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

Brief Summary

This video discusses the potential paths for the crypto market in the second half of 2025, focusing on whether the traditional four-year cycle will hold or if new factors will extend the bull run. It presents three possible scenarios for altcoin season, influenced by macro factors like Fed policy, deregulation, and the impact of TradFi. The video also assesses the likelihood of each scenario, providing a data-driven outlook on the future of the crypto market.

• Q3 2025 is crucial for investors to choose between the old four-year cycle and a new cycle framework.
• The traditional four-year cycle may be disrupted by macro events and the increasing influence of TradFi in crypto.
• Three scenarios are presented: a short alt season in late 2025/early 2026, a two-stage run with a break, and a continuous run into late 2026.

Introduction: The Crucial Quarter

The content creator believes that Q3 2025 will be a pivotal period for investors, determining whether they follow the traditional four-year cycle framework or adapt to a new cycle influenced by changing market dynamics. The path chosen during this quarter will significantly impact potential gains, distinguishing between substantial returns and average market performance. The creator aims to provide a detailed analysis supporting this viewpoint, highlighting the importance of understanding these shifts to capitalise on market opportunities.

The Misunderstood Four-Year Cycle

The presenter addresses the common investment quote, "This time it's different," clarifying that while timeless patterns exist, market dynamics are subject to change. The traditional four-year crypto cycle, often attributed to Bitcoin halvings, is not guaranteed to repeat indefinitely. The presenter argues that the cycle's origins are rooted in macroeconomics, particularly global M2 year-over-year growth, rather than solely the halving events. The COVID-19 pandemic significantly disrupted the established patterns, acting as a "boulder" in the pond, altering the ripple effects seen post-2008 financial crisis.

The Impact of TradFi and Policy Tightening

The increasing presence of TradFi in the crypto space, marked by ETF flows and Wall Street's growing involvement, has fundamentally altered the market. The Fed's rapid policy tightening post-2021 has led to tighter credit conditions and slower global liquidity growth compared to previous cycles. The presenter highlights that the net gain in liquidity is significantly lower this cycle, with percentage growth around 11% compared to 35% in 2013, 33% in 2017 and 80% in 2021. Additionally, the current cycle has seen an unprecedented 40 months of tightening, contrasting with 25 months before the 2017 cycle and 19 months before 2021.

Trump's Influence and the Need for Growth

The presenter discusses the potential influence of Donald Trump's policies on the crypto market, particularly his desire for lower interest rates to stimulate economic growth. Trump aims to leave a legacy of economic success and is pushing for rate cuts to achieve this. The presenter notes that without the liquidity from TradFi, the crypto market would be significantly weaker. The presenter also points out that the economic environment has been harsher than in past cycles, impacting the performance of altcoins.

Three Potential Scenarios for Altcoin Season

The presenter outlines three potential scenarios for how the crypto market might unfold:

1. Short-Lived Alt Season (30% probability): Alt season starts in late 2025 and bleeds into early 2026, driven by a Fed rate cut in September, approval of altcoin ETFs, and historical bullish trends at the end of the year. However, it's cut short by rising CPI, limited Fed cuts, and an unhealthy market state due to insufficient liquidity.
2. Two-Stage Bull Run (26% probability): Alt season begins in late 2025, extends into early 2026, pauses over the summer, and then experiences a blow-off top in late 2026. This scenario relies on Trump's influence leading to more aggressive rate cuts in 2026, along with deregulation and other stimulative measures.
3. Unbroken Bull Run (26% probability): Alt season starts in late 2025 and continues uninterrupted into late 2026, culminating in a blow-off top. This is also based on the expectation of significant rate cuts and deregulation in 2026.

Factors Supporting the Extended Bull Run Scenarios

The presenter elaborates on the factors supporting the second and third scenarios, which involve an extended bull run into 2026. These scenarios hinge on Trump's ability to appoint a Fed chair more aligned with his goals of low interest rates and deregulation. The presenter mentions the potential for the Fed to implement measures like the SLR exemption and Basel 3 delays, further stimulating the economy. The presenter also highlights the importance of crypto-specific deregulation, such as the FIT21 bill and the SEC providing a framework for crypto innovation.

The Possibility of No Alt Season

The presenter acknowledges an 18% chance of no alt season occurring. This could result from the Fed delaying rate cuts, CPI reaccelerating, a hawkish Fed chair appointed by Trump, and regulation failing to progress as expected. Despite this possibility, the presenter emphasises that there is an 82% chance of one of the three positive scenarios playing out, with a greater likelihood of the bull run extending into late 2026, potentially marking the first five-year cycle in crypto.

Conclusion: Staying Informed and Adapting

The presenter concludes by stressing the importance of staying informed and adapting to new data as it emerges. The presenter commits to providing ongoing updates and analysis to help viewers navigate the evolving market landscape. The presenter also promotes the Obsidian Council for weekly market updates and reminds viewers that the information provided is not investment advice.