Transcription
This video will clearly be the most important for you if you don't want to mess up everything that will follow in the coming weeks. The level of this video will be a bit more challenging than usual, but it is important that you can understand all the mechanisms. I will do my best to simplify it as much as possible so that you can understand what is happening behind the scenes and what will follow in the months of November, December, and possibly at least through Q1 2026. So the main question is linked to the 4-year cycle, to everything we've known about crypto for a while, and to market liquidity.
So, what we've known from the beginning are 4-year cycles, 3 years of growth, 1 year of decline for Bitcoin and altcoins. And if we follow this pre-established pattern, we should have a market top occurring by the end of this year, 2025. Now, pay attention to one thing: this cycle follows the US debt cycle. That is to say, America has a public debt. It has a public debt, it refinances itself, it has expenses, and this public debt is rolled over through time thanks to mechanisms of treasury bond buybacks, treasury bond sales, monetary policy easing, and so on and so forth.
And what happened in 2021, which people are not realizing at the moment, is that we had a shift in the US debt cycle. We had a shift because something happened that was not at all predicted, that was not at all anticipated by the market, and that was Covid. Covid led to massive buybacks of treasury bonds, bonds, etc. This pushed the debt wall back to 2025-2026. Here, you have the debt wall that needs to be repaid in the coming years, and you see that at the end of 2025 and also in 2026, there are exorbitant amounts that need to be repaid. And when you say exorbitant amounts that need to be repaid, it means the states are not foolish. They will continue to do what they are currently doing, which is to lower the value of the dollar to have several financing and refinancing mechanisms.
The two main mechanisms are: first, reducing the debt by devaluing the currency in which it is denominated. This is the first point, which is the easiest to understand. But also by influencing short-term bonds, what we call T-bills, which are very sensitive to interest rate hikes or cuts compared to longer-term rates, like 10-year, 20-year, 30-year bonds. And this is the double plan that is currently being implemented by the Fed and the US government. And these elements will shift the liquidity cycle to 2026.
This is a chart that circulates a lot, which a French-speaking YouTuber shows a lot on YouTube, and it is supposed to reach a peak precisely at the end of 2025. But what is happening is that this chart dates from before Covid and has not been adjusted with this shift in the liquidity cycle, which, remember, is linked to the debt cycle. And so, if we were to redraw this curve, we would have a peak in 2026. This chart was initially created by an investment fund called Crossborder Capital, and they have updated this chart, which includes future projections regarding the liquidity that will enter the market if we focus solely on the United States.
What is important to understand is that, according to this liquidity cycle, we are not currently in a bull run. We were in a bull run in 2020-2021 with a massive influx of liquidity into the market, and since then, we have been decreasing liquidity levels. This decrease was achieved by draining these liquidities because there was too much in the market. We don't need to mention the interest rate hikes. We don't need to mention the enormous quantitative tightening (QT) procedure that we've been experiencing with the Fed for a while.
And what is happening is that with the various maturities arriving by the end of 2025, early 2026, the Fed will have no choice but to restart the machine. And this restarting of the machine has already begun since last September. And Crossborder Capital is making projections that we are currently in negative territory in terms of liquidity injected into the market and that we will return to positive territory from that point onwards. And that point is precisely now, where we have a new peak that should arrive at least in Q2 2026.
Of course, the chart is a projection. Currently, we see that we have not reached a peak and that we are descending. So we need to see if this peak will be extremely large, if it will only last until Q2 2026, or if it will take us all the way to Q4 2026. A date that, for now, no one foresees as the end of the bull run.
What is also important to understand is that we need to look beyond the US to appreciate what is happening globally. Here, you have a graph that represents the liquidity created globally, represented by these orange and green hatched areas behind the blue and red lines. And you have the blue and red lines, where the blue line indicates the number of central banks in the world cutting rates versus the number of central banks in the world, indicated by the red line, raising interest rates.
