Author: Daii Source: mirror

One ​​day in 2030, when BlackRock's Bitcoin ETF surpassed the S&P 500 Index Fund, Wall Street traders suddenly realized that the thing they once ridiculed as a "dark web toy" is now controlling the throat of global capital.

But all the twists began in 2025—that year, when the price of Bitcoin broke through $250,000 in the hunting of institutional whales, but no one could tell who it belonged to. On-chain data shows that more than 63% of the circulating supply is locked into institutional custody addresses, and the exchange's Bitcoin liquidity is exhausted to only support three-day trading volume.

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

A large amount of funds are continuing to flow out of Bitcoin ETFs, and Bitcoin once fell below 80,000. There are two main explanations of this phenomenon: First, it is Trump in the United States launching a tariff war; second, the capital side is because 56% of short-term holders - hedge funds - closed positions.

However, analysts believe that it is currently in the "distribution stage" of the Bitcoin bull market.

The "distribution phase" of the Bitcoin bull market usually refers to the fact that before and after the price peaks in the later stage of the bull market, the big investors ("whale") begin to sell their chips gradually, transferring Bitcoin from early holders to new investors entering the market. This stage means that the market will shift from a crazy rise to the top area, which is a key link in the bull and bear transformation.

If you don’t keep it a secret, give the answer first, the current market liquidity structure has changed.

OG retail investors and OG whales are playing the sellers; institutional whales and new retail investors entering the market through ETFs become the main buyers.

In the cryptocurrency field, "OG" is the abbreviation of "Original Gangster" (also often interpreted as "Old Guard"), which specifically refers to the earliest participants, pioneers or core groups that have been adhered to in the Bitcoin field for a long time.

In a word, old money is withdrawing, new money is entering. Institutions dominate the new money.

Below we will provide you with detailed analysis from the aspects of market structure, current cycle characteristics, institutional and retail investors' roles, cycle timelines, etc.

1. Typical market structure: whales distribute chips to retail investors at the end of the bull market. In the end of the bull market, whales distribute chips to retail investors, that is, early large holders sell coins at a high price to retail investors who enter the market.

In other words, retail investors often take over the market at high levels in a fanatic atmosphere, while "smart money" whales take the opportunity to ship in batches at high prices and realize profits. This process has been staged many times in the historical cycle:

For example, when the bull market approached its peak in 2017, the net decrease in the balance of Bitcoin held by whales, indicating that a large amount of chips were transferred from the whales. The reason was that a large amount of new demand poured into the market at that time, providing sufficient liquidity for whales to distribute their positions. See: The Shrimp Supply Sink: Revisiting the Distribution of Bitcoin Supply.

Overall, the market structure at the end of the traditional bull market can be summarized as: early large investors holding coins gradually sold, market supply increased, and retail investors bought a large number of buyers driven by FOMO sentiment (fear of missing out). This distribution behavior is often accompanied by signs such as increasing Bitcoin inflows on exchanges and moving old coins on chains, indicating that the market is about to reach its peak.

2. Characteristics of this bull market: new structural changes

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

2.1 An unprecedented institutional participation has been involved in this cycle

The launch of spot Bitcoin ETFs and the massive purchase of coins by listed companies have made the market participants more diverse, and it is no longer just retail investors to promote the market. The addition of institutional funds has brought about a deeper fund pool and more stable demand, which is directly reflected in the reduction of market volatility compared to the past - according to analysis, the maximum drawdown in the current bull market is significantly smaller than in the past cycle, and the high-point pullback usually does not exceed 25%-30%, which is attributed to the intervention of institutional funds that has stabilized the volatility.

At the same time, the market maturity is increasing, the price increase decreases cycle by cycle, and the trend is more stable. This can also be seen from indicators such as the growth rate of Realized Cap: this round of market capitalization has only expanded a small part of the previous peak, indicating that the fanaticism has not been fully released (see Thinking Ahead for details).

Realized Cap is an important indicator to measure the inflow of market capital. Unlike traditional market capitalization, the realized market capitalization is not simply multiplied by the current price by the circulating supply, but considering the price of each bitcoin at the last transaction on the chain. Therefore, it can better reflect the scale of the actual investment in the market.

2.2 Retail investors' behavior in this round is also more rational and diverse

On the one hand, senior retail investors (individual investors who have experienced many cycles) are relatively cautious and lock in profits earlier after a certain increase, which is different from the previous situation where retail investors chased to the top.

For example, data at the beginning of 2025 showed that small-scale coin holders (retail investors) were 1 In the month, the net transfer of about 6,000 BTC (about 625 million US dollars) to the exchange was launched and cashed out early, while the whales only had a small net inflow of about 1,000 BTC, basically remained unchanged. This divergence means that many retail investors believed that they had reached a peak in stages and chose to settle their profits, while the whales (that are regarded as "smart funds") remained unchanged, obviously looking forward to higher profit margins.

