2030 Retrospective on 2025: The Year Wall Street Officially Took Over Bitcoin

Original Title: "2030 Retrospective on 2025: The Year Wall Street Officially Took Over Bitcoin"

Original Author: Daii, Airdrop Reference Founder

On a day in 2030, when BlackRock's Bitcoin ETF surpassed the S&P 500 Index Fund in size, Wall Street traders suddenly realized: the thing that was once mocked by them as a "dark web toy" now controlled the global capital's throat.

But all the turning points started in 2025 — the year when the Bitcoin price broke through $250,000 in the institutional whale hunting, yet no one could clarify its ownership thereafter. On-chain data showed that over 63% of the circulating supply was locked in institutional custody addresses, and the Bitcoin liquidity on exchanges dried up enough to support only three days of trading volume.

The above is a fantasy; let's go back to the present for now.

A significant amount of funds continues to flow out of the Bitcoin ETF, causing Bitcoin to drop below $80,000 at one point. The explanation for this phenomenon mainly lies in two aspects:

1. On the policy side, it was due to the US under Trump initiating a trade war;
2. On the fund side, it was because 56% of short-term holders — hedge funds — closed their arbitrage strategies.

However, analysts believe that the current situation is in the "distribution phase" of the Bitcoin bull market.

The "distribution phase" of the Bitcoin bull market usually refers to the period around the peak price before the end of the bull market, where whales gradually sell off their chips to transfer Bitcoin from early holders to new market entrants. This phase signifies the shift from a frenzy of price surge towards the top area and is a key point in the bull-bear transition.

No more suspense; let's give you the answer first: the current market liquidity structure has changed.

- OG retail holders and OG whales are playing the role of sellers;
- Institutional whales and new retail entrants through ETFs are the primary buyers.

In the cryptocurrency field, "OG" is the abbreviation for "Original Gangster" (also often interpreted as "Old Guard"), specifically referring to the earliest participants, pioneers, or long-standing core group in the Bitcoin space.

In short, old money is exiting, and new money is entering. Among the new money, institutions are dominant.

Next, we will provide you with a detailed analysis from aspects such as market structure, current cycle characteristics, roles of institutions and retail investors, cycle timeline, etc.

1. Typical Market Structure: Whale Distribution to Retail at the End of a Bull Market

A typical Bitcoin bull market at its peak presents a pattern where whales distribute chips to retail investors, meaning early holders sell their coins to latecomer retail investors at high prices.

In other words, retail investors often buy in at high prices in a fervent atmosphere, while the "smart money" whales take advantage of this opportunity to sell in batches at highs, realizing profits. This process has played out multiple times in historical cycles:

For example, as the 2017 bull market approached its peak, whale-held Bitcoin balances decreased, indicating a large amount of chips moved away from whales. This was due to a massive influx of new demand at the time, providing enough liquidity for whales to distribute their holdings. For more information, see: The Shrimp Supply Sink: Revisiting the Distribution of Bitcoin Supply.

Overall, the market structure at the end of a traditional bull market can be summarized as follows: early coin-holding whales gradually sell off, increasing market supply, while retail investors buy in massively driven by FOMO (fear of missing out). This distribution behavior often accompanies signs such as increased Bitcoin inflow to exchanges, movement of old coins on-chain, indicating the market is about to peak and turn.

2. Characteristics of This Bull Market Cycle: Structural New Changes

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

2.1 Unprecedented Institutional Participation in This Cycle

The launch of Bitcoin spot ETFs and the large-scale Bitcoin purchases by publicly traded companies have diversified the market participants, no longer solely driven by retail investors. The entry of institutional funds has brought about a deeper liquidity pool and more stable demand, directly reflected in the reduced market volatility compared to the past. According to analysis, the maximum drawdown of the current bull market is significantly lower than in past cycles, with high point pullbacks usually not exceeding 25%-30%, attributed to institutional fund intervention calming the volatility.

Simultaneously, as the market matures, price increases have been decreasing with each cycle, leading to a more stable trend. This is evident in metrics such as Realized Cap growth: this cycle's Realized Cap has only expanded a small fraction of the previous peak, indicating that the frenzy has not yet fully dissipated (see: Thinking Ahead).

Realized Cap is an important indicator measuring market capital inflow. Unlike the traditional Market Cap, Realized Cap is not simply the current price multiplied by the circulating supply but considers the price of each Bitcoin at its last on-chain transaction. Therefore, it better reflects the actual investment scale in the market.

Of course, the above indicators may also indicate that the market is entering a more mature and stable development stage.

2.2 Retail Investors' Behavior in This Cycle is Becoming More Rational and Diverse

On one hand, experienced retail investors (individual investors who have experienced multiple market cycles) are relatively cautious, taking profits earlier after a certain uptrend, which is different from the past when retail investors chased the price all the way to the top.

For example, data from early 2025 showed that small hodlers (retail investors) net transferred about 6,000 BTC (approximately $6.25 billion) to exchanges in January, starting to cash out in advance, while whales only slightly netted about 1,000 BTC during the same period, essentially remaining unchanged. This divergence indicates that many retail investors believe it is a phase of temporary peak and choose to take profits, while whales (considered "smart money") are holding steady, clearly expecting higher profit margins.

On the other hand, the enthusiasm of new retail investors is still accumulating. Indicators such as Google Trends show that public interest temporarily dropped after the price hit a new high and "reset," without reaching the peak of mass hysteria seen in the late stages of previous cycles. This implies that the current bull market may not have reached its final frenzy stage, and there is still upward potential in the market.

