We get to 5% of the network bitcoins going to be a million a
coin. The supply shock is really
inevitable. There's not enough supply to eat
up a billion a week from micros value.
The general sentiment will flip from being short to being long
and we'll have a face ripping rally.
The biggest buyer in history just absorbed another quarter
billion dollars of Bitcoin and the price barely moved.
The bears are piled into the most negative funding rates in
bitcoins history. The Cycle Bros are calling for
one more leg down and almost no one is talking about the math
hiding in plain sight. A single a curve that fits every
one of Michael Saylor's Bitcoin purchases.
A curve that says the supply shock everyone keeps waiting for
hasn't even started yet. My goal today is to walk you
through that math, show you the short squeeze quietly building
underneath the price, and explain why the next 18 months
may break every Bitcoin cycle assumption you've held for the
last decade. This is truth block.
I'm Hurley. Let's mind truth.
Bitcoin started the week with a small dip down to about $76,000.
About six months ago we were at the all time high of about
126,000, so we're currently 39% off the highs.
Sentiment is a mixture of boredom and exhaustion.
The chart looks like a textbook 4 year cycle drawdown right on
schedule. Earlier this morning Sailor
announced another buy 3273 Bitcoin roughly $255,000,000
worth. That brings strategies total to
818,334 coins along with last weeks monstrous purchase
strategy now holds more Bitcoin than BlackRock Spot ETF ibit
that's a single corporation with more Bitcoin than the biggest
spot ETF on Wall Street meanwhile on the other side of
the trade, the bears are absolutely stacked negative
funding rates on binance just hit a three standard deviation
extreme the most negative print in bitcoin's history we've been
below the line for 46 days straight now we'll get into what
all this means a little bit later, but for now I just want
you to hold this picture in your head.
The largest buyer in history just continues to buy.
The most leveraged short positioning in history is
fighting it, and the price is doing nothing.
That's contradiction We're walking through today, and the
only way to make sense of it is to stop staring at the price
chart and start looking at the math underneath it.
While everyone else has been staring at the price, Sailor has
been laying out his own math. This clip is from his sit down
with David Gochtein in December. It's four months old, but the
math hasn't changed. Watch how clearly he frames the
ceiling. What I've said is, is if we get
to 5% of the network, bitcoins going to be a million a coin.
If I get to 7 1/2% of the network, it'll be 10 million a
coin. So think of it as I'm buying
something getting exponentially more expensive, using
exponentially more money and where, where do we top out?
You know, I think we top out between 5 and 7 1/2% and then we
just exponentially slow down, right?
And the rest of the network is right now it's, you know after
$100 billion of money from BlackRock and 50 billion from
us, 85% of the Bitcoin is held by the O GS.
After the next trillion dollars from the big institutions, maybe
it'll be 75% will be held by the O GS.
So it's think of us as powering the network up and we're pushing
against an exponentially hardening asset and that's the
way it should be. Look at 95% percent of the
bitcoins been mined by the year 2030.
Five, 99% that last 1% of Bitcoin comes out between the
year 2035 and the year 2140. It's 100 years to get the last
1%. And so when we look at it like
that and we will just be like the little engine that could, we
will keep, you know, turning the crank, powering the network, you
know, driving up the network value for everybody.
And and you know, I think that you can do that at least for the
next 100 years. I don't know what happens after
100 years. I haven't worked that out yet
that the AI version of me will be will be giving interviews in
100 years about what we're doing next.
But that won't be me. So Saylor gave us his own model
in plain language. He says that when strategy gets
to 5% of the network, that gets us to $1,000,000 per coin. 7.5%
gets us to 10 million. Then his accumulation slows
down. He calls it exponentially
hardening, meaning the more you buy, the more expensive every
additional coin gets. Now that's not a price
prediction, that's a description of what happens when a price
insensitive buyer pushes against an asset with a fixed supply.
And here's the part that gets me.
Strategy now holds 3.9% of all the Bitcoin.
