief may become self-fulfilling and continue to influence market prices. Although rationally this shouldn't happen, the structural realities of the market make it possible.

Interestingly, Bitcoin's price is now below the level it was at the beginning of the year. If the price continues to decline by the end of this year, it would effectively break the pattern of the four-year cycle, potentially leading us into a new "three-year cycle."

In fact, perhaps we need a drop like this to release Bitcoin's "super cycle." If we continue to get caught up in the framework of the four-year cycle, for example, if Bitcoin only rises 5% in 2025 and ultimately closes at $98,000 or $99,000, the market may fall into a psychological burden, believing that 2026 will be a down year. Therefore, I actually hope the market can fully adjust this year, ending the reliance on the four-year cycle and opening up a whole new growth phase for the future.

Anthony:

We all know that Bitcoin has had astonishing performances in a short time. Do you think it is possible for it to rebound quickly in the next six weeks, even reaching $140,000?

Jeff:

It is certainly possible. The Bitcoin market is full of uncertainty, and anything can happen. I believe that what we hope to see is either Bitcoin significantly rising before the end of the year, making this an important up year; or it slightly declines this year, allowing us to completely break free from the constraints of the four-year cycle and clear psychological barriers for the market development in 2026 and beyond. Regardless, the Bitcoin market is always full of possibilities.

Macro Risks: Liquidity, Global Conflicts, and the "Trump Premium"

Jeff:

From a realistic perspective, what kind of catalyst do we need to drive change in the market? To be honest, I think it may be difficult to see positive signals in the short term, as the current global economy faces some very severe issues. For example, the "K-shaped economy" we mentioned earlier indicates that the divergence in economic growth is intensifying, which is clearly a long-term issue. Additionally, the U.S. economy may face more adverse factors, such as a liquidity crisis. Right now, the market's focus has even surpassed the question of whether the Federal Reserve will cut interest rates in December. While interest rate policies do have an impact, the bigger issue is the overall economic uncertainty and widespread anxiety.

At the same time, geopolitical risks are also on the rise. For instance, the recent territorial disputes between Japan and China over the Diaoyu Islands could lead to larger conflicts. For many Westerners, this may be a relatively unfamiliar event, but essentially, it could very well become the trigger for Asia's "Third World War." If this conflict escalates, it could involve Taiwan, Japan, and South Korea. As far as I know, Japan sent some diplomats last night in an attempt to ease the situation, but China rejected this proposal and took a hardline stance, indicating that the situation is not developing positively. This game reflects China's feeling of being cornered in its trade war with the U.S., thus using it as a bargaining chip. However, resolving these issues often takes a long time.

If this geopolitical uncertainty persists, it could become a major reason for the market to avoid risk, even taking precedence over the impact of the Federal Reserve's interest rate cuts. In this case, the possibility of Bitcoin rising to $150,000 would also be suppressed.

Another risk worth noting is Trump. If we believe in the so-called "Trump umbrella" theory, then Trump's policies and influence could be one of the main reasons for Bitcoin's rise from $75,000 to $125,000.

However, it is also important to note that if Trump's approval ratings continue to decline, or if other chaotic events affecting cryptocurrency legislation occur in Washington, this positive influence could reverse and even become a negative factor for the market. We need to ask ourselves whether these risks have been fully priced into the market. If not, the market may retest the $75,000 support level, breaking the current upward momentum.

Of course, what the specific catalyst is, is currently difficult to predict. Anything can happen, but generally speaking, true catalysts are often some unexpected major events.

What Would Be an Unexpected Positive Event for Bitcoin?

Jeff:

Unexpected events, like black swan events, could become positive catalysts for Bitcoin. So, what kind of black swan event would have a positive impact on Bitcoin? I think one possibility is that a sovereign nation suddenly announces the purchase of Bitcoin, especially a major developed country in the OECD. If one morning we wake up to such news and that country actually takes action, Bitcoin's price could soar to $150,000 overnight. However, such news must be genuine, not the kind of fake news we've seen over the past year.

