Translation & Organization: Deep Tide TechFlow

Guest: Michael Terpin (Founder and CEO of Transform Ventures, Author of "Bitcoin Supercycle")

Hosts: David Lin, Bonnie Cheung

Original Title: Is Shorting Bitcoin the Right Move? Crypto Father: This Price Level is the Last Line of Defense!

Podcast Source: Bonnie Blockchain

Broadcast Date: May 14, 2026

Editorial Introduction

In this podcast episode, Michael Terpin offers a bold judgment: Around 60K is likely not the true bottom of this cycle; the two-to-one odds tend to continue downward to the 48K–57K range, with the timeframe pointing to this October.

As someone labeled the "Crypto Father" by CNBC and a guest at Saylor's private events, Terpin reveals the insider reasoning behind Saylor's shift in thinking: The 11.5% dividend pressure from STRC means Strategy must retain the "escape valve" of selling coins to pay, which is not a strategic shift but a function of the financing structure. Furthermore, he maintains his long-term goal of Bitcoin reaching a million dollars by 2033 and asserts that AI tokens will outperform Bitcoin in the next three years. He also predicts that the real target of quantum computing threats isn't BTC but smart contracts on Ethereum, and Satoshi aligned the halving cycles with U.S. elections for a reason.

Key Quotes

Saylor's Turn Towards the STRC Financing Structure

• “Saylor is currently allowing for a potential need to sell coins to pay dividends because his financing source has changed. STRC has become a product driven by both retail and institutional forces, the 11.5% dividend is roughly three times the yield on treasury bonds; he must demonstrate he can pay out in extreme situations.”
• “Saylor's goal is to gradually raise his monthly purchasing amount to 10 billion dollars, then 100 billion, 1 trillion, and 10 trillion dollars. I don’t know if he can hit 10 trillion, but achieving 10 billion in monthly purchases in the foreseeable future is definitely possible, creating enormous buying pressure and setting a floor for Bitcoin against declines.”
• “His OTC purchases don’t immediately push prices up; in fact, they are surprisingly gentle. OTC was originally used to conceal buying and selling actions.”

October Bottom Theory

• “We currently have about a 60% probability of still heading down, targeting the 48K–57K range. However, unlike the judgment in February, I no longer believe it will dip below 40K; the buffers provided by STRC and ETF have raised the lower limit.”
• “Historically, each bottoming process takes about a year: the last round took a whole year; the one before that was just under a year; and the first halving cycle took a year plus a few weeks. If this round ends in 12 weeks, it would mean that many historical patterns fail simultaneously, which is very unlikely.”
• “The Coin Days Destroyed indicator points to a bottom around 42K, which has been accurate in previous rounds. Additionally, the 23-month 'First High to Bottom' and 35 months 'Bottom to Top' empirical data all point to October being the bottom.”
• “The main sellers now aren’t the whales; they sold out back in September, October, and November of last year. Today, most selling pressure comes from liquidations; the proliferation of perpetual contracts and 100x leveraged tools means retail investors are being liquidated far more than four years ago.”

Supercycle, Diminishing Returns, and Satoshi's Design Intent

• “From 1/10 of a cent to 30 dollars is 3000 times, the second round is 100 times, the third round is 30 times, and the fourth round was originally expected to be 10 times but only achieved about 8 times due to macro headwinds; this is the true mathematical structure of the halving cycles.”
• “A supercycle must meet two conditions: lasting over 5 years and a fundamental change in the asset's core narrative. CME suggested that currency depreciation in 2023 might initiate a new supercycle, but it remains uncertain; by 2025, the answer will be clear.”
• “I don’t believe it’s a coincidence that Satoshi aligned halving times with U.S. elections; each halving occurs around election years, and bear markets fall during midterm election years. This shows he has a very precise understanding of economic rhythms.”