By Sailor's own model, he just needs 5% to trigger the
$1,000,000 per coin. So either he overestimated the
price impact of his buys and he can therefore buy more, or will
soon see a very sudden repricing like Bitcoin loves to do.
Regardless, he's giving us the shape of the curve, and it turns
out that shape can actually be drawn.
A Bitcoin analyst on X who goes by the name of Plan C did
something interesting. He took every one of strategies
Bitcoin purchases and tried to fit them to a curve,
specifically an S curve. And the fit is shockingly clean.
The curve nails almost every one of sailors buys.
The ceiling sits at about 2.1 million Bitcoin, roughly 10% of
all the Bitcoin that will ever exist.
The inflection point, the steepest part of the curve where
accumulation moves fastest, hits in early 2027 and along the way
strategy crosses 1,000,000 bitcoins sometime around
Thanksgiving of this year. Five years out, the curve has
them just under 2 million coins. So the fastest accumulation
phase is right now through 2028. Now keep in mind this isn't a
forecast, it's a description of what's already happening.
The curve isn't imagining the future, it's tracing 107 buys
that already occurred. The future projection just falls
out of the math. Now Plan CS 10% ceiling is
slightly more aggressive than Sailor's own 5 to 7.5%.
So this is the bullish version. But the shape itself, the S
curve, comes straight from the data.
The shape is what matters. This is the Sailor curve.
And the math gets reinforced when you listen to who else is
saying it. Here's Samson Mao on Pete
Rizzo's podcast. Watch what he does to the idea
that exchanges have plenty of Bitcoin to sell.
He is kind of setting the floor for everything.
So his average cost is seven, $75,577 per BTC and with this
recent downturn in the market, he's been able to average down,
which is really insane when you think about it.
The biggest holder, the biggest single holder entity of Bitcoin
is able to average down and I think even other treasury
companies like Metaplan are averaging down.
So you kind of have to think that this is an anomaly.
It's these are buyers of last resort.
They will always buy Bitcoin. They're price insensitive.
They will always buy even if it's 500,000 a coin or 700,000 a
coin, but people right now are willing to sell them Bitcoin for
60 thousand $70,000, which let's them average down.
And I just don't think it's sustainable.
And you couple that with like BSTR from Adam Back, they are
probably going to de spec in the next month or so and they have
$1.5 billion of capital to to deploy and then they're going to
be running similar strategies as strategy to accumulate.
So if you look at the landscape, there is just not a lot of room
to wiggle. If you think back to say six
months ago, it doesn't seem to happen now, but every time
Sailor would announce a buy, we will see a dip, right.
And recent days, I think it's because of sustained buy
pressure from STRC sales, but we don't see that dip anymore.
He announces we bought and we're still steady at the 74,000
something mark. But if you think about it, you
know, even if there is the sailor dip after he announces
and we go down a bit, then maybe BSTR will buy that day too.
And then the next day it's Metaplanet.
And there's only so many days in the week.
And there will be more Bitcoin treasury companies popping up
too. So I just think the supply shock
is really inevitable. And the the amount of Bitcoin
available is actually lower than most people think.
People think there's, you know, 2-3 million coins on exchanges
ready for sale, but those are not coins that are meant for
sale. That is liquidity.
That's market makers and trading firms and hedge funds using that
Bitcoin on exchange to perform other activities.
And it is not meant to be just sold and never bought back.
Two things worth double clicking on buyers of last resort.
Price insensitive. That's the operative phrase.
Sailor will buy at $70,000. He'll buy at $700,000.
The price doesn't change his behavior, and the other Treasury
companies are running the same playbook.
Second, the two or three million coins sitting on exchanges
aren't actually for sale. That's working capital for
trading firms and hedge funds. The real liquid float is a
fraction of that, and it's shrinking every quarter.
Strategy alone is buying multiples of mine supply every
week. The ETFs are doing the same.
The buyers are absorbing more Bitcoin than is being created.
That math just doesn't hold forever.
