Is the 2025 Bitcoin Crash Starting?

The total amount of money invested in Bitcoin ETFs has just crossed above $100 billion as major U.S. asset managers are going on a buying spree. Of course, as that's been happening, Bitcoin's price has surged above its previous all-time high and briefly going parabolic. Over the last few weeks, we've seen this uptrend slow down a little bit, but Bitcoin remains in a fiercely strong uptrend. This is, of course, nothing new for Bitcoin. Rewind to February of 2017, Bitcoin crosses its previous all-time high at $1,000 and then proceeds to go parabolic, going up by 200% over the next 100 days. Again, December of 2020, a new all-time high is made on Bitcoin as it breaks above $19,000, and Bitcoin yet again goes parabolic, yielding a 200% return over the next 100 days. Today, Bitcoin has broken above its previous all-time high of $70,000, and it has already made a 40% move up within less than 50 days. If Bitcoin were to make a 200% move higher within 100 days, that would make Bitcoin's chart look a little bit like this. So, it is a good moment to be asking whether this is what's in front of us. Now, as a disclaimer, we do currently have active trades on cryptocurrencies that we take our members through on our website. We are proud to say that we've stayed exposed to cryptocurrencies since August of 2024. We've now just closed all of the long crypto positions that we had on the website, and we've actually shifted to a net short position for near-term pullback on Bitcoin. We'll get into that later in this video. If you want to follow our exact moves when it comes to crypto, make sure that you have a subscription to our website. When we take a look at a log-scale version of Bitcoin, we see a clear pattern. Price goes parabolic, giving absolutely extraordinary returns that feel unsustainable, and that's simply because they are. The Bitcoin bubble then pops, price declines aggressively, retracing a big portion of the rally, then Bitcoin begins to stabilize, price then begins to base for an extended period of time, eventually momentum picks back up again, and price starts to go parabolic. I think most people are very aware of this cycle that's repeating over and over, and currently it's safe to say that we are in the parabolic stage where Bitcoin is accelerating higher at new all-time highs. The million-dollar question, however, is when and where this parabolic move in Bitcoin will end. Well, Bitcoin's rally today is being fueled by two key fundamental factors. Firstly, the new US administration has, of course, a lot more favorable stance on cryptocurrencies, which can lead to a faster adoption of this technology. And that leads us to the second fundamental factor, which is the acceleration of Wall Street's adoption of Bitcoin. That is ultimately what is driving the price higher. For example, a recent report from BlackRock, the world's largest asset manager, recommends a capital allocation of about 2% to Bitcoin. The total value of assets worldwide today stands at about $900 trillion, compromising of real estate, bonds, stocks, and a few other major asset classes like art and gold. Gold represents about 2% of the total value of global assets, standing at a market capitalization of $18 trillion as of today. Bitcoin's current market cap, on the other hand, stands at about $1.4 trillion, less than 10 times the size of gold's market cap. If the world were to adopt Bitcoin like BlackRock recommends with a 2% allocation, that would make Bitcoin's market cap grow by a factor of 10. And an $18 trillion market cap for Bitcoin would roughly equal to a Bitcoin price of about $1.3 million. So yes, there is a real bullish case behind the adoption of Bitcoin as a financial asset. But that doesn't really help us understand if Bitcoin is going to be moving higher in the short term, or whether we should be expecting a pullback right now. By the way, if you're looking to trade crypto, make sure to check out Bybit by clicking on the link in the description down below. They probably have the best trading platform in the industry, and it's the one that we recommend to our clients. We also have an affiliate partnership with them, so by trading on their platform, you're also indirectly sponsoring our work. To know what we can expect from Bitcoin today, we can look at what happened to the price of gold when the first ETFs were launched. The gold ETF, GLD, was launched in November of 2004. From that point on, Wall Street institutional money could finally allocate a portion of their capital to gold without necessarily needing to buy the physical metal. Of course, we can see what happened looking forward for gold. This marked the beginning of a major move up in this asset class, with gold prices moving up by 300% over the 6 years that followed. What's also interesting is that gold's market cap was about $2 trillion when this ETF was launched in 2004, around the same size of Bitcoin's market cap today. So if Bitcoin experiences something similar to what gold experienced here, which could mean that Bitcoin's bull market can last multiple years with many healthy pullbacks along the way up, just like we saw with gold following the launch of its first ETF. This is partly the reason why we think Bitcoin could be on the edge of pulling back a little bit here. Today, Bitcoin ETFs own a total of 1.15 million Bitcoin, and over the last couple of months, that number has been steadily rising by around 3,000 Bitcoin per day, as we've had an acceleration of money flowing into these ETFs. So if the number of Bitcoin being bought by these ETFs continues rising at the same pace as they've done over the last couple of months, it could be that Bitcoin makes another 50% move up over the next 50 days. That is the good news for Bitcoin. The bad news, however, is that a near slowdown in the number of Bitcoin being bought by these ETFs could actually lead to a decline in Bitcoin's price. We saw that between March and August of this year, ETFs were still buying Bitcoin, but when we look at Bitcoin's price following March of 2024, it actually declined by about 30%. March of 2024 was a great moment to actually be selling Bitcoin, even though ETFs were accumulating them at a rapid pace. If you were a member on our service back in March, you'll know that we closed all of our crypto positions right here. So why have we done this again in December of 2024? If we look at a short-term chart of Bitcoin, we see that it's been forming something called a head and shoulder pattern. This is a pattern that we often use to make trades on our website, and it could be suggesting that Bitcoin is currently printing a local top. In fact, if we add an index that tracks the US stock market on top of Bitcoin, we see that stocks have been in correction mode recently, while Bitcoin has actually stayed quite resilient. This is the opposite setup to the one that we were highlighting back in September of 2024, when the US stock market was making new all-time highs while Bitcoin was struggling. Eventually, Bitcoin caught up to the stock market. We think today it's possible that Bitcoin actually catches down to US stocks for a brief correction. If it does, we'd be looking to buy the dip at around $80,000 for the next leg up on Bitcoin's bull run. Just like with all of our trades, we have a clear risk management strategy. If price shows evidence of moving higher, we may very well change our mind on the potential for a short-term correction. That is the only way to trade crypto, is to have a flexible and open mind. That is why the trades that we've had on cryptocurrencies this year in some cases have yielded extraordinary profits, but the losses in general remain quite small. If you're not yet a member with us at Bravo's Research, make sure to subscribe to our website today.