Quantum Threats, AI Tokens, and Bitcoin's Relationship

• “Quantum computing can realistically crack Bitcoin in about 15 to 20 years. Before that, attackers will first target other SHA-256 targets—defense, hospitals, banks, etc.; breaking into Satoshi's wallet is much harder than breaking into JPMorgan.”
• “My real worry isn’t quantum cracking Bitcoin, but a cutting-edge AI model (like a Mythos-level model that OpenAI doesn’t dare release) falling into the wrong hands, breaking into a significant smart contract on Ethereum, like Lido, which has staked a vast amount of ETH. That would be the potential FTX moment of this round.”
• “In the next three years, leading AI tokens will outperform Bitcoin. A substantial portion of that capital will ultimately flow back into Bitcoin, coupled with stablecoin users having wallets for the first time, significantly reducing friction costs to enter Bitcoin.”

Jane Street's Selling Pressure and Wall Street's Strategies

• “There have been widespread reports of Jane Street systematically dumping Bitcoin half an hour after the U.S. stock market opens while simultaneously building short positions. I lack direct evidence, but the extent of these reports suggests it likely occurred. After this operation ceased, prices went up—this alone confirms something.”
• “The classic strategy from the whale era is: large OTC purchases, shorting at small exchanges, with arbitrage bots pulling the market price down, ultimately profiting from both closing shorts and OTC discounts. This approach has existed in the gold market for a long time, and now Wall Street has brought it into Bitcoin.”

Saylor's Strategic Shift

Host David: Welcome back to the show. We are once again at Consensus Miami and are pleased to have Michael Terpin with us for the second time within a year. Michael is the author of "Bitcoin Supercycle," labeled by CNBC as the "Crypto Father," and is the founder and CEO of Transform Ventures. Today, we want to hear his insights on Bitcoin's next steps.

Host Bonnie: Michael, we will talk about Bitcoin's direction shortly, but first, please answer an immediate question—what do you think about Saylor's strategic shift? I know you are a major investor in STRC, and you discussed it with us three months ago.

Michael Terpin: He himself says this isn’t a shift, and it relates to his current financing sources. I have discussed this with Saylor numerous times, and I’ve always advocated that if your goal is to accumulate more Bitcoin long term, you should sell at the top and buy back at the bottom; that’s the core argument in my book, and my fund operates this way too.

Saylor told me about two years ago that if he acted in any way other than 'always buy,' Wall Street buyers would question his thesis and would no longer write him blank checks. At that time, his financing sources were institutional buyers of preferred stock and other financial tools. But STRC has changed; it is now a product driven by both retail and institutional forces.

The market is now concerned about how he will pay the 11.5% dividend. This is nearly three times the yield on treasury bonds but still relatively safe. He must prove he can sell Bitcoin to pay the dividend, but that doesn’t mean he actually will sell. Historically, Treasury companies were forced to sell coins because the board was in crisis, or the market had crashed to the bottom. Saylor is not in that situation. He and Strategy are firm long-term holders; this financial engineering structure of borrowing at 11.5% to achieve annual appreciation of over 20% is viable. But it requires an “escape valve” for the possibility of needing to sell. Personally, I really don't believe he will do so in the short term.

Long-Term Path to One Million Dollar Bitcoin

Host David: A year ago at BTC Vegas, you predicted Bitcoin would reach a million dollars by 2033; does that judgment still hold?

Michael Terpin: Yes. I have made no adjustments to my million-dollar prediction. We are currently in the “autumn of Bitcoin” (the downward phase of the four-season framework proposed by Terpin). The only real change from a year ago is the emergence of STRC, which has enabled the Strategy to complete a purchasing scale that was impossible in a bear market. At the last ex-dividend date, he raised around 7 billion dollars.

Last week at the Bitcoin Conference in Vegas, after his keynote, he held a session for the whales. He stated his target is to raise the monthly purchasing amount to 10 billion, then 100 billion, 1 trillion, and finally 10 trillion dollars. I don’t know if 10 trillion can be achieved, but 10 billion in monthly purchases is certainly achievable in the near future; 100 billion is also foreseeable. This is immense buying pressure, which I believe sets a floor for the lower end of this bottom.

In February, because the price did not touch the 200-week moving average, I judged that it wasn't a true bottom. It needed to breach 57K to be considered a true touch; but it only dipped to 60K before rebounding sharply. The past three panic surrender stages have not rebounded this strongly; they typically result in prolonged consolidation where everyone loses interest in Bitcoin.

