Bitcoin Market Cycles and Institutional Moves: Key Insights from Yusko and Mallers

Recently, the Bitcoin market has entered a critical observation period following a deep correction of about 51%. Multiple market participants note that the current cycle differs significantly from past crypto winters, and institutional accumulation behavior and market structure changes may provide new clues for future trends.

Yusko: Crypto Winter Could End by Early October

Mark Yusko believes the next major turning point for Bitcoin could come as early as October. He points out that the magnitude of this decline is notably smaller than historical cycles—previous bear markets saw Bitcoin fall 74% to 84% from its highs, while this pullback is about 51%. This difference implies that speculative perpetual futures leverage in the market has been largely flushed out, reducing the risk of further deep declines.

Yusko further explains that Bitcoin's current price is below its fair value calculated based on Metcalfe's Law. He sees this as a value investing window. Since February, he has been buying small amounts of Bitcoin weekly and plans to continue at least through October.

His timeline is fairly specific: this crypto winter could end around October 4 or 5, after which the market will enter a "Crypto Spring." However, he cautions that "spring" does not mean a straight-line price rise, but rather a slow climb amid volatility, with truly strong rallies likely only in the post-halving year of 2029.

Whale and Institutional Accumulation: On-chain Data Provides Support

On-chain data partly supports Yusko's accumulation thesis. In late July, large Bitcoin wallets bought about 40,000 BTC in just 9 days, worth approximately $2.66 billion. Although Bitcoin's price was still hovering around $63,000 in mid-August, this contrarian accumulation is noteworthy.

A broader trend is that corporate Bitcoin holdings continue to expand, with publicly traded companies collectively holding over 1 million BTC. This means that in this cycle, Bitcoin's holder structure is more institutionalized than ever, which could provide more stable long-term support for the market.

Global Stock Market Correction Could Be a Bitcoin Catalyst

Yusko puts forward a somewhat controversial hypothesis: if global stock markets experience a major correction in September or October, wiping out trillions of dollars, some capital could flow into safe-haven assets, triggering a significant Bitcoin rebound. He emphasizes that this scenario is not inevitable, but the probability is "quite high."

Contrary to conventional wisdom, he believes Bitcoin could be a beneficiary rather than a victim of stock market turmoil. The reason is that in past stock market crashes, the crypto market often plunged in tandem due to excessive leverage; but currently, the crypto market's leverage levels have been significantly reduced, and speculative bubbles have been largely cleared. Therefore, even if the stock market suffers a severe decline similar to 2000, 1929, or 1973, Bitcoin may exhibit safe-haven properties, akin to gold's historical role.

Of course, he does not rule out further declines in Bitcoin, believing a 10% to 20% pullback is still possible. But the key point is that if a severe stock market crisis occurs, Bitcoin may demonstrate a safe-haven function similar to gold for the first time.

Mallers: Bitcoin Is the Market That "Discovers Reality First"

Jack Mallers offers another perspective from the angle of market structure. He argues that Bitcoin is a truly free market, trading 24/7 with no centralized intermediary intervention, and therefore tends to reflect risks earlier than other assets.

He cites the example that the collapse of FTX in 2022 preceded the failure of Silicon Valley Bank, both exposing risk mismatches under monetary tightening. Bitcoin's price decline also preceded the stock market's adjustment.

Mallers further points out that Bitcoin may currently be pricing in software security risks brought by artificial intelligence (AI) ahead of time. AI models have significantly lowered the cost of discovering software vulnerabilities. For example, it is reported that Z.AI's GLM 5.3 model scored 84.5% on benchmarks for identifying software vulnerabilities. This means the entire software industry could face faster vulnerability exposure, and Bitcoin, as the freest market, is the first to feel this pressure.

However, Mallers believes this could ultimately become an advantage for Bitcoin: the earlier problems are exposed, the earlier they are fixed. Bitcoin's market structure allows it to discover and price real-world risks more quickly.

Comprehensive Outlook: Structural Changes Beneath Surface Weakness

Combining the views of Yusko and Mallers, the current Bitcoin market may be undergoing significant structural changes beneath the surface of price weakness. Yusko focuses on value and cycle positioning, while Mallers emphasizes the leading nature of market structure. Both point to a possibility: Bitcoin is preparing for the next phase of its cycle turning point.

On-chain data shows that large holders are increasing their positions, and institutional holdings continue to expand. If Yusko's timeline is correct, early October could mark the end of this correction, followed by a volatile but generally upward recovery period.

It should be noted that these views are personal judgments of market participants and do not constitute investment advice. The Bitcoin market remains highly uncertain, and investors should make prudent decisions based on their own risk tolerance.