Transcription
The four-year cycle is dead. And it's not just me who's saying that. Ralph Powell agrees.
"Remember, we've always said it's the business cycle, stupid. It is always the business cycle, stupid. And all of these people who claim it's the four-year cycle based around this and that, they don't understand the fundamental of what the business cycle is, why there's a four-year cycle, and everything. And we've explained it, and we'll go through it in great detail tomorrow."
If you believe in the four-year cycle, you probably think we're heading into a bare market right now. The halving happened. The ETFs launched. Micro Strategy bought billions. Every signal flashed green. But Bitcoin seemed stuck, underperforming even traditionally safer assets. The four-year cycle was never real. Ral Pal just revealed what's actually been moving Bitcoin this whole time. And it has nothing to do with the halving, nothing to do with any indicator we've relied on for years. There's one lever only the government controls. In 2021, they quietly changed it. One decision, and it triggered the biggest bull run Bitcoin has ever seen. This is why Bitcoin hasn't exploded yet. Why everyone calling for a 2025 top is wrong. The data says 2026. Today, I'm walking you through Ral's thesis and the exact timeline for what's coming.
All right, let's break down what Ral just said. The ISM manufacturing index. Most people have never heard of it, but it's the single most important indicator for understanding Bitcoin cycles. The ISM measures the US business cycle, tracking economic expansion and contraction. Bitcoin doesn't follow the halving. It follows this. Let's look at the data. Every major Bitcoin top has aligned with the peak in the ISM. 2013, 2017, 2021. All of them. The halving gets the credit, but the ISM has been driving the entire move. Even in 2021, Bitcoin peaked at the same time the NASDAQ tech index did. Do you think Bitcoin's halving pattern is more important than the biggest tech index in the world? Equities are clearly more important than the four-year cycle. Correlation doesn't equal causation. The scary part is the ISM hasn't reached its parabolic phase yet. The same phase that caused massive Bitcoin peaks in the last two cycles. The four-year cycle was never just about Bitcoin. It was about the business cycle recycling every four years. The halving just happened to line up. But here's where it gets interesting. That pattern just broke.
"In 2021-22, that actually extended the maturity of the debt from four years to five years. So that extension of the maturity of debt has pushed out the business cycle a year. The four-year cycle this time around is a five-year cycle. We don't know what the next one will be until we see where they all get end up getting refinanced. Whether it comes back to four, 'cause they managed to get some stuff at the long end, or whether they shorten it, 'cause everything's in the short end. We don't know yet. But this one is a five-year cycle."
Ral just mentioned rates and the debt rollover. Let me explain why this matters. The US government has to refinance trillions in debt every year. When rates are high, the cost of servicing that debt explodes. So, the Fed has no choice. Rates have to come down. Not because they want to, because otherwise the entire system collapses. But here's the problem. High interest rates make traditional assets more competitive versus Bitcoin. I mean, why buy a volatile asset when you can get 5% risk-free in a savings account? This is what RAL means by main street earnings versus scarce assets. When rates are high, money flows into safe yields, not Bitcoin. When rates drop, that flips. Cash loses value, bonds become unattractive, and liquidity floods into scarce assets. That's when Bitcoin really moves. Just look at the data. Bitcoin tracks global M2 money supply almost perfectly over time. When liquidity expands, Bitcoin rises. When it contracts, Bitcoin consolidates or drops. Right now, we're in a transition. Rates are still elevated. Liquidity hasn't fully returned. But when it does, and the ISM enters its expansionary phase, Bitcoin will catch up fast. This is what drives everything.
"5.4 year sine curve. 5.4 year is the exact average weighted maturity of the debt. And it tells us the ISM should peak by 2026. We think liquidity probably peaks before that. Um, as the rate of change of ISM changes and the rate of change of liquidity changes, our best guess remains well into 2026, probably Q2."
What Ral just said changes everything. Let me show you exactly what this means. In 2021, the US Treasury quietly extended the average maturity of government debt from 4 years to 5.4 years. One policy decision, and it stretched the entire business cycle by over a year. This is why the four-year cycle Bitcoin is dead. It's not that Bitcoin changed, it's the underlying driver, the business cycle, got extended. Ral mapped this out using a 5.4-year sine wave, and it lines up perfectly with the ISM's current trajectory. The ISM should peak in 2026, not 2025, 2026, which it has for every single cycle. That means the top isn't coming when everyone expects it. This explains everything. Why Bitcoin's high didn't feel euphoric like previous cycles. Why the rally feels more stretched out than ever. Why we're seeing a slower grind compared to the explosive move of cycles past. The reality is the cycle just got longer. The 2013 cycle ran about 2 years. The 2017 cycle stretched to 3.5 years. The 2021 cycle almost 4 years. And now we're in a 5-year cycle. Even though the cycles are stretching, Bitcoin is still trending along the same logarithmic regression bands that it's been following since 2011. We're not in uncharted territory, just a longer version of the same pattern. And the multipliers are still playing out. The 2013 cycle ran 20x from bottom to top. The 2017 cycle did about a 7x. This cycle, 3 to 5x from the bare market lows. This puts Bitcoin somewhere between $180K and $300K at the peak.
But here's what's different this time. Institutional adoption, sovereign adoption. Micro Strategy owned 650,000 Bitcoin. El Salvador made it legal tender. Companies are adding it to their treasury. JP Morgan and Vanguard are now supporting. This isn't retail speculation. This is real capital allocation. And when liquidity starts expanding, when the ISM enters its expansion phase, when rates come down and M2 starts climbing aggressively, all of that institutional demand is going to collide with Bitcoin's fixed supply. That's the setup for 2026.
Now, let's zoom out even further. The dollar has lost 98% of its purchasing power since 1913. And that trend isn't slowing down. It's actually accelerating. Look at the last five years alone. M2 money supply exploded by over 40%. That's the largest monetary expansion in modern history, and it's showing no signs of stopping. Governments can't stop printing. They're trapped. The debt can't be paid back, and it can only be rolled over. And every time they roll it, they need lower rates and more liquidity.
If you want to stay updated on how this plays out, make sure you're subscribed to the channel and turn on notifications. I'm constantly tracking ISM, liquidity, business cycle, risk assets, rate cuts, and Bitcoin's positioning, and price action throughout the entire cycle. I'll make sure to keep you updated with what happens. Next year could well and truly be the year that the four-year cycle is deemed dead. It's going to catch a lot of people off guard, and it's going to shape the way people think about Bitcoin forever. I'll see you in the next one. Peace out.