Who is Driving the Price?

Host David: Earlier today, we interviewed Saylor, and he humbly stated that his buying does not push the price up. What’s your take?

Michael Terpin: I wouldn’t say his buying has no effect on the price. I would say he sets a floor for the downturn because I believe if it drops to around 39K, he will buy even more. Simultaneously, the price usually rises only slightly during his purchases because he uses the OTC channel, which inherently conceals buying and selling actions. Historically, many fluctuations during the whale era stemmed from large OTC purchases followed by public market sell pressure, leading to price declines while simultaneously shorting. This is a tactic that Wall Street has employed in other assets before. I believe the drastic fluctuations around October 10th showed signs of this kind of maneuver.

Host Bonnie: As more and more whales or institutions accumulate larger shares, how will Bitcoin’s volatility change?

Michael Terpin: The proportion of whales hasn't actually increased; the institutional share has risen. But I believe that the batch of whales selling in October will proportionally buy back at a larger scale. This is the core of the “four seasons theory”: fear and greed drive seasonal shifts; the price sold during the last stage of Bitcoin's summer is much higher than in the initial stage of Bitcoin's autumn. If you can accurately determine the “first day of autumn” (bubble burst) and the “last day” (panic surrender), achieving over four times returns within a single cycle isn’t difficult.

Host David: If institutions treat Bitcoin as permanent capital accumulation, does that make the market less liquid and more volatile?

Michael Terpin: If it’s true permanent capital, yes. But ETFs are not permanent capital; funds will still flow in and out. However, ETF holders do indeed have a lower turnover rate than first-generation retail investors. First-generation retail holders dislike self-custody and find even Coinbase cumbersome, preferring to buy through traditional brokerage accounts like Charles Schwab. Historically, they’ve sold on stops when prices fell, but the selling ratio is now more moderate compared to retail investors four or eight years ago who “bought high because friends said to, and panicked sold near the bottom.” This might be because they call brokers who persuade them to keep investing in IRAs (Individual Retirement Accounts) long-term.

Host Bonnie: Saylor's large OTC purchases mean someone is selling to him. Is it whales selling?

Michael Terpin: Whales sold out long ago. The main sellers now are liquidation trades, with perpetual contracts and various new derivatives causing far more liquidation strategies than four years ago. Four years ago, BitMEX was the first to offer 100x leverage, and now platforms like Hyperliquid also offer it. Plus, with the popularity of trading bots, many retail investors feel like geniuses after making a little profit, thus they begin to over-leverage and end up getting liquidated. The scale of liquidations can be directly seen on-chain; it may not be the vast majority of selling pressure but constitutes a significant portion.

Host Bonnie: You mentioned that whales sold out; are these whales trading, not in cold wallets?

Michael Terpin: The vast majority of whales hold in cold wallets. The proportion of those sold is roughly around 10% of wallets holding coins for over 8 years, especially 10 years; most old wallets have never moved or have only moved once to transfer coins to cold storage for operational security. In each four-year cycle, they sell near the top and only buy back once a bottom is confirmed. They usually sell a bit early and buy a bit late because they always feel it can go lower, which has been very clear on-chain during the cycle from 2021-2022.

Why 60K is Likely Not the Bottom

Host David: The last time we talked, Bitcoin was at 60K, and you judged that it would go lower.

Michael Terpin: Yes, that was during our conversation in Hong Kong. This time it dropped close to the bottom but didn’t actually touch it; according to Saylor, the drop in February was the bottom. If February was indeed the bottom, that would mean that most indicators in historical patterns failed simultaneously. Each round typically only has one or two indicators changing, but when most change at the same time, you need to reconsider the entire cycle’s judgment.

First, historically, each cycle's bottom takes about a year; the last cycle took an entire year, and the one before that was three days to a year. If this round ends within 12 weeks, the panic surrender across time dimensions would be insufficient; those who weren't stopping out but genuinely lack conviction haven't truly given up yet.

