Dialogue with Bitwise Investment Advisor: Liquidity tightening + geopolitical crisis, is there still a bull for BTC?

Compiled & Edited by: Deep Tide TechFlow

Guest: Jeff Park, Investment Advisor at Bitwise & Partner and Chief Investment Officer at ProCap BTC

Host: Anthony Pompliano

Podcast Source: Anthony Pompliano

Original title: The Bitcoin Bull Market Is CANCELLED?!

Release date: November 20, 2025

Key Points Summary

Jeff Park is a partner and Chief Investment Officer at ProCap BTC. In this conversation, we delve into the reasons behind the recent decline in Bitcoin prices and whether the market is truly signaling the arrival of a bear market. Jeff analyzes the key factors affecting market sentiment from the perspectives of liquidity pressure and global macroeconomic changes, noting that even if Bitcoin has shown some weakness this year, it may not be a completely pessimistic signal. Additionally, we discuss how Bitcoin prices can return to the highs of $125,000 to $150,000, as well as how the geopolitical landscape in regions such as Japan and China affects the global investment environment.

Highlights of the Discussion

Harvard is an early investor in the cryptocurrency space. Bitcoin is the largest holding of Harvard's endowment fund.

Cryptocurrency is a typical trend asset. Its characteristic is that prices tend to fluctuate drastically with changes in market sentiment, rather than reflecting its value through buying low and selling high like traditional value assets.

If Trump's approval ratings continue to decline, or if other chaotic events affecting cryptocurrency legislation occur in Washington, these may become bearish factors for the market, which might retest the support level of $75,000, thereby breaking the current upward momentum.

In this emotion-driven market, investors need to maintain mental agility and strategic flexibility.

The biggest challenge in the market currently is the lack of buying support.

The next bullish cycle of Bitcoin may benefit from these institutional capitals that do not rely on leverage.

In fact, perhaps we need a drop like this to release Bitcoin's “super cycle.” If we continue to get caught up in the framework of a four-year cycle, the market may fall into a psychological burden, believing that 2026 will be a down year.

It may be difficult to see positive signals in the short term, as the current global economy is facing some very serious issues. For example, liquidity crises, geopolitical risks, and Trump himself.

Unexpected situations similar to black swan events may become positive catalysts for Bitcoin. One possibility is that a sovereign nation suddenly announces the purchase of Bitcoin, particularly a major developed country within the Organisation for Economic Co-operation and Development (OECD); another factor that may drive up Bitcoin prices is the solution to the quantum computing problem.

Future institutional decisions may directly influence users' choices.

Why is Bitcoin falling? Should investors be worried?

Anthony:

Recently, the price of Bitcoin has been continuously falling, and many investors are feeling very worried. What do you think? What do you believe is happening behind the scenes?

Jeff:

I remember that about two or three weeks ago, we discussed the need to readjust our expectations regarding the price trends of Bitcoin, especially after a large-scale liquidation event occurred on October 10. This event not only impacted market sentiment but also shook retail investors' confidence in Bitcoin. Moreover, it affected people's long-term views on the institutional crypto market, which may not be functioning as well as everyone had anticipated.

At present, we still face many unresolved issues. For example, there are rumors that some market makers may be at risk of bankruptcy, which could further dampen the market's risk appetite. This week's market performance has highlighted a core characteristic of cryptocurrencies: they are typical trend assets. The characteristic of trend assets is that their prices often fluctuate dramatically with changes in market sentiment, rather than reflecting their value through buying low and selling high like traditional value assets. The investment logic of Bitcoin leans more towards 'buying high and selling higher,' meaning that it is more in line with its nature to enter the market only when the price breaks through key levels.

When Bitcoin broke the important support level of 100,000 USD, many people in the market began to worry about the arrival of a bear market. The price has now fallen to around 90,000 USD, and it even briefly dipped below 90,000 USD last night. In this situation, the market is filled with feelings of disappointment, panic, and uncertainty. However, investors who have experienced multiple cycles know that this is precisely the process of market self-adjustment. In the end, there will always be new buyers and sellers re-entering the market at what they consider suitable price points, and the breakout of trend signals is exactly how the market moves.

At the same time, we need to be patient and recognize that the current uncertainty is not limited to the cryptocurrency market, but is a common challenge faced by the global macroeconomy. In this context, I am reminded of a saying from the trading community: “Making mistakes is acceptable, but repeating mistakes is not acceptable.” Currently, many investors are reassessing their portfolios, waiting for better entry opportunities. This mentality may create a self-reinforcing cycle that further depresses prices. Now, some even predict that Bitcoin could drop to $75,000.