And what we can see is that there is a very strong proportion, a majority of central banks, that are indeed cutting rates. Currently, 85.33% of central banks are cutting rates. So the majority of central banks, including the largest ones in the world, have an outlook that is rather positive for the financial market. That is to say, they have been easing their monetary policy for a while. In fact, if we look at the crossover, it's been since August 2024. And what is felt once a peak is reached is precisely the arrival of a bull run. You can see here the peaks we reached in 2020. Here, you can particularly appreciate it thanks to the last bull run; when we reached a peak, liquidity arrived massively in the market. And this is normal because, as you know, there is always a delay between an interest rate cut, the liquidity creation that follows, and the injection of that liquidity into financial markets. So it's normal to first have a majority of central banks cutting rates with an increase in liquidity being felt, and then liquidity arriving in the market.
We also see this point with this graph, which is slightly different and shows not the rate hikes or cuts by central banks, but rather the actual manufacturing cycle we are experiencing, also known as the bull run in relation to central bank rate codes. And what is super interesting is that we can see that we have just turned positive again, with an index pointing to 0.48. We can see that since entering the bear market and its end in December 2022, we have been climbing, meaning adding a little liquidity that was drained. This explains why altcoins have not yet outperformed; it's because we are just adding back to the market what we removed, but we haven't added real liquidity compared to 2021, 2022, 2023, and so on. I think you understand the mechanism.
What is super interesting is that if we compare each time over the past years when we returned to positive territory according to this manufacturing cycle, and especially a return to positive territory with an index at 0.48 points, we had a truly astonishing start for Bitcoin and altcoins. Here, we are looking at Bitcoin, and you can see that I have highlighted on the graph the moments when the manufacturing index turned positive again, and especially when it crossed above 0.40. We are experiencing this now. There was also September 2020, just before Bitcoin's ascent. There was also December 2016, just before the start of the parabolic phase, and this will be important for the rest of the video. And we also had it here in 2013, just before the start of the parabolic phase.
What this means is that we are too early in the cycle, while everyone is predicting a 4-year cycle with 3 years of growth and 1 year of decline. What the graphs are telling us, what the data shows us, is that the bull run has been delayed due to what happened during Covid. And this is normal because, logically, there was an enormous shock that was absorbed at the time by individuals, by companies, but also by central banks that had to print a lot of money. And so, naturally, this has negative effects. And the first negative effect is that it disrupts the cycles we know. We had an event that had never happened in modern human history, a global pandemic, a global blackout, and so naturally, this unprecedented event has repercussions that completely shift what we have known until now. And what did we know? We knew 4-year cycles in cryptocurrency. And so, according to this graph and according to the others I've shown you, we are only just entering a real bull run now.
So the question arises: okay, if we are entering a real bull run now, that explains why we haven't experienced a real altcoin season yet. It explains why, as I showed you in my last video, we have altcoins in an accumulation phase. Because if we look at Ethereum, for example, there is no parabolic phase; we are in an accumulation phase, in a huge range that has been in place since November 2021. We have only consolidated in a range that resembles a massive accumulation pattern. If I take altcoins chosen at random, like Ave, for example, there is no parabolic phase. We are in a phase where we are finishing a large accumulation phase. CRV is also extremely flat. We can see that we are not at all in an upward phase. If we take other cryptocurrencies like Uni, Tao, AVAX, Link, and so on, all these patterns are verified. We truly have patterns that are accumulation patterns, like those we saw just before the market rally. The last market manipulation we experienced last week, which we discussed in Monday's video, also confirms this last enormous accumulation, this exit of longs before we can have a real movement that will establish itself going forward.
If we compare the only altcoin that has already exited its accumulation phase, it's BNB. And if we look at the different cycles, I won't do it in this video, BNB has always emerged from its lull before others. So we find a pattern here, which again demonstrates that we seem to be entering a bull run, both in terms of liquidity, the manufacturing cycle, and the economic expansion cycle. And all of this would also explain why we don't have a fear phase yet, why we don't have a lot of retail investors arriving yet, because we are in an accumulation phase, we are at the bottom of the slope, and the fear phase and arriving retail investors are not happening now; it's later, when prices rise, when all altcoins start having parabolic phases like this, when it's talked about in the media, when there's truly a boom, euphoria, and many conditions specific to a bubble and the bursting of a bubble that will follow. But we'll talk about that in Friday's video.