Second, technical indicators point to October as the bottom. The Coin Days Destroyed indicator (which measures the selling intensity of long-term holders) points to about 42K; this indicator has been accurate historically. Furthermore, there’s the time window of 'First High to Capital Surrender': the past two times have been 23 months. Added to the pattern of 'Bottom to Top being 35 months’, it has been about 35 months from the last peak until now, aligning perfectly with the bubble burst timing. These two indicators of 23 months and 35 months both point to October this year.

The only controversy is that this round has experienced a 'First New High' before the halving (after the ETF's approval, it surged to 73,850 dollars in March 2024 before retreating), which is the first occurrence in history. If we calculate 23 months from that ETF month, it points back to February, coinciding with that 60K low. Hence, my judgment has always been: there is a 70% probability that the bottom hasn’t been reached. Today’s price just pulled to 83K; I see it as a good shorting opportunity, and my fund is doing so. However, there’s also about a 40% probability that the bottom has already formed; thus we need to hedge inversely. Overall, the odds are leaning towards a continued downturn at a ratio of two-to-one; I sold in the high 80s, aiming to buy back in the 60K or even 50K range.

Compared to February, the only change is that I no longer believe it will drop below 40K; the buying from STRC and ETF provides a buffer. Every halving cycle shows diminishing returns, and the extent of price drops is also diminishing. This round has the lowest returns historically; originally, I expected threefold increases under neutral macro conditions, but it only reached around double. Initially, I expected a drop of about 66%; currently, it has dropped approximately 54% from 126K to 60K. So ultimately, I estimate the bottom will be in the 48K–55K range, possibly even up to 57K. As long as it drops below February’s 60K and touches the 200 week moving average, the narrative of the cycle remains valid.

Will the Impact of AI on the Software Industry Spread to Bitcoin?

Host Bonnie: AI is upheaving the entire software industry. The IGV ETF (software index ETF) has dropped approximately 25% since the beginning of the year, and mainstream media claims, “Anything built on code is being repriced.” Bitcoin, also based on code, will it face similar repricing?

Michael Terpin: No. Bitcoin has withstood countless attacks. No Mythos-level model can break Bitcoin’s code; its protection is too robust. Bitcoin is not just code, but also all the blocks that have been permanently sealed. The threat from quantum computing suggests that theoretically it could brute-force private keys, compressing what used to take billions of years to test all combinations of a 45-character alphanumeric string down to minutes, but I believe we have another 15 to 20 years before that happens.

Moreover, before attacking Bitcoin, quantum computing would first target other systems based on SHA-256 (the encryption hash function used by Bitcoin)—defense systems, hospitals, banks, etc. To crack Satoshi's wallet, you first have to get through Morgan Stanley. Bitcoin operates by cracking wallets one by one; it can't be cracked across the entire network at once; this is its decentralization advantage.

What I truly worry about is an AI breaking into a significant smart contract on Ethereum, leading to a crash in Ethereum's price and dragging Bitcoin down with it. I think this represents the most likely "FTX moment" between now and October, such as a breach of Lido (Ethereum's largest liquid staking protocol), where massive amounts of staked ETH could get siphoned off to North Korea. Events of that magnitude could drag Bitcoin down to around the 40K range. If there’s no such black swan, merely standard hedge fund liquidations could lead to a fall below 60K.

Host Bonnie: Everyone is talking about quantum cracks in Bitcoin, but few mention Ethereum. Can quantum computing crack Ethereum first?

Michael Terpin: I’m not saying quantum cracks Ethereum itself; I’m saying smart contracts based on Ethereum might be broken by a new generation of cutting-edge AI models. For instance, it’s rumored that OpenAI has some Mythos-level models it’s afraid to release, and now other labs have models of similar strength. If such technology reaches the wrong hands, they will actively seek vulnerabilities. Looking back at history, the closest Ethereum came to collapse was the 2016 DAO attack; at that time, Vitalik and the community decided to roll back the Ethereum main chain to erase the hacker theft. At that point, 60 million dollars represented a double-digit percentage of Ethereum's total market cap, with prices plunging from 30 dollars to about 6 dollars before eventually recovering.

Bitcoin's, NASDAQ's, and Gold's Interconnection and War Safe Haven

Host Bonnie: From the perspective of a supercycle, why have Bitcoin, NASDAQ, and gold all moved in sync over the past three months? I plotted them on a single chart, and setting aside the 10-year yield orange line, the other three have shown very consistent trends over the past six months.

