Is the Bitcoin 4-Year Cycle Dead? (Here’s What’s Actually Happening)

Welcome back to the Wealth Shift by Ben and Bergs. The Go to playbook for busy investors building real wealth in the digital era. I'm Ben Simpson, a high school dropout turned eight figure entrepreneur, investor and founder of Collective Shift, a global research crypto platform. With clients around the world. And Aaron Berg Huber, an mba, qualified financially free investor and business leader. We dive deep into the strategy shaping the next generation of wealth builders today. Oh, and together. Sorry, we are back. Exact four frameworks used by sophisticated investors to grow and protect wealth across crypto, business property and macro markets with zero fluff, hype or jargon. Whether you're managing a hundred thousand dollar portfolio or 5 million plus, the wealth shift delivers timeless strategies, investor psychology and actual insights for those serious about playing the long game. This podcast is your playbook for building wealth in the digital era. We release episodes each and every week breaking down exactly how investors are growing and protecting wealth right now. Hit subscribe so you don't miss out on what's next to come on YouTube or follow us on the podcasting app. And today we're talking about the four year crypto cycle. Is it done? Is it breaking down? The market isn't looking like it's driven by halvings anymore. Ultimately we have an insight or a thesis as to what's actually happening based on global liquidity, macro conditions and institutional flows. And today we're going to be explaining why under this new structure how investors should be positioning ready for what's coming up. Because burgs people are frustrated, you know, people are concerned that the cycle is ending, you know, at the moment and we are seeing high levels of fear based in the market because this cycle is not playing out in contrast to previous cycles. So for those that you know, our listeners at home that have been in crypto for a long time, you will know that this cycle isn't playing out the same. In fact, you know, bitcoin is really, you know, this year, this calendar year only up I think 16% or 17% to date. And a lot of the altcoins, if you look at the others market return on average was essentially the altcoin market cap return for the last 12 months. In a similar period, altcoins are down 25%. So there's very few altcoins are outperforming. We haven't seen an altcoin season. Most altcoins aren't even above their previous all time highs. And you know, people are, people are frustrating concerns. We're going to break that down today.

Absolutely. People are Freaking out. They're thinking about 2017, 2021. Where's my giant euphoria? Where's the giant ICO boom or NFTs? We're all in discords and we're all going to make it. And everyone's quitting their jobs, Everyone's a multimillionaire on their little exchange app. What on earth is happening? Why don't we have that massive euphoria? Where is the four year cycle? Is it all going to zero? And we're breaking that down today, mate. Why don't you kick us off?

Well, I think the biggest thing for me is that this cycle is not led by retail investors. We look back in the last 3 bull markets, 2017, 2021 and 2014. So going right back to the previous 2013, we have always been led by retail investors. Right? Retail investors coming in, coming on a spot exchange, buying a bunch of bitcoin and then rotating profits into altcoins. We're not seeing that this cycle, this is institutional money that is leading this cycle. It's ETF funds, sovereign funds, the US Government. We're seeing market behavior shifting towards Bitcoin being a wealth preserving asset that people want to hold to offset against inflation, you know, US dollar devaluation. And it is in line with so many macro factors that are, you know, are at play. What we're not seeing is retail investors getting interested in this market because there's not a lot of liquidity. We've been in a period of quantitative tightening for so, or essentially there's been a lot of like, you know, liquidity extracted out of the market. It was only recently that we've heard that there will be ending quantitative tightening. That's going to be as of, I believe the start of November or start of December, I can't quite remember, but they announced that recently.

But you know, we haven't seen really altcoin expansion in previous cycles until there's been, you know, months after quantitative tightenings ended or quantitative easing has started. And we haven't been in that period for a long time. So retail sentiment is down and people are getting frustrated because gold's been on this crazy, crazy run. Stock markets are ripping higher and people's altcoins are not performing. So you've got to look through that. You've got to look through and that's what we do at collective shift. And one of the things that we found is that there are altcoins that are outperforming, but you've gotta be extremely selective. The ones that we've done really well on are the layer ones. Hyper liquid's been a great trade for us. It's been up 120% this year, while the remainder of a lot of the old coins from last year are not doing anywhere near as well. And we actually cut a lot of the old coins our portfolio earlier this year because of that fact. And I went back and back tested the trade that I made where I cut a lot of the gaming coins, AI projects that were in my portfolio back in February that were down 20, 25%. Earlier this year I rotated that to hyper liquid because I believe that the layer one sector was going to have the most attention. Hyper liquids up 120% since then. And those coins that I sold on average are down a further 60%. So the opportunity cost of you guys listening at home holding those coins that are not performing or even outperforming bitcoin, you should be questioning why you hold them because this cycle is playing out very differently.