In this emotion-driven market, investors need to maintain psychological agility and strategic flexibility. At the same time, we must remember that the core characteristic of Bitcoin is its nature as a trend asset, which will not change due to short-term fluctuations.

Are technical indicators similar to CME gaps really important?

Anthony:

I have been paying attention to technical analysis, but to be honest, I feel like it is more of a “game rule.” Although I do pay attention to what others say, I don't fully trust these analyses and certainly don't use them as the basis for my decisions.

However, I have recently seen many people discussing the issue of the CME gap. Now that Bitcoin has reached this point, the price seems to be stabilizing and even rising slightly. In your opinion, are these indicators that are more inclined towards technical analysis really important?

Jeff:

Yes, I believe that in a highly technical market like cryptocurrency, focusing on microstructure is indeed very important, as it is a key tool for predicting short-term price movements. I usually differentiate between short-term price fluctuations and long-term price trends. Long-term prices can be assessed through trend establishment or mean reversion, but short-term price fluctuations are mainly driven by leveraged trading.

The price of cryptocurrencies is largely influenced by the futures market, especially perpetual futures. The characteristics of perpetual futures determine their amplifying effect on price fluctuations, which is why people pay particular attention to the number of open contracts and different liquidation levels. Since October, we have seen no significant recovery in long positions with leverage, while leveraged short positions remain active. This imbalance can cause market prices to move towards liquidity gaps. The design of perpetual futures is inherently tactical; once the liquidation point is reached, it triggers forced liquidations, further exacerbating price volatility.

The biggest challenge in the current market is the lack of buying support. Without new buyers entering the market, it is difficult for prices to stabilize or even rebound. I believe that the inflow of institutional capital will be a key source for a market rebound in the future. Therefore, the capital flow of ETFs (Exchange-Traded Funds) has become an important observation indicator. Recently, we have noticed that the inflow of ETFs has shown negative growth, which has put some pressure on market sentiment. In addition, the financial condition of enterprises and Wall Street's adoption of structured products may also affect market liquidity.

However, my intuition is that some investors still wish to increase their exposure to Bitcoin, but they may be waiting for a better entry opportunity. Generally speaking, when prices reach a higher safety margin, investors are more willing to enter the market. In fact, ETF investors are often the most stable participants in the market. If you look at the fund flows of Bitcoin ETFs this year, you will see a significant gap between net inflows and outflows, indicating that these long-term investors still have confidence in Bitcoin.

I believe that the next bullish cycle for Bitcoin may benefit from institutional capital that does not rely on leverage. They typically have a long-term perspective and view Bitcoin as part of a global asset portfolio, rather than simply comparing it to other cryptocurrencies. These investors may weigh Bitcoin against assets such as gold, Nvidia stocks, and Japanese government bonds, thereby deciding whether to increase their allocation to Bitcoin.

Harvard's Bitcoin holdings and the investment strategy of its endowment fund

Anthony:

You once worked at Harvard for a period of time. Recently, there have been reports that the largest holding of Harvard's endowment fund is actually Bitcoin. Some speculate that this may not just be a simple spot investment, but involves some kind of short-term trading strategy.

Can you explain how endowment funds like Harvard typically invest? Should we pay special attention to this news, or are there other noteworthy details that might be overlooked?

Jeff:

Indeed, the Harvard endowment is a very interesting case, as its investment strategy has undergone multiple adjustments during the tenures of different chief investment officers. When I worked at the Harvard endowment, the management model of the fund was very flexible, similar to the operations of hedge funds. The internal team directly managed the balance sheet, engaged in high-frequency risk trading, and employed an SMA (Single Managed Account) structure to enhance capital efficiency. However, with the appointment of NARV, the strategy of the Harvard endowment gradually leaned towards a more traditional Yale model, which involves allocating funds to external fund managers to assume risks, while the direct risk exposure from the internal team has been gradually reduced.

Regarding the current investment strategy, I believe their investment exposure is very tactical and specific. For example, if the core returns of Bitcoin align with their asset allocation goals, then incorporating it into the portfolio is completely reasonable. Additionally, they may take advantage of the price differences between spot and futures to engage in relative value trading. This strategy has historically been widely adopted by institutional investors such as pension funds, especially in balance sheet management.

I cannot precisely understand the current operational details of Harvard, but in the cryptocurrency market, there are sometimes low-risk or even no-risk arbitrage opportunities. For example, by hedging Bitcoin risks in different directions, investors can achieve stable returns.