Michael Terpin: During this period post-war, Bitcoin actually had a brief independent market; it consolidated and then rallied, while gold didn't follow suit during this time. I haven't done day-by-day comparisons, but Bitcoin outperforming gold post-war has been quite rare in recent years.

Host Bonnie: Does this mean that gold as a narrative for anti-war hedge is being supplanted by Bitcoin?

Michael Terpin: We're not there yet. The narrative "Bitcoin is digital gold" has been the main narrative for many years; although its scale is still far smaller than the gold market, Bitcoin has characteristics many view as more robust than gold, such as scarcity; every four years, the addition is halved, whereas gold increases approximately 1.5% of its stock annually. If this rate persists over the next 100 years, the gold supply would increase by 150%, while Bitcoin would only increase by about 4%.

Global Liquidity, Presidential Elections, and Supercycles

Host David: Do you believe liquidity remains Bitcoin's primary driving force? Lyn Alden (macro analyst) correlated the global M2 money supply growth with Bitcoin's price a few years ago, and the correlation was strong. Would this shake your cycle theory?

Michael Terpin: No, the two are complementary. The global liquidity cycle is primarily driven by presidential elections and related policies; I have written in my book that Satoshi arranged the halving near U.S. election years and placed bear markets around midterm election years—not coincidentally.

Host David: Why do you say it’s not coincidental?

Michael Terpin: Satoshi didn’t state this explicitly in the whitepaper, but the fact is he aligned 2012, 2016, 2020, 2024, and soon 2028 with U.S. elections. In fact, he couldn't control this precisely because the cycle isn’t fixed at four years, but rather at 210,000 blocks, targeted at ten minutes per block, which rounds to about four years. The difficulty adjustment algorithm allows for miners to find blocks more easily or barely adjust based on block creation speed; if blocks are found quickly, the difficulty increases; if slowly, it decreases. This is the source of this mechanism that provides additional security to the network; I have an entire chapter dedicated to mining economics in my book.

Host Bonnie: So the four-year cycle is based on American elections, meaning Satoshi was designed around the U.S.?

Michael Terpin: I believe so, because the U.S. remains the most powerful economy globally, influencing the world. Whether Satoshi was an individual or a team, their understanding of the economy was extremely precise, predicting that this arrangement could function stably for centuries. Once it surpasses the initial 5, 6, or 7 cycles, it enters the supercycle effect discussed in my book. Even though we're only in the fifth cycle, 96% of Bitcoin's issuance is complete. The first cycle was the most profitable, when you could mine coins for under a cent, though before 2010 they couldn't be sold at all. Hal Finney (the recipient of the first Bitcoin transaction and the first miner besides Satoshi) famously stated, “This will either go to zero or rise to 10 million dollars each.”

Host Bonnie: Do you believe Hal Finney is Satoshi?

Michael Terpin: He has indeed been one of the candidates under suspicion. This remains a mystery, with around 20 candidates having reasonable suspicion, yet none confirmed. The latest round of speculation points to Adam Back (the inventor of Hashcash and CEO of Blockstream), but he has denied it. Many oppose this assertion, mainly due to his British spelling habits, and the posting timestamps which suggest a location in Canada. So we are still in a stage of speculation.

Fiat Currency Depreciation, Erosion of Trust, and the Commodity Supercycle

Host David: Over the past decade of Bitcoin's rise, how much of it has been driven by fiat currency depreciation and sovereign debt accumulation?

Michael Terpin: A large proportion. The biggest creator of liquidity is printing money; when the U.S. prints, often other regions may print even more, eroding trust in the fiat currency system. I discussed the three cycles of the commodity supercycle over the past 100 years in my book. The first supercycle, in the 1970s, involved two narrative shifts occurring simultaneously: Nixon's cancellation of the gold standard and Americans regaining the right to legally hold gold. One opened up a new reason for buying gold, while the other introduced a new group of gold buyers, ultimately leading to a fourfold rise in gold prices during the 1970s. The second supercycle happened in the '90s, driven by Chinese hyper-industrialization of materials like copper and nickel.