So, the question that arises now is: very well, we've seen that we are not at all in an economic expansion phase yet and that we are entering it now. So, the question is, we understand why altcoins are not rising, but why is Bitcoin rising? Why is Bitcoin not in an accumulation phase but rather leading the charge, already surpassing highs and clearly at new ATHs? The answer consists of several elements.
First element: the massive arrival of institutional investors, ETFs, public companies buying Bitcoin, and therefore there is enormous buying pressure on Bitcoin compared to altcoins, and this causes a lot of money to flow into BTC.
Second element, and this is where the video will get a little more complicated, is regarding what is happening geopolitically, with US currencies, and the lack of confidence that is beginning to emerge in the dollar. Bitcoin has something in common with gold that explains why gold is rising now and why Bitcoin will take over shortly after. A debt cycle like the one we are currently experiencing, with the upcoming debt explosion, is not the first time we've seen it. We saw it during the 1929 crash. We saw it during the 2007-2008 crash. And what happens in these moments is that professionals, those with analysts who are much more effective than me in banks, in hedge funds, and who have worked on these cases for 10 years, have clearly identified that there is a strategy by the Fed and the US government to lower the value of the dollar, to kill the dollar temporarily in order to reduce debt, and to be able to refinance through T-bills, which we will discuss again, we will discuss it right after. And therefore, confidence in the dollar, which represents 50% of global trade, is beginning to decline.
We also need to move beyond our habit of focusing solely on the USA. The USA is an extremely important part of the world, that's for sure; 50% of trade is done in dollars, we know that too. But what you need to know is that there are many countries that hold a lot of assets in dollars. China, Japan, other economic superpowers that are important for liquidity and hold a lot of dollars. And what happens is that, naturally, if there is a dollar crisis and a lack of confidence in this currency, then everyone will want to preserve their purchasing power. Everyone will want to hold assets that will not devalue too much over time. And when there are periods of uncertainty regarding currencies, and especially the US currency, then you need to change assets. You need to change assets, move out of the dollar to go into assets that are not inflationary.
And which assets are the least inflationary and outperform inflation? We have gold first, and then right behind it, who do we have? We have Bitcoin. Bitcoin is not an inflationary asset, and it is an asset that has been gaining ground for many years and is starting to gain even more. So, naturally, in the list of non-inflationary and least risky assets, there is gold first. And that's why gold rises first. Now, gold will not rise to $10,000 an ounce. There is a price at which people will say it's becoming too expensive to rise further, it will require much more money. So the potential for gains relative to the inflation we will experience is shrinking day by day. And so, once this window becomes too narrow, investors will say, "Very well, where do we go?" We will go to the next asset, which is admittedly a bit riskier but is also non-inflationary and will offer much greater growth prospects than gold, and that is Bitcoin.
We saw in a previous video in what order this happens. We also saw that it was not the first time that there have been periods during which there was a major dollar crisis with a significant loss of confidence, gold rising to a crazy ATH and then calming down in favor of something else. So if you haven't seen these videos, go rewatch them because we talk about it recurrently because it's very important for understanding this cycle.
Regarding the Fed, I made a video on Monday explaining why the Fed will have no choice but to stop its quantitative tightening period by the end of the year, at the latest by January 2026. And what is quite interesting is that yesterday, Jerome Powell spoke. You can find this PDF directly on the internet. And what he explained are several things that are completely in line with what I am telling you.
The first thing he explained is that in their balance sheet, the Fed does not have enough short-term maturity treasury bonds and that they will buy some. So, when we say "buy some," it means a period of quantitative easing (QE) is coming. Will it be a slightly hidden QE, not reported on the balance sheet as they have done before? We will see. But in any case, he is clearly saying that the QT period will have to stop and that they want to replace their long-term bonds on their balance sheets with short-term bonds. And this is extremely important, you need to understand it. It plays out on two levels.