Another factor that could drive Bitcoin's price up is a solution to the quantum computing problem. Quantum computing has long been viewed as a potential threat because it could crack Bitcoin's encryption algorithms. But if we revisit this topic, suppose some large Bitcoin holders (the so-called whales) are selling, their reasons may be as irrational as when they bought in 2012 or 2011. Therefore, we must view these tail events (i.e., extreme events) as potential catalysts for changing their behavior. If these whales are concerned about the threat of quantum computing and a solution emerges in the market, it could at least alleviate selling pressure. Once the selling pressure decreases, we could see buying gradually providing more funding support for price movements.

This is not just a demand-side issue; the supply side also needs to adjust. We need to rebalance the supply and demand relationship in the market to create better conditions for Bitcoin's price.

Additionally, this weekend, a prominent cryptographer, Sorensen, made a concerning statement. He mentioned that by 2028, the cryptographic algorithms used by Bitcoin could be compromised by quantum computing. This is much earlier than many had anticipated. The timeframe we are discussing is merely the next four years. This potential risk hangs over Bitcoin like a cloud. Only when these catastrophic tail risks are thoroughly addressed will the supply-side shocks disappear, allowing the market to achieve true stability and growth.

How to Assess the Risks of Quantum Computing?

Anthony:

Regarding quantum computing, I often tell people that there isn't a true quantum computer yet. While scientists may be getting closer to this goal, it remains a theoretical threat. It's like flying cars; although research and progress are ongoing, it hasn't been realized.

So should we be worried about this technology? Would you try to assess its risks? Or give it a probability? Or would you wait until that day to address it? What are your thoughts on this issue?

Jeff:

I think we can observe the market's reaction, such as what drives people's interest in cryptocurrencies and how they "vote" with their funds and wallets. Recently, we've seen Zcash's price surge significantly over the past two months, which is related to discussions around quantum resistance. Zcash is considered to have an advantage over Bitcoin in addressing quantum computing threats, thus attracting a large influx of capital, indicating that market concerns about the potential risks of quantum computing are intensifying.

From my perspective, the topics of quantum computing and privacy protection are very important, but this issue may be overstated given the divisions within the Bitcoin developer community. While we cannot accurately assess the threat of quantum computing to Bitcoin in the short term, we can evaluate the health of the Bitcoin developer community. Whether the developer community is united and able to collaborate with supporters will affect Bitcoin's technological development and market confidence. However, the current state of the developer community is not ideal, and many early investors are disappointed with the divisions within the community.

Perhaps we can use some social intelligence analysis tools to observe the willingness of the developer community to address technical issues and their emotional changes, such as the fear and greed index. But from the current situation, this sentiment seems to be at a historical low. If you talk to those who experienced the block size debate in 2017, they would find many similarities between the current situation and the circumstances that led to the split in Bitcoin at that time. If a soft fork or hard fork event does occur in the future, market sentiment will become more tense before these splits happen, as most people do not want to take on additional risks in such an uncertain environment.

Anthony:

If a fork event really occurs, can you imagine how large financial institutions would react? They might say, "Wait, Bitcoin is forking? Am I going to get two coins? Should I hold them? Sell them? Or hedge the risk?" This situation sounds both concerning and exciting.

Jeff:

Actually, I have some anticipation about this. Such a situation could be an opportunity for companies like Bitwise to differentiate themselves from traditional financial giants like BlackRock. We know that cryptocurrencies are active technological assets that require professional services to manage. And we might adopt different strategies to cater to clients with varying risk tolerances. I recall the block size debate in 2017. At that time, Coinbase decided not to support Bitcoin Cash, while Kraken chose to support it. As a result, many users switched from Coinbase to Kraken, indicating that institutional decisions can directly influence user choices.

Original link: https://m.youtube.com/watch?v=ontfayNLnLE

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