You're very good at that, taking that action. And I like what you said about the other bull markets being retail led. So if I think about my mates that I would put in the retail category, not one of them has asked me about crypto. Occasionally be like, oh, how's it going with crypto? How's your work going? And previously in 17 and 21 they'd be like, what do I buy? I've got my app, how much do I put in? And I put that down to really macro, the macro environment. So back then you're in a zero interest rate environment. Okay. So things existed that shouldn't have and now they're blown up. People had a lot more discretionary income. It was just amazing. And now these mates are more concerned with can I pay my bills at the end of the month. They're not even thinking about investing in crypto.

Correct, Correct. And where I'm seeing most new investors come to the space right now. And we, you know, we're just in Miami last week for our, our platinum in person strategy day. The clients that we have now coming to to us and working with us are looking at bitcoin and crypto because they're being in real estate, they've been in stock markets, they've been in other assets and they're not getting the return they want. So those folks are coming and going. This is amazing. We're getting 40 to 50% a year. Unreal. The existing OG crypto investors are getting frustrated, panicked, you know, worried and making all these huss and fuss, blaming things and blaming the world and all this sort of nonsense. And if you look between the noise, what's actually happening? Well, the four year cycle is losing its power. Why? Well, it's primarily driven off macro liquidity. Crypto does not live in its own bubble. People think that it does. But crypto is amongst a much larger financial market that is driven on global liquidity like M2 money supply. It's driven off interest rates. We just had an interest rate cut recently. Gold has been on a huge run. And if you look at the, the an overlay of the gold chart on 188 day lag to Bitcoin, it is so correlated around six months after Bitcoin tops out, bitcoin starts to really rally and then you have to.

Gold tops out. Bitcoin starts to rally.

Sorry, yeah, when, sorry, when bitcoin starts to top out. So when gold starts to top out, bitcoin rallies and it follows the gold chart on about 188 day lag. So, you know, we're seeing so many different indicators like that setting crypto up for a fifth year if we were to still think about cycles. But so much fear is in the market because everyone believes that the cycle is ending now. And when everyone believes something, it tends to always be the opposite of what everyone thinks.

Yeah, exactly. Right. It's like when everyone's standing on one side of the boat, starts to tip.

Yeah, exactly.

And I like what you said as well about people looking at altcoins and I think it was Chris from Wealth Squad, he was saying, hey, there's this big orange boat there, this bitcoin and it is a lifeboat. But imagine it's a massive cruise ship and you're getting on there and you're cruising along at 30% minimum per annum. Right? That is your new hurdle rate. And the longer time that you're standing on the shore that you don't have bitcoin, the further and further that's going to get away and the harder it's going to be to get that bitcoin. Once you're on the ship and you're on the orange boat, just chill out, just do whatever you want to do, relax. But then you've got people where, like you were saying, they want to heavily chase altcoins. And like you were saying, they will hold onto the different, the wrong ones, they will not cut them, they will not go with the current narrative, they will not adjust to market conditions. And he said basically they're just getting off the boat, going on jet skis, going on A little adventure. Half of them crash or never come back.

Yeah.

So you need to be aware of where you are in the cycle and be, take action and be very methodical in what you're doing.

A hundred percent. Yeah. And I think people forget that, you know, markets are forward looking. I was saying this to our platinum clients the other day. I did a voice message to everyone to kind of remind people that markets are forward looking. The market prices in things it knows. So when events happen, the reason why usually it's that whole like buy the rumor, sell the news is because once the event happens, there's nothing driving a catalyst anymore. And that's usually marking a local top. For example, if we go back to 20, 21, what was the top of dogecoin? The minute Elon Musk walked out to Saturday Night Live to announce it, you know, and promote Dogecoin was the absolute cycle top of dogecoin. All right. And if you, you look at, you know, when Trump was inaugurated, top of the market. If you look at so many instances where people are working towards a big event, they thinking that's going to be the big catalyst, that's already, it's already bought into the price. Markets are forward looking and that's what people need to remember.