Now, the engine funding all these sailor buys is a preferred
stock product called STRCI. Did a deep dive on that one last
week, so check out that video if you haven't already.
For today, just know it's real, it's growing fast, and it's
converting capital that was sitting in Fiat into Bitcoin
demand at a rate that didn't exist in any prior cycle.
Now listen to what Mike Novogratz says about what's
actually driving Bitcoin right now.
No, you know, Bitcoin is interesting.
US retail has come back period, end of story.
And you see it through the ETETS, but mostly you see it
through micro strategy. Sailor, the Wizard of micro
strategy, Michael Saylor is back and he is selling stock and he
is selling perpetuals and he is buying Bitcoin and his premium
is expanding, not contracting. What it means by now you're 130
times NAV, his M NAV is 130 relative to the Bitcoin he owns.
And so he can sell micro strategy and make money, you
know, create yield as he says for his investors.
He dilutes his new investors, current investors and, and
dilutes his new investors and, and and it's a creative to new
investor to old investors. And so it's a, a strategy that
he has almost, he's almost the only guy that actually has this
strategy built in. You know, he had all these other
dats that tried it. They all traded discounts.
But but Michael has managed to create this cult of people that
trust him and, and that by micro strategy as their Bitcoin proxy,
they buy it as micro strategy and it's working.
And that is, I mean, he bought 2 1/2 billion dollars of Bitcoin
last. There's not enough supply to eat
up a billion a month from my a billion a week from Michael
Schaller. The bears can argue about
timing, but the math is settled. So back to the bears for a
second. When you trade Bitcoin with
leverage, you're not trading actual Bitcoin.
You're trading a contract called a perpetual future.
To keep that contract tracking spot, exchanges run a small
payment between longs and shorts every 8 hours.
If there's more longs than shorts, then longs pay shorts.
If there's more shorts than longs, then shorts pay longs.
Right now shorts are paying longs at the most negative rate
in bitcoins entire history and we've been negative for 46 days
straight. So many bears are piling in that
they're bleeding about 5% annualized just to hold the
position open. This is people paying interest
to bet against Bitcoin while Sailor is buying multiples of
mine supply every week. So why would one do this?
Presumably because they believe the four year cycle script.
They think another leg lower is coming on schedule.
The leverage is cheap, the conviction's high, the cycle's
paid off 4 times in a row. So they pile in and every day
they bleed. Jeff Park posted the funding
rates chart yesterday and said quote, I would not want to be
short Bitcoin here. I agree, I wouldn't either.
This is the cleanest setup for a short squeeze we've had all
cycle. The biggest buyer in history
absorbing supply daily shorts, paying record premiums.
On the other side, a derivatives market five times the size of
spot. When sentiment flips, the move
is going to be violent. Which brings us to sailors.
Read on the same dynamic. I think that the price action is
choppy and sideways and, and you know, when you talk to people,
they say the market's really being driven in the near term by
the derivatives traders. And you know, the derivatives
market, the perpetuals is 5X bigger than the spot market.
And so if a guy wants to put a billion dollars up and go 50X
leverage short or 50X levered long, then that trader controls
the price for the day because it's a lot of leverage.
And you know, it's a global market and 80, you know, people
talk, they, they like to talk about the corporations, but at
the end of the day, 85% of the Bitcoin is held by not
corporations. Nobody knows who owns it.
And those crypto native O GS, they're using the crypto
exchanges and crypto derivatives to get liquidity.
And so you got $1.7 trillion worth of people with capital
that could lever it 10 or 20 to 1 and they decide what they're
going to do, you know, above my pay grade.
I think at some point, you know, the, the general sentiment will
flip from being short to being long and we'll have a face
ripping rally. NI just can't tell you when.
Sailor says it as cleanly as anyone can.
The derivatives market is five times the size of spot.
One whale with a billion dollars and 50X leverage runs the price
for the day. That's the market we're in.
And right now it's full of shorts paying record premiums to
short an asset whose biggest buyer just won't stop buying.
