The Breakdown - Why This Crypto Bull Run Feels Different

Episode Date: July 16, 2025

Crypto analysts are calling it early: this isn’t just another speculative bull market. In today’s episode, NLW breaks down why institutions, not retail, are driving the current rally, and what makes this cycle categorically different. From Bernstein’s $200K Bitcoin target to Wintermute’s data on diverging investor behavior, this episode dives into the macro conditions, institutional sentiment, and evolving narratives transforming Bitcoin into a full-fledged hedge against fiscal instability. Plus, Coinbase’s surge, Grayscale’s IPO ambitions, and why even Peter Schiff is revising his bearish forecasts. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Tuesday, July 15th, and today we are talking about predictions for a long and exhausting crypto bull market. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. Well, friends, Bernstein believes that we are in for a long and exhausting crypto bull market. After the weekends push higher, bullish research notes are flooding in boxes. Investment Bank Bernstein wrote on Monday that with institutions rather than retail driving

the price action, quote, our conviction in blockchain and digital assets has never been higher. They noted that this cycle is about conviction bets on emerging tech rather than a speculative mania. Stable coins are nearing $250 billion in market cap while crypto walleted. adoption is around 50 million. They expect both figures to grow sharply as the digital financial system forms. The main point of the note was that this is a categorically different bull run with analysts writing, it's easy to dismiss the current cycle as yet another crypto bull market,

another 2021. And you may call us believers, but we suspect we may have crossed the belief stage. We're seeing on-ground adoption and widespread integration with the traditional financial system backed by regulation. You may want to err on the side of our belief this time. Now, another way this bull run is different is the macro focus. While the first half of the cycle was driven by speculation around the first crypto presidency, the current surge is closely tied to macro conditions and policy. Charlie Belello, the chief market strategist of creative planning investor, noted that gold and Bitcoin are the two top performing assets this year. That has never happened before. Although gold was strong enough to beat the S&P 500 last year, U.S. growth stocks were stronger.

The previous best year for gold was in 2020, but the NASDAQ almost doubled its returns. Bitcoin, of course, has regularly put up 100% or more annual gains. gains across multiple cycles. It's typically the top-performing asset class or the worst with very little in between. Markisthelian of 10x research also reflected on why this cycle is different. Writing on Monday, he argued, this rally isn't driven by hype. It's fueled by something far deeper. He continued, the narrative is completely shifted. No one is talking about blockchain use cases or Bitcoin's technological promise anymore. Bitcoin has become a macro asset, a hedge against unchecked deficit spending. Now, this is not a new narrative, but widespread buy-in is a new phenomenon.

During the 2020 run-up, we had Paul Tudor Jones pounding the table, saying that Bitcoin is the fastest horse in the race as money printers spun up. Still, if that helped get the cycle going, most of the demand, ultimately, was from retail traders caught up in speculative mania. Calls from relatives weren't about deficit spending. They were simply about the price shooting up. This time feels different. Gen Z financial influencers are tuned into currency debasement as a problem, and the major flows are being driven by institutional investors looking for macro hedges. Thelian argued that this crypto rally is, quote, a direct response to a U.S. U.S. fiscal landscape unraveling far quicker than expected. Alongside gold, Bitcoin is now positioned

as the primary defense against a looming fiscal crisis, and that crisis is rapidly intensifying. One of the big discontinuities in this rally has been Bitcoin rallying alone. Gold has been range-bound since April, and although stocks are nearing all-time highs, their correlation to Bitcoin is breaking down. Both the NASDAQ and the S&P 500 were basically flat on Monday, failing to react to Bitcoin's weekend rally. Eugene Chung, the CCO of Crypto Platform OSL, said, crypto remains resilient despite stock market volatility from geopolitical tensions and tariff concerns. That's a growing narrative, with corporate profits exposed to economic conditions in a way Bitcoin simply isn't. Over the years, critics have argued that Bitcoin has no cash flows and no intrinsic value,

somehow making it lesser than stocks. Now, with cash flows under threats from tariffs, Bitcoin's role as a pure macro hedge is coming to the fore. Alongside the strategic notes, we're also starting to see a flood of updated price targets as Bitcoin surges. Bernstein reiterated their $200,000 target for this cycle's top, which they believe will come late this year or early next year. T.D. Cowan is a little more conservative, giving a $155,000 upside price target for December. Their base case is $128,000, while their downside scenario has Bitcoin dropping to $55,000. Now, we typically don't take these price targets too seriously on their face, but they're useful to gauge where the analysts are as the cycle continues.