In my book, I referred to a report by CME (Chicago Mercantile Exchange) from 2023, suggesting we might be starting a new supercycle due to money printing and currency devaluation, but it's still uncertain. By 2025, the answer should be very clear.

Host David: Have you heard of Neil Howe's "Fourth Turning" theory (which predicts a systemic collapse of society every 80 years)? Does Bitcoin’s recent rise reflect the erosion of social trust brought on by the Fourth Turning?

Michael Terpin: This question is interesting. Actually, even before "The Fourth Turning" was published, similar cyclical generational theories existed. The 80-year window is controversial, with dramatic events occurring every 10 years. From my observations, the past 50 years have shown remarkable consistency in technological cycles: at least one major disruptive technology has emerged each decade, typically starting early in the decade and collapsing in a bubble at the decade's end.

Looking back, the internet took off in 1991 (though DARPA had experimental networks in the 1960s); when I first came across it in 1993, browsing involved getting a browser from Marc Andreessen's dorm. At that time, it was just a university project, culminating in the dot-com bubble at the decade’s end. The 2000s brought about Web 2 and social media, with companies like LinkedIn and MySpace starting from scratch, and by decade’s end, Facebook emerged as a giant unicorn. The 2010s were characterized by Bitcoin, from a few cents in 2010 to nearly 60 thousand dollars by 2020. The current decade is about AI, with OpenAI’s first commercial LLM in 2022 breaking all user growth records. It took Netflix a year to reach a million users, while OpenAI achieved that in five days, now boasting nearly a billion.

AI has been brewing for quite a while, similar to the internet. My brother graduated from MIT’s AI lab, and in the '90s, I thought expert systems and Prolog would propel AI to soar; it didn’t happen then. LLMs and Agents are the real triggers, and these days, AI constitutes a massive portion of S&P 500 growth.

Will AI Investments Steal Funds from Bitcoin?

Host David: AI is the new attractive investment; what is Bitcoin then?

Michael Terpin: There are two points. First, this is a huge pie; indeed, some stock investors have shifted from other sectors to the MAG 7 (the seven largest tech stocks primarily benefiting from AI), with over 80% of budgets from Sand Hill Road (the top venture capital hub in Silicon Valley) going toward AI. However, these movements are internal rotations within their respective asset classes. Gold investors won’t sell gold to invest in AI, and neither will Bitcoin holders. Marginally, some individuals have perhaps switched from a 30% allocation to crypto to 20% crypto + 10% AI, but the money supply continues to grow, so each asset has growth space.

Second, AI tokens have also appreciated significantly even in the bear market, though their total scale remains small. By the end of 2024, the AI token sector had experienced a wave of 100x growth (from October to December), after which a bubble burst. Recently, Venice's VVV token rose about 500%, from 2 dollars to nearly 10 dollars. Bittensor also doubled, though it has not yet reached the previous cycle's height.

My judgment is that in the next three years, leading AI tokens will outperform Bitcoin, and a substantial portion of those gains will flow back into Bitcoin. Additionally, stablecoins represent a new force in the crypto economy, as stablecoin users now have wallets for the first time, dramatically lowering the friction costs of entering Bitcoin and other tokens. I was an early participant in Tether, which was established early 2014 by Brock Pierce and Reeve Collins in Santa Monica and later sold to Bitfinex to operate independently. At the time, everyone envisioned only “transferring funds between exchanges without a three-day wait and earning some interest,” never anticipating it would evolve into a business with 100 employees earning 20 billion dollars yearly from U.S. treasury.

Diminishing Returns of Cycles and the Math of Supercycles

Host David: How will future cycles evolve? Every bull market's rise from bottom to top is diminishing. If this trend continues, the mathematics of growth will eventually approach zero.

Michael Terpin: Yes. This is precisely why supercycles are critical; what we see is "diminished logarithmic returns" and "arithmetic level converging drops." Specifically: the first round (before the halving, possibly not entirely comparable) rose from 1/10 of a cent to 30 dollars, which is 3000x, then dropped 97% to 1 dollar; after the first halving, it rose from 12 dollars to 1200 dollars, a 100x rise, then dropped 85%; the third round saw a 30x increase, dropping 83%. Notice the numbers: 3000, 100, 30—the next logically following number is 10.