On the other hand, the enthusiasm of newly entered retail investors is still accumulating. Indicators such as Google Trends show that public attention fell and "reset" after the price hit a new high, and there has not yet been a peak of national fanaticism at the end of previous cycles. This implies that the current bull market may not have entered the final fanatic stage yet and the market's upward potential remains.

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

The last bull market in 2020-2021 was the first time that a large number of institutions and listed companies entered the market.During the cycle, whales were holding coins more often than not - new "big investors" such as institutions bought in large quantities, and Bitcoin flowed from retail investors to these whale accounts.

This trend continues in the current cycle: large institutions purchase Bitcoin through channels such as OTC over-the-counter markets, trust funds or ETFs, making traditional whales no longer a net seller, delaying the arrival of the distribution stage to a certain extent. This makes the distribution of this bull market more ease and diversified, rather than the past model of simply taking over by retail investors: the depth and breadth of the market are increased, and new funds are enough to digest the chips thrown by long-term holders.

Glassnode The report points out that a large amount of wealth has been or is shifting from long-term holders to new investors, a sign that the Bitcoin market will mature - long-term holders have achieved record profits (up to $2.1 billion in a single day), and new investors have enough demand to take over these sellers. For details, see Bitcoin sees wealth shift from long-term holders to new investors – Glassnode

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

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

As the evolution of market participants structure, the roles of institutions and retail investors in the distribution stage have also changed significantly.

CryptoQuant CEO Ki Young Ju summarized this round of distribution model as: "old-level" retail investors (OG retail investors) + original whale → new retail investors (through channels such as ETFs, MSTRs and other channels) + new whale (institution).

In other words, retail investors and whales that have experienced early cycles are gradually selling, and the takeover not only includes retail investors in the traditional sense, but also ordinary investors entering the market through investment tools such as ETFs, as well as new institutional funds that play the role of whales.

This diversified participation pattern and the traditional "whale → retail investors""The single-line distribution model is completely different.

In this cycle, OG retail investors (individual coin holders who entered the market in the early stage) may hold a considerable amount of Bitcoin. They choose to cash out and leave the market at a high stage of the bull market, providing the market with some selling pressure and liquidity.

Similarly, OG whales (early large players) will ship in batches and cash in profits of several or even dozens of times. Correspondingly, institutional whales, as a new buyer, absorbed these selling pressures in large quantities. They bought through channels such as custodial accounts and ETFs, and Bitcoin flowed from old wallets to custodial wallets of these institutions.

In addition, some traditional retail investors now hold bitcoin indirectly through ETFs and listed company stocks (such as MicroStrategy's stocks), which can be regarded as a new form of "retail investor takeover".

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

3.1 More Bitcoins are leaving the exchange

On the one hand, OG holders' selling behavior usually leaves obvious on-chain footprints: increasing changes in old wallets, large transfers flock to exchanges, etc.

For example, in this bull market, some long-term unmoved wallets are observed to be active, and transferring coins to the exchange for sale is a sign that old holders have begun to allocate chips. Ki Young Ju pointed out that the activities of OG players will be reflected through on-chain and exchange data, while the flow of "paper bitcoin" (such as ETF shares, Bitcoin-related stocks) will only be reflected as on-chain records of the custodial wallet at settlement. In other words, the purchase of institutional funds mostly occurs off-market or through custody, and the direct chain reflects the increase in the address balance of the custodian, rather than the direct flow of traditional exchanges.

The current exchange's Bitcoin balance is 2.22 million, which is also a reaction to this feature.

3.2 New whales and new retail investors are more resilient

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

Unlike the ones that were easily panic and stampede when retail investors dominated in the past, institutional funds are more inclined to buy at low prices and allocate them for a long time. When the market pulls back, the intervention of these professional funds can often support the bottom and stabilize the price. For example, some analysts pointed out that the reduction in volatility in this bull market is attributed to institutional participation: when retail investors sell, institutions are willing to take over to ensure market liquidity, so that the price retracement is much smaller than in the past.

Although the launch of Bitcoin ETFs has brought a large amount of incremental funds to the market, some ETF holders (such as hedge funds) may use arbitrage trading as their main purpose, so their funds are highly liquid. The recent large outflow of ETF funds shows that some institutional funds are only conducting short-term arbitrage rather than holding them completely for a long time. The pressure on Bitcoin’s recent decline below 80,000 comes from the closing of positions of hedge funds’ arbitrage strategies. However, new retail investors have shown strong resilience. They did not sell panic in each adjustment, but were willing to continue to hold. The short-term holder indicator of Bitcoin showed stronger resistance to declines.

