According to Capriole founder, the Bitcoin cycle you knew is dead.

Capriole founder Charles Edwards argues that Bitcoin’s famous four-year boom-and-bust pattern has effectively ended—not because markets have matured into a placid equilibrium, but because the engine that once forced 80–90% drawdowns has been dismantled by Bitcoin’s own monetary design.

The Bitcoin cycle of four years is dead

This is his update #66 newsletter Edwards, in a paper published August 15th 2025, writes that Bitcoin’s annual growth rate has dropped to 0.8% since April 2024, when the supply was halved. “less than half of Gold’s 1.5–3%,” Addition of this Shift “made Bitcoin the hardest asset known to man, with look-ahead certainty.” Miners’ supply of new-issued bonds is now only a rounded error in comparison to the aggregate demand. Dramatic, miner driven busts from prior cycles seem like relics of a bygone era. “In short – the primary driving force behind Bitcoin cycle 80-90% drawdowns historically is dead.”

Edwards acknowledges the existence of cycles. Edwards reframes the causes. Investor reflexivity, macro-liquidity, extreme valuations on the chain, and the derivatives market are all discussed. “euphoria” Even so, these factors can combine to cause significant losses. If the half-year calendar is no longer the inflection point, then investors will need to recalibrate both the signals that they watch and the timeframes they anticipate risk to materialize.

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In terms of reflexivity, he warns that believing in a script lasting four years can be a factor for price. When “enough Bitcoiners believe in the 4 year cycle… they will structure their investing activities around it,” He cites George Soros’s idea that narratives in the market feed into fundamentals. The self-fulfilling nature of the market narrative can trigger. “sizeable drawdowns,” The price of coal will remain high even though miners won’t be the ones setting it.

Edwards’ framework is based on macro-liquidity. He is a “Net Liquidity” gauge—the year-over-year growth in global broad money minus the cost of debt (proxied by US 10-year Treasury yields)—to distinguish genuinely expansive regimes from nominal money growth that is offset by higher rates.

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 in a he wrote, but “All of Bitcoin’s major bull runs have occurred in positive Net Liquidity environments.” By mid-August he describes conditions as positive: “We are currently in a positive liquidity environment and the Fed is now forecast to cut rates 3 times in the remainder of 2025.”

The On-Chain data is still supportive

The froth is the liquidity. Edwards points to established on-chain gauges—MVRV, NVT, Energy Value—that have historically flashed red at cycle peaks. He says that these indicators are still not available: “In 2025 we still see no signs of onchain Euphoria. Bitcoin today is appreciating in a steady, relatively sustainable way versus historic cycles.”

Chart of MVRV Z-Score “shows we are nowhere near the price euphoria of historic Bitcoin tops.” By contrast, his derivatives composite—the “Heater,” which aggregates positioning and leverage across perps, futures, and options—has been hot enough to warrant short-term caution. “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 interest—conditions more consistent with a major top.

One metric, however, eclipses the rest in 2025–26: institutional absorption of new supply. “Today, 150+ public companies Edwards states that ETFs buy over 500% the Bitcoin daily supply from mining. “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.” The current extended period with high multiples of this measure, he says, is a symptom. “good news for Bitcoin,” Despite the fact that it is obvious, no one knows for sure how long conditions like these will persist.

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Edwards describes how demand for institutional goods can change from one of supply to the other. “treasury company early warning system.” The team’s four main watch items “24/7 for cycle risk management and positioning purposes”If falling, the Treasury Buy/Sell Ratio will be lowered. “suggests growing selling by the 150+ companies”A Treasury CVD that flattens or turns into a “red zone” It is a good idea to use a bilingual translator “risk off”The percentage of Coinbase Volume that is Net Buying; and the Treasury Company Seller Count, which historically has preceded spikes in pressure.

Balance-sheet fragility is layered on top. The greater the leverage taken by treasuries to collect Bitcoin, then more a deleveraging can be forced. “Total Debt relative to Enterprise value are key to track,” Capriole, he adds, will soon publish another tranche of Treasury-Risk metrics “next week.”

Quantum Computers Vs. Bitcoin

Edwards goes on to make an argument that will be uncomfortable for many Bitcoin traders. quantum computing Bitcoin has the highest long-term risk and also offers an excellent return. Capriole expects “the asset class will outperform Bitcoin by circa 50% p.a. over the next 5–10 years,” Citing today’s low market capitalizations as a “$2T+” addressable market.

In the same way, “in the long-term (without change) QC is existential to Bitcoin,” With a worst case window of “3–6 years” He notes that China has broken the encryption used to secure wallets and transaction. China is a major concern for him. “is spending 5X more on QC than the US” Recent news “presented a QC machine a million times more powerful than Google’s,” Arguments that speed of progress is important. “with… innovations occurring every quarter,” You can also see “this technology will mature sooner than many think. Just like ChatGPT.”

It is migration that poses the biggest operational problem, even though the threat isn’t imminent. Edwards sketches some constraints that are not immediately apparent: about 25 million Bitcoin address hold over $100. “a good day,” The network processes about 10 transactions per seconds. If everyone tried to rotate to quantum-resistant keys at once—and many would prudently send test transactions—it would take “3–6 months” Just to get the transaction through is enough to take the time, even before achieving consensus and deploying a preferred upgrade. “Optimistically we are looking at a 12 month lead time to move the Bitcoin network to a Quantum proof system,” He writes. Jameson Lopp is highlighted as a good starting point, and the author urges everyone to get involved. “encourage action on the QC Bitcoin Improvement Proposals (BIPS).” Capriole holds exposure to quantum computing, both in terms of return potential as well as for the technology itself. “a portfolio hedge should a worst case scenario eventuate.”

It is a conclusion that he has reached without becoming complacent. Bitcoin miner driven cycle It is almost dead. If demand from institutions holds. “there is a strong chance of a right translated cycle,” The following are some examples of how to use “a significant period of price expansion still ahead of us.” Vigilance, however, is vital.

According to him, the two factors that should be prioritized in this half-epoch are “Net Liquidity and Institutional Buying,” When you are unsure, ask someone. “biggest risk to this cycle” The Bitcoin Treasury Companies, whose choices on their balance sheets can have both positive and negative effects, are paradoxically what has driven it. The importance of quantum computing is stressed by him. “isn’t a risk to Bitcoin this Halving cycle,” Absent action “it certainly will be in the next one.” The prescription is not to fear cycles, but to retire the outdated ones and prepare—technically and operationally—for the cycles that remain.

BTC is currently trading for $119.121.

Featured image was created using DALL.E chart by TradingView.com