Bitcoin is already closing in on T.D. Cowan's base case, which would be the worst one-year return for Bitcoin in a bull market since 2015. If Bitcoin managed to replicate its 2021, performance of 66% gains for the year, it would reach Cowan's upside price target of 155,000. Now, 2021 saw a blow off top and significant retrace before the year closed, so that could be a reasonable late cycle scenario. Still, there are bare cases even more telling. In the scenario where things go badly and the wind gets sucked out of markets, they only see Bitcoin falling to 55,000, that is, only barely below the previous cycle highs. In other words, to put a fine point on this, no one with any level of credibility is still calling for Bitcoin to go to zero. And even getting back

into the 60K range where we were just a year ago is pretty unthinkable to most. It's not hard to find a million-dollar Bitcoin prediction, but even the long-term critics are capitulating. Peter Schiff spent all day yesterday arguing on CT, which is just a fantastic use of time, in response to Watcher Guru pulling up a tweet from 2019, where he said Bitcoin would never reach 100,000, Schiff posted. Clearly, I underestimated the ability of Crypto Wales to buy off politicians. But I will reverse that prediction. Bitcoin will go to 100,000. So even Peter Schiff is only willing to call for Bitcoin to drop back to levels that were unimaginable not too long ago. Today's episode of The Breakdown is brought to you exclusively by

Grayscale. Grayscale is almost certainly a name you know. They've been offering exposure to crypto for over a decade now and offer over 20 different crypto investment products ranging from single asset to diversified to thematic exposure to crypto and the broader crypto industry. They have long been innovators at the intersection of TradFi and Crypto, and one of the benefits for a lot of us is that grayscale products are available right through your existing brokerage or IRA. Now, of course, investing involves risk, including possible loss of principle. For more information and important disclosures, visit grayscale.com. Go to grayscale.com to explore their full suite of crypto investment products and invest

in your share of the future. Marketmaker Wintermute is taking stock of the first half of the year and noticed a huge shift in retail trading behavior from previous cycles. In a new report, they noted that institutions are doubling down on major cryptocurrencies like Bitcoin and Ethereum, while retail traders are going way out on the risk spectrum to bet on meme coins and all coins. That's no surprise to anyone that's been following this cycle, but still a major divergence from the last bull run. We all remember that last cycle as being about the run-up in NFTs. That's not really inaccurate memory. NFTs were largely a crypto-insider phenomenon that spilled out into the mainstream after Bitcoin

already topped. During the run-up, retail traders were buying majors like Bitcoin and Ethereum hand over fist. A huge part of retail participation was buying majors and depositing them in the ill-fated crypto lenders. Putting some numbers to the shift, Wintermute noted that retail allocation to majors has dropped by nine percentage points this year to 37% of the average portfolio. By contrast, institutions which include crypto funds now have a 67% allocation to majors. The 30-point divergence between the two cohorts is the widest in industry history. Wintermute's CEO of Gennie Gayevoi said, The divergence isn't a temporary thing. It's a sign that we are experiencing a more

mature, sophisticated, and specialized crypto market. Investors are no longer chasing the same trend. Institutions are treating crypto as a macro asset, while retail traders continue to gravitate towards innovation, which is certainly one way to describe having a huge allocation to meme coins. One of the big changes that Wintermuter tracking is institutions shifting to derivatives instead of all coins as their source of leverage. In previous cycles, all coins were seen as a proxy for levered exposure to the network token. For example, if you wanted to lever up a bet on Ethereum, you might buy a basket of defy. Those correlations, though, have completely broken down this cycle. Instead, institutions are moving to options and other derivatives