Harvard has actually been an early investor in the cryptocurrency space. They have been entering this market through venture capital funds for nearly 10 years, so it can be said that they are very experienced in this area and adept at obtaining alpha in various ways.

Nevertheless, it is surprising to see Bitcoin become the largest holding of Harvard's endowment fund. Whether it is due to their directional long strategy or a market-neutral strategy, it indicates that the scale and depth of the Bitcoin market have grown sufficiently to accommodate such a major investment from a $55 billion endowment fund. This was unimaginable five years ago.

Has options trading changed the market dynamics of Bitcoin?

Anthony:

I have noticed that the types of participants in the Bitcoin market are becoming increasingly diverse, including retail investors, as well as institutional investors such as hedge funds, professional traders, and asset management companies. Companies like Blackstone are entering the market through passive ETF products, while endowments may operate using their balance sheets. Some countries' and enterprises' financial departments are also participating in the market through ETFs and other means.

Assuming you have a one dollar investment strategy, this dollar may not necessarily flow entirely into the spot market. If someone buys a Bitcoin ETF, theoretically, the funds of the ETF will eventually flow into the spot market, but it is possible that only 99.9% or some other proportion will actually enter the spot market.

I would like to know if the emergence of options has, to some extent, diverted the capital and energy that would originally flow into the spot market?

Jeff:

There are indeed more choices in the market today, and more choices mean more complex risk stratification, maturity stratification, and asset-liability stratification. The emergence of these layers has, in fact, changed the market's direct exposure to Bitcoin spot. In other words, investors can indirectly hold Bitcoin through more complex financial instruments without having to buy the spot directly.

Before the emergence of these complex financial products, our insights into the crypto market primarily relied on exchange trading volumes, dynamics of the derivatives markets, and analysis of on-chain data. These were the main decision-making bases at that time. However, there are now new decision nodes in the market, especially with the participation of large institutional players. They invest in Bitcoin-related assets through various credit instruments, and the price fluctuations and yield of these instruments directly impact the demand for Bitcoin. For example, companies like MicroStrategy utilize these instruments to accumulate Bitcoin, which was not possible in the past.

Although the current trading volume in the market is not very high, I believe that the impact of these complex products is even more important than the trading volume itself. For example, last week there were reports that an investor purchased nearly 900 million dollars' worth of Bitcoin in one go, which has become one of the biggest news stories in the market recently. This indicates that physical buying (i.e., directly purchasing spot Bitcoin) remains the core driving force of the market.

The market has indeed changed from the past, but ultimately the dynamics of the market still depend on those investors who seek exposure to Bitcoin and are willing to take on Bitcoin risk. This demand must be met in some way, which often means that someone on the other end is buying actual Bitcoin.

What signals does Jeff pay attention to in order to gauge market optimism?

Anthony:

In the current market downturn, with widespread pessimism, which areas do you think might show optimistic signals? We have noticed that some large holders have started buying Bitcoin between $89,000 and $90,000. Although bad news continues to emerge and people are very concerned, can you point out some market signals that give you hope?

Jeff:

One signal that makes me feel optimistic is that Bitcoin has shown resilience in intraday price fluctuations compared to other risk assets. Even when the stock market has plummeted significantly due to the so-called “AI bubble,” Bitcoin does not seem to be entirely affected. For example, if Palantir's stock price drops by 40%, I don't believe Bitcoin would drop by 40% in the same period. Once the correlation between Bitcoin and other assets is broken, this independence will attract institutional investors, as Bitcoin can provide different performance in their portfolios.

For institutional investors, a key reason for choosing Bitcoin is that its performance needs to differ from traditional assets. As long as Bitcoin can demonstrate this “orthogonality” (i.e., a lower correlation with other assets), it has the opportunity to be included in more portfolios. Although Bitcoin's recent gains may not be as significant as gold's, and its volatility is not as pronounced as Nvidia's, these differences are precisely Bitcoin's unique advantages. In the long term, this characteristic means that the demand and potential for Bitcoin will further increase. I think this is a very optimistic aspect.

Moreover, the volatility of Bitcoin's price is also a characteristic worth noting. For example, Bitcoin may drop by $35,000 within 40 days, but it could also rise by $35,000 within 20 days. This rapid shift in sentiment can act as a catalyst for the market, especially when investors view it as a unique asset exposure.

Has the four-year cycle officially become invalid?

