2030 Looking Back at 2025: That Year Wall Street Officially Takes Over Bitcoin

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Author: Daii

On a certain day in 2030, when the size of BlackRock's Bitcoin ETF surpassed the S&P 500 index fund, Wall Street traders suddenly realized: the thing they once mocked as a "Dark Web toy" is now controlling the throat of global capital.

But all the turning points began in 2025 - that year, the price of Bitcoin broke through $250,000 under the hunting of institutional whales, and no one could tell who it belonged to anymore. On-chain data shows that more than 63% of the circulating supply has been locked in institutional custody addresses, and the Bitcoin liquidity on exchanges has dried up to only support three days' trading volume.

The above is a fantasy, let's go back to the present.

A large amount of funds are continuously flowing out of Bitcoin ETFs, and Bitcoin has once fallen below $80,000. The explanation for this phenomenon mainly has two aspects: one is the policy side, which is the trade war launched by former US President Trump; the other is the capital side, which is due to the arbitrage strategy unwinding of 56% of short-term holders - hedge funds.

However, analysts believe that the current market is in the "distribution phase" of the Bitcoin bull market.

The "distribution phase" of the Bitcoin bull market usually refers to the late stage of the bull market, when the large holders ("whales") begin to gradually sell off their holdings, transferring Bitcoin from early holders to new entrants in the market. This stage means that the market is shifting from a frantic rise to the top area, which is a key link in the transition from bull to bear.

Without beating around the bush, let's give the answer first: the current market liquidity structure has already changed.

  • OG retail investors and OG whales are playing the role of sellers;

  • Institutional whales and new retail investors entering through ETFs have become the main buyers.

In the cryptocurrency field, "OG" is an abbreviation for "Original Gangster" (also often interpreted as "Old Guard"), referring to the earliest participants, pioneers or core groups who have been steadfast in the Bitcoin field.

In a word, old money is exiting, and new money is entering. Among the new money, institutions are the dominant force.

Next, we will provide you with a detailed analysis from the aspects of market structure, current cycle characteristics, the roles of institutions and retail investors, and the timeline of the cycle.

1. Typical market structure: Whales distributing to retail in the late bull market

The typical late stage of a Bitcoin bull market presents a pattern of whales distributing their holdings to retail investors. In other words, retail investors often buy at high prices in a frenzy, while the "smart money" whales take the opportunity to sell in batches at high prices and realize their profits. This process has played out multiple times in historical cycles:

For example, as the 2017 bull market approached its peak, the Bitcoin balance held by whales decreased, indicating that a large amount of holdings were transferred out of the whales' hands, because at that time there was a massive influx of new demand in the market, providing sufficient liquidity for the whales to distribute their positions, as detailed in: The Shrimp Supply Sink: Revisiting the Distribution of Bitcoin Supply.

In general, the market structure at the end of a traditional bull market can be summarized as: early large holders gradually sell off, market supply increases, and retail investors are driven by FOMO (fear of missing out) to buy in large quantities. This distribution behavior is often accompanied by signs such as increased Bitcoin inflows to exchanges and the movement of old coins on the chain, indicating that the market is about to top out and turn around.

2. Characteristics of the current bull market: Structural changes

The distribution phase of the current bull market (2023-2025 cycle) is different from the past, especially in the behavior of retail and institutional investors.

2.1 Unprecedented institutional participation in this cycle

The launch of spot Bitcoin ETFs and the large-scale purchase of Bitcoin by listed companies have made the market participants more diverse, no longer just driven by retail investors. The influx of institutional capital has brought a deeper pool of funds and more stable demand, directly reflected in the fact that market volatility has decreased compared to the past - according to the analysis, the maximum drawdown of the current bull market is significantly smaller than in previous cycles, with the high point usually not exceeding a 25%-30% correction, which is attributed to the involvement of institutional capital smoothing out the volatility.

At the same time, the market maturity has improved, with the rate of price increase decreasing cycle by cycle, and the trend becoming more stable, which can also be seen from indicators such as the growth rate of the Realized Cap: the Realized Cap of this cycle has only expanded a small part of the peak value of the previous cycle, indicating that the frenzy has not been fully released yet (see: Thinking Ahead).

Realized Cap is an important indicator for measuring the inflow of funds into the market. Unlike the traditional Market Cap, the Realized Cap does not simply multiply the current price by the circulating supply, but takes into account the price at the last transaction of each Bitcoin on the chain. Therefore, it better reflects the actual scale of funds invested in the market.

Of course, the above indicators may also indicate that the market is entering a more mature and robust development stage.

2.2 Retail investors in this cycle also show more rational and diverse behavior

On the one hand, veteran retail investors (individual investors who have experienced multiple cycles) are relatively cautious, locking in profits earlier after a certain degree of increase, which is different from the past situation of retail investors chasing the rise all the way to the top.