The first level is the balance sheet itself. The balance sheet, you can see here, this is a projection that was made a while ago and shows the difference in the Fed's balance sheet between what are called "bonds" and "notes," meaning all government bonds with a maturity longer than very short term. And you have T-bills, which are very short-term bonds in the US bond market. And what this chart predicts, and they were right, is that by June 2025, the Fed would have no more T-bills on its books; it would have no more T-bills on its books in favor of bonds and notes with longer maturities.
Why is this important? It is extremely important because, in terms of treasury bonds, treasury bonds are a way to finance debt. The US government issues bonds with different maturities that lenders will buy in exchange for a yield, an annual return, and repayment of the principal at the bond's maturity date. And this is a way the government has refinanced itself many times and will continue to do so. The problem versus the solution is that the more short-term bonds you have, the more sensitive they are to interest rate hikes or cuts. And so, you are starting to understand why the Fed, in this PDF, says it wants to start refinancing in terms of T-bills. You understand why X is starting to accelerate the Beto. Because when you listen to Jerome Powell's speech, everything is fine. The economy is in great shape. The S&P 500 is making new highs, the Nasdaq is making new highs. September 2024, we have a first rate cut. Very good. September 2025, a year later, we have the second cut. Even though in September 2025, economic data is better than in 2024. And even though the data is better in 2025 than in 2024, three rate cuts are planned by the end of the year. So there is a real acceleration of rate cuts. And while Jerome Powell says everywhere that it's to respect their dual mandate, market, inflation, blah blah blah blah blah, in reality, something is being disguised behind the scenes, which is the refinancing of this debt. And they will be able to improve the refinancing of this debt if, first, they lower the value of the dollar, which we have already seen. And so, a lower dollar means lower rates, which is the most effective way to achieve a lower dollar. And especially with lower rates, we can greatly influence yields on T-bills.
So here you have a 2-month one, and you see that as soon as we fell here, it was just during the rate cut in September. You can see a 0.25 rate cut, we fell. Since we cut by 0.25 here, we also start to fall on the 1-year one, that's also visible. However, if you look at the 20-year and 30-year bonds, you can see that they are much less sensitive to the Fed's adjustments. And this is normal because the benchmark rates will move over time. So very short-term maturity bonds will be influenced much faster. And when you look at this mechanism and read this PDF in which Jerome Powell essentially says that they will support the markets, that they will restart QE with T-bills, and that there will be successive rate cuts even though commercial data shows that the economy is doing very well, at least in terms of production factors and so on, it is increasing compared to last year. I'm not talking about the debt wall, I'm not talking about private debt. Those are other factors we'll see on Friday in the next video, which also announces the biggest bull market we'll have in our modern history. But in any case, for the short term, we clearly find all the catalysts that will lead to a continuation of the rise of this manufacturing cycle and a rise in all the indices that lead us to a bull run.
The structure we are currently forming on Bitcoin is very similar to what we saw in 2015. If you look at the Rainbow Chart here, I'm displaying it not for price targets but for the structure Bitcoin is forming. In fact, when you put it in logarithmic scale and look at its logarithmic evolution since its inception, what we are doing now, this pattern is extremely close to what we were doing here throughout 2015-2016, just before the explosion. At the end of 2017, you can see that we also had an evolution within a kind of channel just before the breakout and the rise. And this was in conjunction with all the economic and macroeconomic elements I showed you before. So we are truly in a zone here, if we believe the Rainbow Chart, we are in zones that are still blue or even green zones, which are zones of undervaluation or fair price for Bitcoin. So it's not the time to mess up your portfolio, it's not the time to do anything rash because there is fear, because there is manipulation, and so on. We truly have all the objective data that cannot be denied, which clearly shows that there is a much higher probability of us exploding in the coming months rather than regressing and entering a bear market.
That's all for today. If you liked the video, subscribe because I only make videos like this with real data, real statistics so you can see exactly where we are going and make the best decisions in financial markets. This is TR. Have a good day.