Bitcoin: The Last Rally Is Loading

Summary I remain bullish on Bitcoin, maintaining a Buy rating with a cycle price target of $175,000 and a bull case of $300,000 before 2026. We are in the euphoria stage, evidenced by rampant crypto IPOs, mergers, and proliferation of treasury companies. Despite signs of exuberance, macro conditions and strong demand from treasury companies suggest another major rally is likely before a cycle-ending bear market. Bitcoin ( BTC-USD ) has outperformed nearly everything since 2023 when I published the article about why I was buying the tulips with both hands . The comments at the time showed a good amount of skepticism and mockery. Fortunately, cogent investment analysis and subsequent outperformance is based on objective facts and logical synthesis about how the world in fact works, not on preconceived biases about how the world ought to work. I’ve been publicly bullish on BTC for 2 years now and despite being over 100% invested (over 100% because I had borrowed money to buy more) in BTC and MSTR for well over a year, I feel little satisfaction that I have been correct because much of my family and friends unfortunately did not heed my many admonitions to come with me on this Bitcoin journey. A few are now coming back and expressing their regret for not being earlier. Most concerning is that some are now expressing their exuberant enthusiasm for starting right now. To me, this is a telltale sign that the end of this cycle is finally beginning. This missive is an update on Bitcoin and my thoughts on where we are in the cycle. I believe we have fully entered the euphoria stage and I expect a serious downturn from much higher levels to start within 9 months. I am still recommending a Buy because I believe there remains significant upside even right now, however I will focus the analysis on the sensitive time horizon that I have just detailed. Signs of Euphoria The biggest signs of euphoria have been the number of IPOs within the crypto space and the proliferation of unprofitable businesses raising money to become crypto treasury companies. IPOs tend to happen in the latter stages of a cycle because companies can raise capital at better terms when the sentiment is bullish and risk-on. People buy rather indiscriminately because they think stuff will just keep going up. The Circle ( CRCL ) IPO was a very big deal because it came quite close to the GENIUS act and benefited from the positive sentiment around stablecoin clarity. If we just glanced at the numbers with some level of objectivity, we can see that the valuation has been buoyed by some incredibly optimistic expectations. This is what I had to say about CRCL in a tweet back in June: USDC has a $62B market cap. CRCL has $39B. CRCL’s revenue is the interest on the T bills which back the supply of USDC. More precisely, it is HALF the interest, because Coinbase actually gets 50% of USDC revenue. If USDC makes 5% on $62B in T bills, Circle gets $1.5B in revenue. So the company is trading at over 25X sales… The PMF is bad. And if it isn’t bad, then it will definitely be unprofitable, which is just bad in another way. Why? Internationally, there is high demand for dollars. But this market is serviced by $USDT. The only markets for $USDC are USA and Europe (and Europe is only because of Tether not wanting to do the MiCA stuff). But these places have good banking systems. People can use PayPal, Venmo, Revolut, CashApp, SEPA, Zelle, FedNow, etc. There’s actually no need or desire for onchain dollars. The only way to make stablecoins attractive in these areas is to do what Coinbase is currently doing: offer some yield for holding USDC. Currently Coinbase offers 4.1%. That’s basically the full yield from T bills. By now you can likely see the problem. USDC cannot compete in markets where it is needed, because USDT dominates. And it can ONLY compete in markets where it is NOT needed (USA and Europe) by giving away all its earned interest, thus rendering the business unprofitable. This kind of stretched valuation is caused by euphoria. But CRCL isn’t the only crypto IPO. Strategy ( MSTR ) has been doing some big ones all year on 4 different preferred offerings. Here is a picture from Strategy showing the biggest IPOs in 2025. Two of Strategy’s preferred offerings are in the top 10. IPOs in 2025 (Strategy) I remain really bullish on Strategy and its preferred offerings, and I think it is the most misunderstood story in all of corporate finance. However, the fact that their IPOs are so successful and these credit instruments don’t have official credit ratings means that much of the enthusiasm probably comes from retail that buys anything in traditional finance with a strong crypto tilt. Every crypto cycle has had its own cycle’s narrative. In 2021 it was all about NFTs and DeFi. Back in 2017 it was all about ICOs. In 2024 there was a brief craze about tokenized AI agents and a brief craze about memecoins. But in reality, the biggest narrative during this cycle has been the institutionalization of crypto. Crypto has gone mainstream and traditional institutions are now becoming involved. MSTR being the best performing stock compared to any company in the S&P 500 is an incredible story. BlackRock flipping the script and pushing for Bitcoin and Ethereum spot ETFs is an incredible story. The President and First Lady of the United States launching their own memecoins is an incredible story. Anything that resembles crypto becoming mainstream and getting adopted within a context that would have been very unexpected back in 2021 is precisely “the item” this time around. That is where the euphoria coalesces and where we see a huge amount of capital coming into it. This brings me to treasury companies. I wrote a piece in mid-2024 about why treasury companies are the most impactful development in Bitcoin this cycle. Back then there weren’t a lot of Bitcoin treasury companies. In fact, there were only MicroStrategy (back then it had not changed to “Strategy” yet), Semler Scientific, and Metaplanet. A fun fact is that Metaplanet went on to be the number 1 performing stock in the entire world in 2024 . These companies explicitly tapped capital markets to increase BTC per share. Later that year, a bunch of other companies announced that they would be doing the Bitcoin acquisition strategy that MSTR had pioneered. They obviously wanted to mimic the outperformance of MSTR and Metaplanet. Fast forward to today, August 2025, and companies from several international markets are announcing their plans to raise capital to purchase BTC. Here’s a short list of them: H100 in Sweden The Smarter Web Company in UK The Blockchain Group in France K33 in Hong Kong In the US, we’ve had GameStop ( GME ) and Trump Media ( DJT ) raise capital to buy BTC in 2025. The