In general, the interaction between OG retail investors + OG whale and new institutional whale + new retail investors has formed a unique supply and demand pattern in the current market: early holders provide liquidity, institutions and new buyers absorb chips, making the distribution process in the later stage of the bull market more stable and traceable.

4. Timeline of market cycle: historical trends and this bull market outlook

From historical data, the Bitcoin market presents a pattern of about four years and a cycle, each round includes a complete cycle of bear market-bull market-transition. This is highly correlated with the Bitcoin block reward halving event: after the halving occurs, the output of the new currency sharply declines, and a sharp price increase (bull market) will often occur in the next 12-18 months, and then enter a bear market adjustment near the high point.

4.1 History

Review the timelines of several major bull markets:

The first halving occurred at the end of 2012, after which the price of Bitcoin peaked in December 2013, about 13 months later;

The second halving in 2016, about 18 months later, the bull market peaked at nearly $20,000 in December 2017;

The third halving was in May 2020, and about 17-18 months later, at the end of 2021, Bitcoin experienced two highs (April and November) close to the $70,000 double peak.

From this, the fourth halving in April 2024 may trigger a new bull market, with its peak likely to occur within one to one and a half years after the halving, that is, about the second half of 2025, and the final distribution stage will usher in (the end of the bull market).

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

4.2 Optimism

Some analysts believe that the macro environment, regulation and market maturity will have an important 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 the medium-term stage of a new cycle. If the fundamentals (user adoption, macro environment, etc.) remain good, the bull market may continue until 2025 or even longer. They stressed that the newly launched spot Bitcoin ETFs have broadened the access channels for funds, and the bright future of the US regulatory environment (such as Trump's new potential impact) may further boost crypto market valuation.

This means that this bull market is expected to be longer than in the past cycle, and the rise may cross the traditional time window.

On the other hand, there are also views on-chain data that support a long bull market. For example, the growth of realized capital inflows in this cycle mentioned above has not yet reached half of the previous high, indicating that the market fanaticism 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 highs expected to be raised to $150,000 or even higher.

4.3 Conservative

However, there are also opinions that the vertex will appear within 2025.

CryptoQuant's Ki Young Ju predicts that the final distribution stage of the Bitcoin bull market (various OGs are heldSome and institutions will centrally ship the final takeover funds) will occur within 2025. His judgment is based on the early distribution phase that has entered and the observed influx of new retail funds, and believes that there is no need to turn short before the final shipment is completed.

Comprehensive historical models and current indicators, it can be inferred that this bull market is likely to come to an end in the second half of 2025. By then, as prices reach a temporary peak, all kinds of holders will accelerate the distribution of chips to complete the final distribution process.

Of course, the exact time and height are difficult to predict, but judging from the length of the cycle (about 1.5 years after halving) and market signs (retail crazy degree, institutional funding trends, etc.), 2025 may become a key year.

Conclusion

When Bitcoin transforms from geek toys into a trillion-level strategic asset, this bull market may reveal a cruel truth: the essence of the financial revolution is not to eliminate old money, but to reconstruct the genetic chain of global capital with new rules.

The "distribution stage" at this moment is actually the coronation ceremony of Wall Street's official takeover of the crypto world. When OG Whale handed over the chips to BlackRock, this is not a prelude to the collapse, but a march of the reconstruction of the global capital map - Bitcoin is evolving from the myth of retail investors to a "digital strategic reserve" on the institutional balance sheet.

The irony is that when retail investors are still calculating the "top escape password", the Blackstones have already written Bitcoin into the balance sheet template for 2030.

The ultimate question of 2025: Is this the pinnacle of cycle reincarnation, or is it the pain of the birth of a new financial order? The answer is hidden in the cold chain data - every OG wallet transfer record is contributing to BlackRock's hosting address; the net inflow of each ETF is rewriting the definition of "store of value".

A piece of advice for investors who travel through the cycle: the biggest risk is not to miss the opportunity, but to interpret the rules of the game in 2025 with the cognitive cognition of 2017. When the "coin holding address" becomes an "institutional custody account", when the "halving narrative" becomes a "derivative of Fed interest rate decisions", this century-long turn has long exceeded the scope of bull and bear.

History is always repeated, but what appears this time is not the tears of retail investors, but the never-ending on-chain transfers in the institutional vault.

This institutional trend may be analogous to the evolution of the Web1.0 era—the Internet, which originally belonged to geeks, eventually fell into the hands of giants FAANG

(Facebook, Apple, Amazon, Netflix and Google).

The cycle of history is always full of dark humor.