Bitcoin traded near $72,000 on Thursday, holding above that threshold for the first time in about a month after a broad market rally lifted cryptocurrencies and related equities the previous day. The largest token by market capitalization jumped more than 6% on Wednesday, a rebound after weeks spent under $70,000.
Part of the move higher has coincided with renewed institutional interest. Spot Bitcoin exchange-traded funds registered roughly $1.1 billion in net inflows over three trading sessions from March 2 through March 4, based on compilations from ETF trackers including Farside Investors and CoinGlass. Those inflows reversed a stretch of outflows earlier in the year that had weighed on market sentiment.
On March 4 alone, spot Bitcoin ETFs recorded about $461.9 million in net inflows, with BlackRocks IBIT accounting for $306.6 million of that single-day total, according to CoinGlass data cited in market reporting. Despite the recent rebound, Bitcoin entered a five-month decline from October through February, its longest consecutive losing streak in years.
To assess the dynamics currently shaping Bitcoin, I spoke with Michael Terpin, a U.S. entrepreneur and investor who has been a prominent voice in the crypto community. Terpin, who has been characterized as an early thought leader in Bitcoin and crypto and was dubbed the "Godfather of Crypto" by CNBC for his advisory and marketing work on early industry projects, outlined why he expects further downside before a sustained recovery.
Macroeconomic and cycle drivers
On the influence of macroeconomic forces versus the protocol-level cycle, Terpin emphasized the dominant role of the halving-driven four-year cycle. He said: "The primary factor in the four-year cycle is the lingering effects of the halving. Every cycle to date, Bitcoin has acted in highly predictable ways - reaching a new all-time high within seven months after the halving, then popping that bubble within 11 months, which starts a slow, painful drop in price that capitulates about a year later."
He added that macro conditions have generally served to accelerate or trim the cycles peak, but have had limited impact on the eventual bottom. Terpin pointed to prior industry disruptions rooted in institutional overleverage as the typical triggers for bottoms, citing MtGOX in 2014 and FTX in 2022 as historical examples of events that produced capitulation.
Institutional flows and the ETF effect
Terpin observed that exchange-traded funds have behaved in some respects like early retail participants by selling near the market tops. However, he highlighted differences in composition and behavior among ETF holders: "ETFs have in part mimicked first-generation retail buyers in that they have tended to sell at the top, but there are also professional traders using ETFs for additional leverage and institutions like Harvard buying their Bitcoin in the form of ETFs, so there should not be a panic sell at the bottom the way there has always been with new retail."
Those institutional-assisted flows help explain the $1.1 billion in net inflows recorded across March 2-4 and the particularly large single-day contribution on March 4, when IBIT represented a sizable portion of the inflows.
Near-term outlook and expected path
Reflecting on Februarys 15% decline, which extended Bitcoins losing streak to five months, Terpin said that while March has historically produced intermittent up months following a bubble pop, the bottom has not yet been reached. He said: "The history of the four-year cycle has shown a similar pattern after the bubble pops, but it has had an up month in March in every other cycle, so its reasonable to expect that March (which has started with an upward move) to be positive."
Despite that possibility for a positive March, Terpin warned investors to prepare for additional weakness. He expects April to be another negative month and forecasts that the ultimate low for the current correction will be at least 60% below the bubble top, which he said would put Bitcoin around $50,000 at the point of capitulation.
Terpin also described a scenario in which particularly adverse macro or crypto-specific developments - for example, a major bankruptcy of a fund or exchange - could push the capitulation level down further, possibly toward $40,000 by early fall.
Longer-term trajectory
Looking beyond the immediate correction, Terpin sketched out a gradual recovery through the remainder of the year. He said the "path of least resistance is for lower lows until capitulation around $50k," and that while recovery will be slow, Bitcoin is unlikely to climb dramatically by year-end. He estimated a year-end trading range not much higher than $80,000 to $100,000.
Terpin framed the next material moves as dependent on a potential supply shock and renewed demand in a later bull market. He offered a range of possible outcomes if demand remains subdued versus if a fresh wave of FOMO appears in the next bull market, describing scenarios that could see Bitcoin eventually reach substantially higher levels over a multi-year horizon.
Implications for markets and investors
The recent flow data and Terpins commentary highlight the dual role that institutional products play: they can provide meaningful inflows that buoy prices in the near term, but they do not eliminate the structural cycle dynamics that have historically governed Bitcoins multi-year swings. For market participants, the tension lies between short-term momentum driven by ETF inflows and the longer-term corrective forces associated with the halving cycle and episodic institutional stress events.
Investors and market watchers should note that while ETF inflows have helped push prices higher in the short run, Terpins view suggests caution, with the possibility of further declines before a durable bottom is established.