Yeah. And there was like 98% surety on like Polymarket and even like sports bet and stuff. There'd be a rate cut and there was. And think about what actually happens. You got 98% generally. Sure. There's a 2% chance it won't happen. You're going to price all your action leading up to that event. When the event happens, you're like, great, it happened. Like you've already done all of your action. Nothing magical is going to happen after that. But if you miss that and let's say it's earnings for a specific stock or something and they're supposed to have, I don't know, let's say 20% and they miss it and they get 18 or no, it wasn't what we thought, oh, better take some action. But if it's on the money and it's 20%, it's like, great, that's already priced in. There's not going to be this big euphoric jump. It's like what we thought was going to happen has happened and will position correctly.

Exactly.

So let's look forward to the next event.

Correct. And that is where the opportunity. So investors and you guys listening at home, to really take advantage of crypto, you need to be accumulating during periods of fear. All right. It's very easy to say accumulate during fear sell when you forget, but it is literally that simple. All right, we need to focus and all of you listening at home, focus on the structure, not the sentiment of investors. If you follow the sentiment of investors, you will be a sheep for following the herd and that is why you continue to lose. Dips and accumulation periods are where multi year wealth is created. That's where I made all of my money. I took my bitcoin, my salary in Bitcoin for two years between 2018 and 2019 when everyone was extremely fearful and extremely, I guess, panicked that crypto was over. Did I know 100% was going to come back? No. Obviously it's a difficult time to buy, but that is the opportunity you've got to be a counter investor to everyone else.

Yeah. And if you're buying and you can withstand that pressure and you don't need that money and you're not worried about it, you have us and you're buying quality assets, of course you have infinite time to make that money so you don't have to worry about, oh, went 7% down this week. You can think in five years or 10 years, you can keep accumulating and that gives you such a wide berth to get this correct.

Yeah, yeah, spot on. And you made a point there. Both I want to double down on is like you need to be accumulating the right assets. I see so many people just doubling down on losing assets because they're bought into the cult, they're bought into the, the psychology of a certain industry or a certain token and you're just, you're buying that token because you are emotional. And I would argue if you're over allocating to a certain altcoin because you love it, you need to get out of the confirmation bias trap that you're in because you're most likely sitting at home right now searching for positive content about your token because you want to feel right. That is not the way to invest. You need independent viewpoints and you need people to disagree with you.

And also the Internet will shape that. So if you're searching that and you're only clicking on the positive things, your search will only give you positive things. So try to look at your investments objectively, see what's happening in the market and if it's changed, the structures change, macro conditions have changed, how does that affect your investments and would you still make that decision today? And you just need to accept that you made a decision, you're not going to get it right. 100% of the time. No one ever does. You're lucky if you get it right 60% of the time, but you keep going. It's an infinite game. And even at 60% given any a long period of time, you own everything in the world. That's just the way it works. Right? So get it right more times than you get it wrong. Cut those losers. Do not double down on them.

And just keep investing.

Yes, yes. Time in the market and have the capital on the sidelines to deploy strategically. I think we're in a very, you know, wide ranging accumulation period right now that we'll look back and go, wow, that was, you know, a great time to accumulate because people are fearful, people are listening to the noise and they're not seeing through and seeing the fundamentals right now. And the reality is the halving right now no longer drives the rhythm of the market. The four year cycle doesn't. It's liquidity. And each phase of previous bull markets and future bull markets align with monetary expansion and monetary policy. And that's where quantitative finding ends, quantitative easing starts. It usually all lines around when money flows. And you know, this crypto only cycle perspective I think is very short sighted and ultimately is driven by bigger macro driven financial cycles.

Exactly right. And man, I remember buying bitcoin at like 30k and I think a few weeks later it went down to like 18 or maybe a month later, whatever it was. And I thought, I've missed this, I've stuffed it up, my money's going to zero and I had no capital on the sidelines to deploy. And that would have been the perfect opportunity to average into bitcoin, get that average price down and build my bitcoin stack. That was a huge lesson for me, to not deploy all of your capital, always have some available and then if you're a bit skinned for capital, work on cash flow. So whether it's more income or through a business or cash flowing dividends, whatever it may be, rental property, whatever you can do to get more cash flow in your life. So you always have that coming in and you'll be able to deploy that against high quality assets.