I initially expected that during COVID, starting from the halving price of 8700 dollars, it should yield a tenfold rise, but it actually only reached 68K–69K, approximately an 8x increase. I attribute this to macro headwinds; the Biden administration's crackdown on crypto, Operation Choke Point 2.0 (referring to the alleged policy of financial decoupling), and the interest rate hike cycle. I’m surprised it has only been cut by 20%. For this round, considering that the ETF was approved and surged to 73,850 dollars in the month following (almost 9 times), it subsequently rebounded from the 15K low after the FTX collapse.

Based on this sequence, I anticipate this round will yield around threefold gains, depending on macro conditions. Everyone expected that Trump's election would create favorable conditions, but they didn’t realize that while Trump is friendly to crypto, his communication is extremely chaotic. His tweets often ignite market reactions; following the logic of “The Art of Trading,” he tends to throw out extreme demands before returning to midpoint for a sense of victory, which creates shock to media and the market, resulting in the extreme fluctuations around October 10th.

The highs in October correlated precisely with the positions of peaks in previous cycles; there is another viewpoint that anticipated a month or two of continued growth needed significant buying and no black swans. But October 10th was that black swan, with Trump's tweets, disarray in buying and selling, and market makers facing liquidations, creating a perfect storm that led to prices free-falling. During that time, there were also consistent selling and shorting actions in traditional financial markets, possibly some institutions taking quick action upon seeing signals; that initial crash ignited the entire bear market.

Jane Street's Morning Selling Pressure and Wall Street Strategies

Host David: Finally, please comment on the rumors of Jane Street (top quantitative market maker) dumping Bitcoin every morning at 10 AM.

Michael Terpin: This has been widely reported; I don't have direct evidence, but the density of the reports makes it likely that it happened. Moreover, this has now stopped, and after it ceased, prices began to rise. The narrative suggests this: Jane Street systematically sold off Bitcoin half an hour after the U.S. stock market opened, combined with short sellers widely disseminating bearish news. In reality, the price dropped because they themselves were systematically selling; simultaneously, they built short positions to profit from both ends.

Host Bonnie: Is this legal?

Michael Terpin: It is essentially legal. If it were a commodity or security, there would be restrictions, but the definition of Bitcoin itself remains unclear, making the legal boundaries of short-selling actions vague. I'm not a lawyer, but I know that the fines major Wall Street firms pay each year are merely a small portion of their trading income. The schemes played during the whale era can now be fully executed by Wall Street and are continuing.

Host Bonnie: So, the inflow of funds from Bitcoin spot ETFs is the portion retail can see, but doesn’t imply they aren’t simultaneously shorting with derivatives.

Michael Terpin: Correct. The stock market is similar; there are dark pools and OTC desks. The classic profit-making method from the whale era was: large OTC purchases coupled with shorting at small exchanges (arbitrage would automatically pull the market price down) while holding large shorts. For instance, they might build a short at 85K targeting 75K, with their holding capacity sufficient to trigger sell pressure and then buy back at the selling price while profiting from closing shorts.

Host Bonnie: Does this explain why some famous addresses appear to be consistently losing money on-chain, like James Wynn? They should be hedging at exchanges.

Michael Terpin: I can’t affirm that for them. There are indeed many individuals on X openly claiming to "gain a billion and lose a billion," and some live stream their trades on YouTube, but those streams may not reflect their entire trading activities. The greatest advantage of the Bitcoin market is that on-chain data is public, but post-ETF, a significant amount of trades is hidden in internal ledgers on Coinbase and in non-chain derivative markets. Such practices have long existed in the gold market.

Host David: If you were to rewrite your book today, how would you modify it?

Michael Terpin: I would write more details about the potential end of this cycle, which I had previously simplified into the “neutral macro conditions leading to a rise to about 193K.” I would also add a few formulas, such as the 35-month rule, but at the time I didn't want to make the book too technical.

Host David: I recommend everyone check out Michael's "Bitcoin Supercycle."

Michael Terpin: Also, include your channel; thank you.

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