to express their leveraged bets. Wintermute reported that the market for OTC options has soared by 412% this year. OTC spot market volumes also grew at twice the pace of centralized exchanges, reinforcing that this cycle is all about institutional adoption and an increased desire to keep large trades out of public view. Monday's trading session saw Coinbase surge on the back of roaring crypto markets. The stock hit a new all-time high daily close of 398 and reached the milestone of 100 billion in market cap for the first time. Coinbase has been a strong performer throughout this cycle, but that's due in part to a gigantic drawdown during the crypto winter. It IPOed at 381 in April 2021, marking the first peak of that cycle. The first day of trading saw the stock pop to 429 before

struggling for the rest of the bull run. The winter beginning in late 2020 caused Coinbase to collapse all the way down, bottoming out at $31 in the first week of 2023. After more than four long years, Coinbase is finally back above its IPO price. Helped tremendously by a 50% rise over the past month as Bitcoin surged. Meanwhile, speaking of crypto companies in public markets, the latest crypto company looking to IPO is Grayscale. They join a growing list of firms looking to take advantage of the current IPO window, with traders still extremely positive about public crypto companies. Although Circle is down dramatically from their all-time high, the stock is still up more than 3x from their opening trade. On Monday, Grayscale filed documentation with the SEC under a new

confidentiality clause that allows financials to remain private until closer to the IPO. The filing also didn't disclose when they're aiming to list, so the first first thing, first day of trading could still be a few months out. An IPO would mark the culmination of a very busy few years for Grayscale with the firm bouncing back from a tumultuous bare market. Grayscale went to court to fight for the Bitcoin ETFs, ultimately forcing the SEC's hand and enabling the most successful ETF products of all time. The first year of trading was rough for Grayscale with a huge volume of funds switching over to competitors. However, that dynamic has long since ended and Grayscale has stabilized as the third most popular Bitcoin ETF with around 5% of daily trading volume.

Now, they're seeking to convert a wide variety of their private crypto trusts into ETFs, including their large-cap index fund where they hope to be first to market. Alongside exchanges and infrastructure companies looking to IPO this year, Grayscale would be an interesting addition to the market. They could present the cleanest way to get exposure to institutional demand via rising interest in crypto ETFs. Now, one company that missed the entire Bitcoin bull run, but it managed to build up a huge amount of indirect exposure, is Vanguard.

One of the big stories around the launch of the Bitcoin ETFs was that Vanguard, one of the largest providers of index funds and retirement accounts would be sitting it out. Not only did they skip issuing their own Bitcoin ETFs, they also blocked clients from buying rival products under the guise of investor protection. Then CEO Tim Buckley, who has since resigned, said that Bitcoin was too speculative in that it's, quote, really tough to think about how it belongs in a long-term portfolio. Fund manager James Levish tweeted, Thus far, Vanguard has quote-unquote protected its clients from 160% gains since the Bitcoin's spot ETFs were announced last year. Now Bloomberg notes that Vanguard has

become the largest shareholder in Microstrategy on behalf of their clients. Vanguard owns around 8% of the company through its funds. These holdings were boosted by Micro Strategy getting added to the NASDAQ late last year. The firm is now the 37th largest company in the index, so every NASDAQ index fund has around a 0.4% allocation to them. Vanguard has decided to exclude crypto companies out of their thematic ETFs and global exposure funds, so these holdings are almost entirely due to index inclusion. Bloomberg ETF analyst Eric Balcunas, who also wrote the book on Vanguard Pioneering index strategy commented, God has a sense of humor. Vanguard chose this life. When you have an index fund, you have to own all the stocks for better or worse, and that includes stocks you may not like or approve of

personally. Still, despite the open hostility, Balcunas believes that the Vanguard way is actually closely aligned to Bitcoin or ethos, adding, I do find the Hodler mentality that Saylor has, he says he'll never sell his Bitcoin, very Vanguardian, being totally committed, that's a very vanguardian mindset. Now, that is the market side of the story. As we know, we've got Crypto week coming up this week, and so we will be back with more focus on that, plus some macro news around inflation. For now, though, that's the story from where we're sitting. Appreciate you listening, as always, and until next time, be safe and take care of each other. Peace.