Did The Next Bitcoin Cycle Just Start? | Jeff Park

— Crypto sentiment remains pessimistic despite positive macro data (strong equities, gold, weak dollar, rate cuts), driven partly by competition from AI hype and ideological concerns about whether blockchain projects truly serve crypto's original mission of censorship resistance.

— Bitcoin faces supply-demand imbalance; new supply from miners and institutions has outpaced incremental demand from ETF buyers and digital asset treasuries, creating commodity-like price pressure.

— The shift from retail to institutional ownership is reshaping Bitcoin's price cycles; institutional fiduciaries operate on 2–3 year horizons and profit-taking schedules rather than the traditional 4-year halving cycle.

— MicroStrategy's digital credit strategy and potential Bitcoin sales are contentious; Park argues selling would be a volatility muter and last resort, prioritizing equity issuance and derivatives over asset liquidation.

— Tether's stability is mischaracterized; despite $180B in assets backing $175B in liabilities, it holds substantial equity cushion (~$30B), generates massive annual profits ($13B by end of 2024), and maintains sufficient liquidity for redemptions.

— QT's end and shift to "ample reserves" regime mark a structural regime change; the Fed now acts as continuous lender via standing repo facility, reducing volatility and liquidity discovery events while amplifying government-monetary authority alignment.

— Bitcoin recently reclaimed above $90K after volatile week; implied volatility in the 50s, down from 70s at start of year and 60s at peak—still healthy for price discovery.

— S&P up ~13% YTD; gold up ~60% YTD; Bitcoin down over last 12 months. Tight correlation between Bitcoin and equities has weakened the "non-correlated portfolio hedge" narrative.

— MicroStrategy holds ~650,000 BTC (~$57B at current prices), sufficient to fund preferred dividend obligations for 7+ years; new $800M USD reserve addresses near-term dividend coverage concerns.

— Fed balance sheet at $6.5T; standing repo facility tapped $14B on day QT ended. Structural shift to "ample reserves" regime signals persistent liquidity backstop.

— Institutional adoption is reshaping Bitcoin volatility patterns and price cycles; expect fund managers' 2–3 year investment horizons and year-end profit-taking to matter more than on-chain retail metrics going forward.

— Tether concerns are overblown; the stablecoin is one of the most over-collateralized and liquid asset-liability machines globally, with massive equity cushion, strong profitability, and critical use in remittances—worth supporting as pro-crypto infrastructure.

— QT ending signals increased Fed intervention and liquidity provisioning; future price catalysts will depend on identification of the next crisis area requiring government-Fed backstop (private credit, AI data center loans, etc.) rather than QT timeline alone.