success of the Bitcoin treasury strategy as a marketing tool and value creation engine has captured the minds of many in the crypto sector. The result has been treasury companies on various other crypto tokens like Ether ( ETH-USD ) and Solana ( SOL-USD ). Most are backed by a ton of hype. A big influencer is often the face of the company. The company raises a few hundred million to a few billion dollars. And we tend to see the stock rocket higher. It’s outside the scope of this article to get into the economic merits of crypto treasury companies using non-BTC cryptos. I will simply say the following about the current rise of hype-focused, otherwise unprofitable crypto treasury companies: this is a telltale sign of the euphoria stage. In any euphoric stage, the tremendous buildup going into it has a lot of sidelined people thinking that they ought to jump in. The early investors of the cycle, who are often considered “smart money,” are looking for exit liquidity. The use of IPOs, mergers, acquisitions, and the promises of a “new paradigm” where “this time things are different” are all actions partly done for the purpose of generating this exit liquidity. Crypto treasury companies going public via SPAC or mergers are becoming more common in 2025. PIPE (private investment in public equity) investors are able to cash out after the public announcement of some treasury strategy. On top of that, even investors who buy in days after the announcement have tended to enjoy gains thanks to the positive sentiment. This level of excitation simply cannot be sustained because markets are ultimately made up of people. The social mood can be energetic for a while, but it eventually turns on itself as the people themselves get exhausted. The current environment is one where a new Treasury company can be announced each week. Influencers soon announce that they have joined the board or are otherwise involved as some kind of Bitcoin affiliate, champion, or director for the company. The stock rallies hard. All of this takes an enormous amount of energy for people to keep up with, which is precisely why the market regime never lasts long. To summarize, I’m not saying that IPOs or treasury companies will cause a bear market via fraud or being forced to liquidate a huge amount of BTC. I am saying that their widespread proliferation is a sign of approximately where we are in the cycle. Another Rally I believe we will see another powerful rally in BTC before it begins the cycle-ending bear market. I believe this for a few reasons: Macro looks good. 2025 has been a strange year where the tariffs made it a very bearish market and then their resolution made it a very bullish one. There are no major issues in inflation, jobs, or any other macro-level data. The Fed is holding rates steady, and this isn’t a big deal. A Fed chair that President Trump appoints will likely be more encouraging for a risk-on market since the President is so insistent on cutting rates. As long as macro stays dovish, there should not be issues for BTC. Next, crypto treasuries aren’t slowing down. This is ultimately still the biggest driver of demand. We’ve seen confirmed sales of up to 80,000 BTC absorbed by the market with negligible issues. This demonstrates enormous demand for BTC. Unlike what many naysayers are claiming, much of the Treasury companies are buying using equity raises. There is no “over-leverage” in the system and therefore not yet a buildup for a potential margin call cascade. Even the debt that is raised exists in the form of non-callable, long-term debt in the form of corporate bonds. Margin calls are therefore not a risk of Bitcoin treasury companies being forced to exacerbate the sell pressure in a BTC bear market. This brings me to the next point. Previous cycle tops have had strong indications of over-leverage in the derivatives markets. We do not see a very high basis in the futures market, nor do we see high funding rates in the perpetuals market (which would indicate leveraged long traders paying a premium for the leveraged exposure). BTC CME Basis (Velo) BTC funding rate (Velo) Here are the options data on BTC options traded on Deribit. IV Skew – BTC (Velo) Upside leverage in this case would look like calls IV being much higher than puts IV, indicating greater non-dealer demand for upside convexity. On this graph, the line would be well below the 0% horizontal axis. The current situation looks very neutral, indicating the leverage is yet to come. Here’s another reason I think we’re only in the early euphoria stage. Google Trends is a great indicator of general sentiment. The current search results are well off the prior cycle’s peak and even at a lower point compared to where we have already been during this cycle. That brief uptick around November 2024 coincided with BTC breaking $100,000 and the election of the incredibly crypto-friendly President Trump. Google Trends (Google) It is true that many people are now using AI to search for stuff. This might skew the results between the last cycle and this cycle. However, I think that the clear uptick in November 2024, about 2 years after the release of ChatGPT, is a clear indication that Google Trends can still be a good sentiment meter. We are not at peak interest, and therefore not at peak euphoria. Risk The biggest risk for my Buy recommendation is the macro. Tariffs could come out very heavy-handed and spook investors, as they did in March and April 2025. Besides tariffs, I think it would be something very unexpected in macro, such as when the yen carried trade unwound last year. Conclusion I still rate BTC a Buy. My price target set for this cycle, back when it was under $55,000 and when I was still buying it hand-over-fist , was $175,000 before 2026. I believe this is still very possible and that things will heat up by the end of summer and continue into the year-end. As I laid out in that February 2024 article, I will start to hedge after $150,000. Please read the article to learn why I favor hedging over selling. My only change to this prognostication is that I would not be surprised at all if we go well over $250,000. Bitcoin’s price action thus far has been very balanced, almost like any other macro asset like gold or the S&P 500. This is not how I would expect an absolutely scarce asset to behave when thinking from first principles. If supply is not a lever to adjust to demand, then everything must be absorbed by price alone. This dynamic, combined with options market reflexivity, which I covered in depth in this article , tells me that when the upward move truly comes, it should be quite violent and shocking. In that sense, I would keep the $175,000 prediction I made in February 2024 as my cycle base case, but add that $300,000 in a bull case.

Source: Seeking Alpha