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 the Bitcoin ETF, 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 fact that 56% of the short-term holders - hedge funds - have closed their arbitrage positions.
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 whales (the "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 who have entered 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 group 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 distribute to retail investors at the end of the bull market
The typical end of the Bitcoin bull market presents a pattern of whales distributing their holdings to retail investors, that is, the early large holders sell their coins at high prices to the latecomers.
In other words, retail investors often buy at high prices in a frenzy, while the "smart money" whales take the opportunity to sell off in batches at high prices, realizing their profits. This process has been repeated multiple times in historical cycles:
For example, as the 2017 bull market approached its peak, the net balance of Bitcoin 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: the early large holders gradually sell off, the 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 new 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 coin purchases 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 the 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 the past cycles, with the high point correction usually not exceeding 25%-30%, which is attributed to the intervention of institutional capital to dampen the volatility.
At the same time, the market maturity has improved, the price increase has decreased cycle by cycle, and the trend is 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 (see: Thinking Ahead).
Realized Cap is an important indicator for measuring the inflow of market funds. 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 amount of capital invested in the market.
Of course, the above indicators may also indicate that the market is entering a more mature and healthier 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, and lock in profits earlier after a certain degree of increase, which is different from the past situation where retail investors chased the rise all the way to the top.
For example, the data in 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 in advance, 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 that the stage has topped out and choose to realize their profits, while the whales (seen as "smart money") remain unmoved, obviously 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 hitting new highs in prices, and has not yet reached the peak of 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 there is still upside potential in the market.
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 that a large number of institutions and listed companies entered the market, and at that time, the phenomenon of an increase in whale holdings actually occurred - the new "big players" like institutions bought a lot, and Bitcoin flowed from retail investors to these whale accounts.
This trend has continued in the current cycle: large institutions have massively purchased Bitcoin through OTC markets, trust funds or ETFs, making the traditional whales no longer net sellers, to some extent delaying the arrival of the distribution phase. This makes the distribution of this bull market more gradual and dispersed, rather than the past model of simply being absorbed by retail investors: the depth and breadth of the market have improved, and the new capital is sufficient to absorb the holdings thrown out by long-term holders.
A Glassnode 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 the maturity of the Bitcoin market - 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, see 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. The changing roles of institutions and retail investors: The impact of OG retail and institutions on liquidity
With the evolution of the market participant structure, the roles of institutions and retail investors in the distribution phase have also undergone significant changes.
CryptoQuant CEO Ki Young Ju summarized the current allocation pattern as: "OG holders" (early individual holders) + "OG whales" → new retail investors (through ETFs, MSTR, etc.) + new institutional whales.
In other words, the early-cycle holders and whales are gradually selling out, while the new buyers include not only traditional retail investors, but also ordinary investors who have entered the market through investment tools such as ETFs, as well as new institutional capital playing the role of whales.
This diversified participation pattern is completely different from the traditional "whales → retail" single-line distribution model.
· In this cycle, OG holders (early individual holders) may hold a considerable amount of BTC, and they choose to cash out at the top 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 several times or even tens of times. In contrast, institutional whales, as the new buying force, are massively absorbing these selling pressures. They are buying through custodial accounts and ETFs, and BTC is flowing from old wallets to the custodial wallets of these institutions.
· In addition, some traditional retail investors now also indirectly hold BTC 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 BTC is leaving exchanges
On the one hand, the selling behavior of OG holders often leaves obvious on-chain traces: increased activity in old wallets, large transfers to exchanges, etc.
For example, in this bull market, 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 BTC" (such as ETF shares, BTC-related stocks) will only be reflected in the on-chain records of custodial wallets when settled. That is, the buying of institutional capital often occurs 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 in traditional exchanges.
The current BTC balance on exchanges is 2.22 million, which is a reflection of this characteristic.
3.2 New whales and new retail 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 ability to absorb selling pressure and the depth of liquidity.
Unlike the past when the market was dominated by retail investors who were prone to panic and stampede, institutional capital is more inclined to accumulate on dips and make long-term allocations. When the market experiences a correction, 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 the participation of institutions: when retail investors sell, institutions are willing to step in to ensure market liquidity, thereby reducing the magnitude of price pullbacks compared to the past.
Although the launch of BTC ETFs has brought a large amount of incremental capital to the market, some ETF holders (such as hedge funds) may be primarily engaged in arbitrage trading, so their capital has high liquidity. The recent large outflows of ETF capital indicate that some institutional capital is only engaged in short-term arbitrage, rather than holding long-term. The recent drop in BTC below $80,000 was partly due to the unwinding of hedge fund arbitrage strategies.
However, the new retail investors have shown strong resilience, and they have not panicked and sold out in every adjustment, but are willing to continue holding. The short-term holder metric of BTC shows stronger anti-dumping ability.
In summary, the interaction between OG holders + OG whales and new institutional whales + new retail has formed the current market's unique supply-demand pattern: early holders provide liquidity, and 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
Historically, the BTC market has shown a pattern of about a 4-year cycle, with each cycle containing a complete cycle of bear market-bull market-transition. This is highly related to the BTC block reward halving event: after the halving, the new coin issuance drops sharply, and a sharp price increase (bull market) often occurs in the following 12-18 months, followed by a bear market adjustment around the high point.
4.1 History
Reviewing the timelines of major bull markets:
· The first halving occurred at the end of 2012, and BTC price peaked about 13 months later in December 2013;
· The second halving was in 2016, and the bull market peak of around $20,000 occurred about 18 months later in December 2017;
· The third halving was in May 2020, and BTC experienced two peaks (April and November) close to $70,000 about 17-18 months later at the end of 2021.
Based on this, it is speculated that the fourth halving in April 2024 may trigger a new bull market, and the 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 see 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 macro environment, regulatory policies, and market maturity will have a significant impact on this cycle.
For example, Grayscale's research team pointed out in a report at the end of 2024 that the current market is only in the mid-stage of a new cycle, and if the fundamentals (user adoption, macro environment, etc.) remain good, the bull market may last until 2025 or even longer. They emphasized that the launch of spot BTC ETFs has expanded the channels for capital to enter the market, and the clarity of the US regulatory environment in the future (such as the potential impact of the 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 Realized Cap growth mentioned above has not yet reached half of the previous cycle's high, indicating that the market frenzy has not been fully released. Some analysts therefore predict that the final peak of this bull market may far exceed the previous cycle, 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.
CryptoQuant's Ki Young Ju expects that the final distribution phase of the BTC bull market (concentrated selling by various OG holders and institutions to the last wave of buyers) 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 speculated 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 peak, 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 BTC has evolved from a geek's 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.
This is the "distribution phase", which 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 reconstruction of the global capital landscape - Bitcoin 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 velocity of cryptocurrencies", the Blackstones have already written Bitcoin into their 2030 balance sheet templates.
The ultimate question of 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 from OG wallets is laying the foundation for Blackrock's custody addresses; every net inflow of ETFs is rewriting the definition of "store of value".
A piece of advice for investors who have weathered the cycles: The biggest risk is not missing the pump, but interpreting the rules of the 2025 game with the mindset of 2017. When "holding addresses" become "institutional custody accounts", and "halving narratives" become "derivatives of Federal Reserve interest rate decisions", this century-old transition has long since transcended the realm of bull and bear markets -
History always repeats itself, but this time it's not the tears of retail investors, 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, which was once the domain of geeks, ultimately fell into the hands of the FAANG giants.
The cycle of history is always full of black humor.
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