Anthony:

In addition, the volatility of Bitcoin prices is also a notable characteristic. For instance, Bitcoin may drop by $35,000 in 40 days, but it can also rise by $35,000 in 20 days. This rapid change in sentiment can serve as a catalyst for the market, especially when investors view it as a unique asset exposure.

Jeff:

I believe that, from a logical and fundamental perspective, the theory of the four-year cycle is no longer applicable. This theory was originally based on Bitcoin's “halving” events, but now, the impact of halving on new demand in the market has significantly weakened. The current market is more driven by the capital demands of institutional investors, so a new cycle that aligns more closely with institutional investment behavior should emerge.

However, the four-year cycle theory may still continue to exist, as there are still a large number of investors who believe in its validity. These investors are often early supporters of Bitcoin, and their belief in the four-year cycle almost takes on a prophetic quality. If we look at the holding situation of Bitcoin, wallets that hold more than 10,000 Bitcoins still control about one-third of the market supply. This means that if these large holders believe the four-year cycle is real and act according to this theory, then this belief may become self-fulfilling and continue to influence market prices. Although, from a rational perspective, this should not happen, the structural realities of the market make it possible.

Interestingly, the price of Bitcoin is now below the level it was at the beginning of the year. If the price continues to decline by the end of this year, it would actually break the pattern of the four-year cycle, potentially leading us into a new “three-year cycle.”

In fact, perhaps we need a drop like this to release Bitcoin's “super cycle”. If we continue to get entangled in the framework of a four-year cycle, such as Bitcoin only rising 5% in 2025 and ultimately closing at $98,000 or $99,000, then the market may fall into a psychological burden, believing that 2026 will be a down year. Therefore, I actually hope that the market can completely adjust this year, ending the dependence on the four-year cycle and opening up a whole new growth phase for the future.

Anthony:

We all know that Bitcoin once had an amazing performance in a short period of time. Do you think it is possible for it to quickly rebound in the next six weeks and even reach $140,000?

Jeff:

Of course it is possible. The Bitcoin market is full of uncertainty, and anything can happen. I believe the outcome we hope to see is either a significant rise in Bitcoin before the end of the year, making this an important bullish year; or a slight decrease this year, allowing us to completely break free from the constraints of the four-year cycle and clear psychological barriers for market development in 2026 and beyond. In any case, the Bitcoin market is always full of possibilities.

Macroeconomic risks: liquidity, global conflicts, and the “Trump premium”

Jeff:

From a realistic perspective, what kind of catalyst do we need to drive changes in the market? To be honest, I think it may be difficult to see positive signals in the short term, as the current global economy is facing some very severe issues. For instance, the “K-shaped economy” we mentioned earlier indicates that the divergence in economic growth is intensifying, which is clearly a long-term problem. Additionally, the U.S. economy may face more adverse factors, such as a liquidity crisis. Moreover, the market's focus has even surpassed the question of whether the Federal Reserve will cut interest rates in December. Although interest rate policies do have an impact, the bigger issue right now is the uncertainty of the overall economy and the prevailing anxiety.

At the same time, geopolitical risks are also on the rise. For example, the recent territorial dispute between Japan and China over the Diaoyu Islands could lead to greater conflicts. For many Westerners, this may be a relatively unfamiliar event, but in essence, it is likely to become the fuse for the “Third World War” in Asia. Once this conflict escalates, it could involve Taiwan, Japan, and South Korea. As far as I know, Japan dispatched some diplomats last night in an attempt to ease the situation, but China rejected this proposal and took a hardline stance, stating that the situation is not developing positively. Behind this game of chess, it also reflects China's feelings of being cornered in the trade war with the United States, hence using it as a bargaining chip. However, resolving these issues often takes a long time.

If this geopolitical uncertainty continues to exist, it may become the main reason for the market to avoid risks, even prioritizing it over the impact of the Federal Reserve's interest rate cuts. In this case, the likelihood of Bitcoin rising to $150,000 will also be suppressed.

Another risk worth noting is Trump. If we believe in the so-called “Trump Umbrella” theory, then Trump's policies and influence could be one of the main reasons for Bitcoin rising from $75,000 to $125,000.

However, it is equally important to note that if Trump's approval ratings continue to decline, or if other chaotic events in Washington affect cryptocurrency legislation, this positive impact may reverse and even become a negative factor for the market. We need to ask ourselves whether these risks have been fully factored into the market. If not, then the market may retest the support level of 75,000, thereby breaking the current upward momentum.