Yes. And if you've bought at local tops or cycle tops and you're down a lot, you, ultimate goal is to try and lower your buy price. All right, so if you're listening to this podcast, you're going, okay, this is all great, but like, you know, I'm down a lot. We wrote a couple of options. One is you accumulate more and lower your buy price and Wait, you know, my biggest purchase was at $15,000 a Bitcoin and dropped to I think 4,000 or 5,000, you know, in the following days. Like it's a sickening feeling, I get it. But then you can reaccumulate, lower your buy price, or number two is you just hold on and you just wait until the market comes back. And the time in the market always beats trying to over trade. So, you know, I'd make sure that, you know, when thinking about where we are in the cycle, you know, know that we have a longer time frame to go in our opinion and we think the cycle is playing out and you just gotta be patient. And unfortunately people think that you're gonna come in and make millions overnight in crypto. It's not reality anymore. You've gotta be patient, you've gotta be strategic.

I heard something during the week and this guy said on a pod, at some point your bitcoin stack is just gonna be a screenshot because bitcoin is going to be so expensive in 10 years, 20 years that even if you put half a million dollars in, it's going to go up by 0.00001. It's like it's just not going to move the needle. And I don't think people realize how fast this is actually going to happen. Yeah, and it's something you need to be aware of to get on that orange boat or exposure to crypto in general because things are going to happen very, very fast.

Totally, totally. And there already are. And I think you've got to see through the noise. And you know, Apple follow this, this, this last 12 months is our crypto portfolio that our clients sort of follow and we share is I think up 60% or 62%. And ultimately that's because of the decisions we made of cutting the losers, not getting frustrated with the market. That doesn't, the market doesn't care about, you know, you guys listening at home. It doesn't care about me, doesn't care about Bergs. You've got to either jump on and enjoy the ride or, you know, or get off. And I, and I said that the other day to some of our members. Is you playing the victim game and playing that, you know, oh my goodness, you know, I'm not making enough Money. I'm down 7% this month. Is not. In what world do you think that's going to help you as an investor? You're just being childish and you're being emotional and it's not going to help. You need to Cut the crap and play the game.

It puts you in the wrong mind frame where, oh my God, these bad things happened instead of, okay, how can we take advantage of this? How can we make it better? And it's like you're just swimming upstream in a river, I guess these huge rapids and you're just paddling and paddling and paddling. It's like, why not just let go and go with the stream? Why are you telling everyone this altcoin that I've been on for four or five years is going to go to the moon and clearly dying and you're a community member when you can just go with the altcoins that have momentum and get those gains? It's okay to be wrong if you are an investor and if you have been doing this for a while, you will be wrong hundreds of times. That is just the game. And honestly, the more you are wrong, the more you're actually going to be right. You're going to make better decisions, you're going to learn, you're going to make more right decisions. It's okay to cut your losses and say, I'm going to go put it in this other thing because that has momentum. I've seen the tide shift. This is now moving. I'm going to jump on that boat. That is totally fine and in fact is what you should be doing right.

I like that analogy. Stop fighting upstream and go with the water and then when the water turns, then turn the boat. Don't try and force the boat in the wrong direction at the wrong time. Don't fight the train.

You're going to burn out, you're going to get tired, you're going to get emotional, you're going to make poor decisions and the equivalent of that is you're going to burn through all your money and that you've worked very hard for. Just don't do it. Recognize where you're at, take a step back and then start to go with the strain.

Love it. Burgers. Let's end with that. If you listeners at home want to know exactly how smart, busy investors are growing their own crypto portfolios without wasting hours on charts trying to trade following influences or guesswork, we put together a free training in the link below. Check it out. It's our proven seven step system trusted by all of our high performing clients that are executives, business owners and serious investors trying to grow their wealth no matter where they are in the world. It's a video that breaks it all down, including how we work with our clients. Check it out in the link below. And if you enjoy this podcast, we release episodes each and every week, breaking down exactly how sophisticated investors are growing and protecting their wealth. Make sure you hit subscribe to not miss out on the next episode and we will hopefully see you very soon.

Thank you Bergs Thanks J.