Nobody can tell us when sentiment flips, but Sailor
keeps buying through it. And when those shorts get
squeezed and the supply isn't there to give them an exit,
that's the face ripping rally he's describing.
And he's describing it because he's the one quietly engineering
the floor underneath it. Now let's talk about the four
year cycle dogma. For 15 years, the halving cycle
has run. Bitcoin halving compresses,
supply narrative builds, retail piles in, euphoric blow off top
occurs, and then an 80% drawdown.
Repeat. Honestly, I thought the cycle
was already broken six months ago.
Clearly I was wrong about the timing.
Price dumped right on the calendar, everyone was watching
and many people got caught flat footed.
So why did the dump come right on schedule?
Was that the cycle working or was that everyone front running
a move that no longer has structural force behind it?
Because if it was self fulfilling, that's not the
cycle. That's just human expectations
clearing themselves out, and the Halving's actual supply impact
today is essentially nothing. Bitcoin mines about 450 coins a
day. Sailor bought 3273 just last
week. Whatever is left of the four
year cycle is psychological, not structural, and it's fighting a
market that's been different from day one.
I mean just look at the receipts.
This was the first cycle to hit an all time high before the
halving, The first with spot ETFs absorbing retail demand on
the way up, and the first with a public corporation passing the
largest spot ETF and Bitcoin held.
The bears are running 2017 plays against a 2026 market.
And I get it. The pull to treat it like every
cycle before it is real. We've been trained for it.
Every cycle ended with a Cliff. So we wait.
We sit on cash, we tell ourselves we'll buy lower.
But this time the supply isn't there.
The shorts are at historic extremes and when that breaks,
you don't get time to reposition.
I argue the four year cycle isn't gone, but it's being
absorbed by something much bigger.
I think the Sailor curve is the new cycle.
And here's the kicker, as Sailors accumulation curve
approaches it's ceiling, the price has to do something
violent. Just run the math.
Strategy is at 3.9% of all Bitcoin.
Sailor says 5% triggers $1,000,000 a coin, 7.5% triggers
10 million. He's already 80% of the way to
the first number. So either Sailor wildly
overestimated his own price impact and you can keep buying
without the price responding, or Bitcoin's going to do what
Bitcoin loves to do, sit quietly, bore you to death, and
then suddenly and violently reprice.
Because the curve is constrained, Sailor cannot keep
buying at $76,000 forever. Eventually the price has to move
up and clear the supply. So either it grinds higher into
the buyer, or it gaps higher when the leverage breaks and the
float disappears. That's the dynamic plan C's
chart is showing us without saying it.
Sailor's accumulation S curve is determining the price.
As the top of his curve approaches, the steep part of
the price curve has to follow the two curves.
Stack his accumulation peaks and the price S curves up.
That is the new cycle. And this only works with
Bitcoin. No other asset has a fixed
supply. Draw this curve against the
dollar. They print more gold.
They mine more stocks, they issue more shares.
Bitcoin's the first asset in history where demand meets a
truly fixed supply, and the result is a clean, predictable
curve. It's not magic, it's physics,
and that's what Sailor means when he says Bitcoin is
exponentially hardening. So put it all together.
The Sailor curve is in the steepest part of its
accumulation phase. Strategy is absorbing supply
daily shorts are at historic extremes.
A derivatives market five times the size of spot, a supply shock
everyone's been waiting for hasn't even started yet.
It's been delayed by leverage and leverage is finite.
But now I want to hear from you. Do you think the four year cycle
is dead, dying, or still running this market?
Where does Sailor actually top out 5 percent, 7.5 percent, 10%?
If Bitcoin finishes 2026 in the green, does that settle the
cycle debate or do the Cycle Bros get one more shot?
Leave your thoughts in the comments below.
And if this episode helps see what's happening underneath the
price hit like share it with somebody who's still waiting for
that next leg lower. And don't forget to subscribe to
the Simply Bitcoin channel so you don't miss the next one.
Thanks for watching and we'll see you Thursday.