Of course, what the specific catalyst is, is currently difficult to predict. Anything can happen, but generally speaking, the real catalysts are often some unexpectedly significant events.

What would an unexpected positive event for Bitcoin look like?

Jeff:

Unexpected situations like black swan events could serve as positive catalysts for Bitcoin. So, what kind of black swan events could have a positive impact on Bitcoin? I believe one possibility is that a sovereign nation suddenly announces the purchase of Bitcoin, especially from a major developed country within the Organisation for Economic Co-operation and Development (OECD). If one morning we wake up to such news, and this country actually takes action, Bitcoin's price could potentially soar to $150,000 overnight. However, such news must be genuine and not the kind of fake news we have seen over the past year.

Another potential factor driving up the price of Bitcoin is the solution to the quantum computing problem. Quantum computing has long been viewed as a potential threat because it could crack Bitcoin's encryption algorithms. However, if we revisit this topic, let's assume that some large Bitcoin holders (the so-called whales) are selling off, and their reasons may be just as irrational as their rationale when they bought in 2012 or 2011. Therefore, we must consider these tail events (i.e., extreme events) as potential catalysts that could change their behavior. If these whales are concerned about the threat of quantum computing, and a solution emerges in the market, that could at least alleviate the selling pressure. Once the selling pressure decreases, we should see buying gradually providing more support for price movements.

This is not just a demand-side issue; the supply side also needs to be adjusted. We need to rebalance the supply and demand relationship in the market to create better conditions for the price of Bitcoin.

Moreover, this weekend, a renowned cryptographer, Sorensen, made a concerning statement. He mentioned that by 2028, the cryptographic algorithms used by Bitcoin could be broken by quantum computing. This is much earlier than many had anticipated. The timeframe we are discussing is only the next four years. This potential risk hangs over Bitcoin like a dark cloud. Only when these catastrophic tail risks are thoroughly addressed will the supply-side shocks dissipate, allowing the market to achieve true stability and growth.

How to assess the risks of quantum computing?

Anthony:

Regarding quantum computing, I often tell people that there isn't actually a true quantum computer yet. Although scientists may be getting closer to this goal, it remains merely a theoretical threat. It's like flying cars; although research and progress have been ongoing, they have not really materialized.

Should we be concerned about this technology? Will you try to assess its risks? Or give it a probability? Or will you wait until that day to address it? What is your view on this issue?

Jeff:

I think we can observe from the market's reaction, such as what is driving people's interest in cryptocurrencies and how they are “voting” with their funds and wallets. We have recently seen Zcash's price surge significantly over the past two months, which is related to discussions around Quantum Resistance. Zcash is considered to have an advantage over Bitcoin in addressing the threats posed by quantum computing, thus attracting a large influx of capital, indicating that the market's concerns about the potential risks of quantum computing are intensifying.

From my perspective, the issues of quantum computing and privacy protection are very important, but in the context of divisions within the Bitcoin developer community, this issue may be overstated. While we cannot accurately assess the threat of quantum computing to Bitcoin in the short term, we can evaluate the health of the Bitcoin developer community. Whether the developer community is united and whether it can collaborate with supporters will impact the technological development and market confidence of Bitcoin. However, as it stands, the condition of the developer community is not ideal, and many early investors are disappointed with the divisions within the community.

Perhaps we can use some social intelligence analysis tools to observe the willingness of the developer community to solve technical problems and their emotional changes, such as the fear and greed index. However, from the current situation, this sentiment seems to be at a historical low. If you talk to those who experienced the block size debate in 2017, they would find many similarities between the current situation and the one that led to the split of Bitcoin at that time. If a soft fork or hard fork event really occurs in the future, then before these splits happen, market sentiment will become more tense, as most people do not want to take on additional risks in such an uncertain environment.

Anthony:

If a fork event really occurs, can you imagine how large financial institutions would react? They might say, “Wait, Bitcoin is going to fork? Am I going to get two coins? Should I hold on to them? Sell them? Or hedge my risks?” This situation sounds both worrisome and exciting.

Jeff:

Actually, I have some expectations for this. This situation may be an opportunity for companies like Bitwise to differentiate themselves from traditional financial giants like BlackRock. We know that cryptocurrencies are active technological assets that require professional services for management. And we may adopt different strategies to address clients with varying risk tolerances. It reminds me of the block size debate in 2017. At that time, Coinbase decided not to support Bitcoin Cash, while Kraken chose to support it. As a result, many users shifted from Coinbase to Kraken, indicating that institutional decisions can directly influence user choices.

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