For example, data from early 2025 shows that small-scale holders (retail investors) net transferred about 6,000 BTC (about $625 million) to exchanges in January, starting to cash out earlier, while whales only had a slight net inflow of about 1,000 BTC during the same period, basically staying put. This divergence means that many retail investors believe the stage-wise top has been reached and choose to realize their profits, while the whales (seen as "smart money") remain unmoved, apparently expecting higher profit potential.

On the other hand, the enthusiasm of new retail investors is still accumulating. Indicators such as Google Trends show that public attention has retreated and "reset" after price hit new highs, not yet reaching the peak of nationwide frenzy seen at the end of previous cycles. This suggests that the current bull market may not have entered the final frenzy stage yet, and the market still has upside potential.

2.3 The behavior of institutional investors has become one of the important features of this bull market

The previous bull market in 2020-2021 was the first time we saw a large influx of institutions and listed companies, which actually led to an increase in whale holdings - the new "big players" like institutions bought a lot, and Bitcoin flowed from retail hands into these whale accounts.

This trend has continued in the current cycle: large institutions have been massively purchasing Bitcoin through OTC markets, trusts or ETFs, making traditional whales no longer net sellers, to some extent delaying the arrival of the distribution phase. This has made the distribution in this bull market more gradual and dispersed, rather than the simple retail investor buy-in model of the past: the depth and breadth of the market have improved, and the new capital is sufficient to absorb the holdings being offloaded by long-term holders.

Glassnode's report points out that a large amount of wealth has already or is in the process of shifting from long-term holders to new investors, which is a sign of Bitcoin market maturity - long-term holders have realized record-breaking profits (up to $2.1 billion in a single day), and new investors have sufficient demand to absorb these sell-offs, as detailed in Bitcoin sees wealth shift from long-term holders to new investors – Glassnode.

It can be seen that the interaction between retail and institutional investors in this bull market has created a more resilient market environment.

3. Changes in the roles of institutions and retail investors: The impact of OG retail investors and institutions on liquidity

As the structure of market participants evolves, the roles of institutions and retail investors in the distribution phase have also undergone significant changes.

Ki Young Ju, CEO of CryptoQuant, summarized the distribution pattern of this round as: "veteran-level" retail investors (OG retail) + existing whales → new retail investors (through channels like ETFs, MSTR) + new whales (institutions).

That is to say, retail investors and whales who have experienced the early cycles are gradually selling out, and the new buyers include not only traditional retail investors, but also ordinary investors who have entered the market through investment tools like ETFs, as well as new institutional capital playing the role of whales.

This diversified participation pattern is fundamentally different from the traditional "whales → retail" single-line distribution model.

  • In this cycle, OG retail investors (early individual holders) may hold a considerable amount of Bit, and they choose to cash out at the high points of the bull market, providing some selling pressure and liquidity to the market.

  • Similarly, OG whales (early large holders) will also sell in batches to realize profits of multiple or even tens of times. In response, institutional whales as the new buying force are massively absorbing these selling pressures, buying through custodial accounts and ETFs, and Bit is flowing from the old wallets to the custodial wallets of these institutions.

  • In addition, some traditional retail investors now also indirectly hold Bit through ETFs and listed company stocks (such as MicroStrategy's stock), which can be seen as a new form of "retail absorption".

This role transformation has had a profound impact on market liquidity and price trends.

3.1 More Bit are leaving exchanges

On the one hand, the selling behavior of OG holders often leaves obvious on-chain footprints: increased activity in old wallets, large transfers to exchanges, etc.

For example, in this bull market, it has been observed that some wallets that have been inactive for a long time have become active, transferring coins to exchanges to prepare for sale, which is a sign that old holders are starting to distribute their positions. Ki Young Ju pointed out that the activities of OG players will be reflected in on-chain and exchange data, while the liquidity of "paper Bit" (such as ETF shares, Bit-related stocks) will only be reflected in the on-chain records of custodial wallets when settled. That is to say, the inflow of institutional capital is mostly happening off-exchange or through custody, and the direct on-chain reflection is the increase in the balance of the custodian's addresses, rather than the direct flow on traditional exchanges.

The current exchange Bit balance is 2.22 million, which is also a reflection of this characteristic.

3.2 New whales and new retail investors are more resilient

On the other hand, institutional investors as the new whales not only provide huge buying support, but also enhance the market's absorption capacity and liquidity depth under selling pressure.

Unlike the past when retail investors dominated and were prone to panic and trampling, institutional capital is more inclined to accumulate on dips and make long-term allocations. When the market experiences a pullback, the intervention of these professional capital often helps to stabilize prices. For example, some analyses suggest that the reduced volatility in this bull market is due to institutional participation: when retail investors sell, institutions are willing to step in and ensure market liquidity, thereby reducing the magnitude of price retracements compared to the past.

Although the launch of Bit ETFs has brought a large amount of incremental capital to the market, some ETF holders (such as hedge funds) may be mainly for arbitrage trading, so their capital liquidity is relatively high. The recent large outflow of ETF capital indicates that some institutional capital is only doing short-term arbitrage, rather than holding long-term. The recent drop of Bit below $80,000 was due to the unwinding of hedge fund arbitrage strategies.

However, the new retail investors have shown stronger resilience, and they have not panicked and sold out in every adjustment, but are willing to continue holding, and the short-term holder indicator of Bit shows stronger anti-dumping ability.

In summary, the interaction between OG retail + OG whales and new institutional whales + new retail has formed the current market's unique supply-demand pattern: early holders provide liquidity, institutions and new buyers absorb the positions, making the distribution process in the late bull market more stable and traceable.

4. Timeline of market cycles: Historical trends and outlook for this bull market

Looking at historical data, the Bit market has shown a pattern of about a four-year cycle, with each round containing a complete cycle of bear market-bull market-transition. This is highly related to the Bit block reward halving event: after the halving, the new coin issuance drops sharply, and the following 12-18 months often see a round of significant price increases (bull market), followed by a bear market adjustment around the high point.

4.1 History

Reviewing the timelines of several major bull markets:

  • The first halving occurred at the end of 2012, and Bit price peaked in December 2013, about 13 months later;

  • The second halving was in 2016, and the bull market peak of nearly $20,000 came about 18 months later in December 2017;

  • The third halving was in May 2020, and about 17-18 months later, at the end of 2021, Bit experienced two peaks (April and November) approaching $70,000.

  • Based on this, the fourth halving in April 2024 may trigger a new bull market, and its peak is most likely to occur within one to one and a half years after the halving, that is, around the second half of 2025, which will be the final distribution phase (the end of the bull market).

Of course, the cycle is not mechanically repeated, and changes in the market environment and participant structure may affect the duration and peak of this bull market.

4.2 Optimistic

Some analyses suggest that the macroeconomic environment, regulatory policies, and market maturity will have a significant impact on this cycle.

For example, Grayscale's research team pointed out in their report at the end of 2024 that the current market is only in the mid-term stage of a new cycle, and if the fundamentals (user adoption, macroeconomic environment, etc.) remain good, the bull market may last until 2025 or even longer. They emphasized that the launch of spot Bit ETFs has expanded the channels for capital inflow, and the clarity of the US regulatory environment in the future (such as the potential impact of the new Trump administration) may also further boost the valuation of the crypto market.

This means that this bull market may last longer than past cycles, and the uptrend may extend beyond the traditional time window.

On the other hand, on-chain data also supports a longer bull market, for example, the real capital inflow (Realized Cap) growth in this cycle has not yet reached half of the previous high, indicating that the market frenzy has not been fully released. Some analysts therefore predict that the final high of this bull market may be far beyond the previous round, with common price targets of $150,000 or even higher.

4.3 Conservative

However, there are also views that the peak will occur within 2025.

Ki Young Ju of CryptoQuant expects that the final distribution phase of the Bit bull market (concentrated selling by various OG holders and institutions to the last absorbing capital) will occur within 2025. His judgment is based on the early distribution phase that has already begun and the observed influx of new retail capital, and he believes that there is no need to turn bearish prematurely before the final distribution is completed.

Combining historical patterns and current indicators, it can be inferred that this bull market is most likely to enter the final stage in the second half of 2025, at which time, as the price reaches a cyclical high, various holders will accelerate the distribution of their positions to complete the final distribution process.

Of course, the exact timing and height are difficult to predict, but based on the cycle length (about 1.5 years after the halving) and market signs (the degree of retail frenzy, the movement of institutional capital, etc.), 2025 may become a critical year.

Conclusion

As Bit transformed from a geek toy to a trillion-dollar strategic asset, this bull market may reveal a cruel truth: the essence of the financial revolution is not to eliminate the old money, but to reconstruct the genetic chain of global capital with new rules.

The current "distribution phase" is actually the coronation ceremony of Wall Street's formal takeover of the crypto world. When the OG whales hand over their chips to the Blackrocks, this is not the prelude to a crash, but the overture to the restructuring of the global capital landscape - Bit is evolving from the myth of sudden wealth for retail investors to the "digital strategic reserve" on the balance sheets of institutions.

The most ironic thing is that while retail investors are still calculating the "escape code", the Blackstones have already written Bit into their balance sheet templates for 2030.

The ultimate question in 2025: is this the peak of the cycle, or the birth pangs of a new financial order? The answer lies in the cold chain data - every withdrawal record of the OG wallets is adding bricks and tiles to the custodian addresses of the Blackrocks; every net inflow of the ETFs is rewriting the definition of "store of value".

A piece of advice for investors who have weathered the cycle: the biggest risk is not missing the pump, but using the 2017 mindset to interpret the 2025 rules of the game. When "holding addresses" become "institutional custodian accounts", and "halving narratives" become "derivatives of Fed rate decisions", this century-old transition has long surpassed the realm of bull and bear - history is repeating itself, but this time it's not the tears of retail, but the incessant on-chain transfers of institutional vaults.

This institutionalization trend may be analogous to the evolution of the Web1.0 era - the internet that once belonged to the geeks ultimately fell into the hands of the FAANG giants.

The recurrence of history is always full of black humor.

Source
Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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