2.3 Institutional Investors' Behavior Has Become a Key Feature of This Bull Market Cycle

The previous bull market cycle from 2020 to 2021 saw a significant influx of institutions and publicly traded companies for the first time, which paradoxically led to an increase in whale holdings—new "whales" such as institutions accumulated large amounts of Bitcoin, shifting Bitcoin from retail hands to these whale accounts.

This trend continues in the current cycle: large institutions are aggressively buying Bitcoin through OTC markets, trust funds, or ETFs, making traditional whales no longer net sellers, to some extent delaying the distribution phase's arrival. This has made the distribution of this bull market cycle more gradual and diversified, rather than the previous pattern of solely retail investors buying the dip: the market's depth and breadth have increased, and new funds are sufficient to absorb the chips sold by long-term holders.

A Glassnode report points out that a significant amount of wealth has already shifted or is shifting from long-term holders to new investors, which is a sign of Bitcoin's market maturation—long-term holders have realized record profits (up to $21 billion in a single day), and new investors have enough demand to absorb these sell-offs; see Bitcoin sees wealth shift from long-term holders to new investors – Glassnode for more details.

It is evident that in this bull market, the interaction between retail investors and institutions has created a more resilient market environment.

3. Shift in Roles Between Institutions and Retail Investors: OG Retailers and Institutional Impact on Liquidity

As the structure of market participants evolves, the roles of institutions and retail investors in the distribution phase have also undergone significant changes.

CryptoQuant CEO Ki Young Ju summarizes the current distribution pattern as follows: "Veteran" retail investors (OG retail) + existing whales → new retail investors (via ETFs, MSTR, etc.) + new whales (institutions).

In other words, retail investors and whales who have experienced the early stages of the market are gradually selling off, with the new buyers including not only retail investors in the traditional sense but also ordinary investors entering through investment tools like ETFs and institutional funds playing the role of whales.

This diversified participation pattern is starkly different from the traditional "whale → retail" linear distribution model.

· In this current cycle, OG retail investors (early individual holders) may hold a significant amount of Bitcoin. They choose to cash out and exit at the peak of the bull market, providing some selling pressure and liquidity to the market.

· Similarly, OG whales (early large holders) also sell off in batches to realize profits multiple times over. In response, institutional whales as new buyers absorb this selling pressure. They buy through custodial accounts and ETFs, with Bitcoin flowing from old wallets to these institutional custodial wallets.

· Furthermore, some traditional retail investors now indirectly hold Bitcoin through ETFs and publicly traded company stocks (such as MicroStrategy's stock), which can be seen as a new form of "retail investor takeover."

This shift in roles has had a profound impact on market liquidity and price trends.

3.1 More Bitcoin Moving Off Exchanges

On one hand, the selling behavior of OG holders usually leaves a clear on-chain footprint: increased activity in old wallets, large transfers moving to exchanges, and so on.

For example, in this bull market, it has been observed that some long-dormant wallets have become active, moving coins to exchanges in preparation for sale, indicating that old holders are starting to distribute chips. Ki Young Ju points out that the activities of OG players are reflected in on-chain and exchange data, whereas the movement of "paper Bitcoin" (such as ETF shares, Bitcoin-related stocks) only shows up in the on-chain records of custodial wallets during settlement. In other words, institutional fund buying often occurs off-exchange or through custody, with the direct on-chain reflection being the increase in the balance of custodial addresses, rather than direct movement on traditional exchanges.

The current exchange's Bitcoin balance is 2.22 million coins, which is also a reflection of this feature.

3.2 New Whales, New Retail Investors Showing More Resilience

On the other hand, institutional investors, as newly emerged whales, not only provide massive buying support but also enhance the market's ability to withstand selling pressure and depth of liquidity.

Unlike in the past when retail investors dominated and panic selling was common, institutional funds tend to buy the dip and hold for the long term. When the market experiences a pullback, the intervention of these professional funds often helps to support and stabilize the price. For example, some analysis suggests that the reduction in volatility in this bull market is attributed to institutional participation: when retail investors sell, institutions are willing to buy to ensure market liquidity, resulting in much smaller price retracements than in the past.

Although the launch of a Bitcoin ETF has brought significant incremental funds to the market, some ETF holders (such as hedge funds) may primarily engage in arbitrage trading, making their fund flows more liquid. The recent outflow of ETF funds indicates that some institutional funds are only engaged in short-term arbitrage rather than holding long-term positions. The recent drop in Bitcoin below $80,000 faced selling pressure from hedge funds engaging in arbitrage strategies.

However, new retail investors have shown greater resilience, as they have not panic-sold at every adjustment but have been willing to continue holding. Bitcoin's short-term holder metric shows a stronger resistance to price drops.

Overall, the interaction between OG retail holders + OG whales and new institutional whales + new retail investors has formed the unique supply-demand pattern in the current market: early holders provide liquidity, while institutions and new buyers absorb chips, making the distribution process in the later stages of the bull market smoother and more traceable.

4. Market Cycle Timeline: Historical Trends and Prospects for This Bull Market

From historical data, the Bitcoin market shows a roughly four-year cycle, each round consisting of a bear market, a bull market, and a transitional complete cycle. This is highly related to the Bitcoin block reward halving event: after the halving, new coin output drops sharply, followed by a round of significant price increases lasting about 12-18 months (bull market), and then entering a bear market correction near the peak.

4.1 History

A look back at the timeline of several major bull markets:

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

· The second halving in 2016, with the bull market peak in December 2017 close to $20,000 about 18 months later;

· In May 2020, during the third halving, Bitcoin reached a double peak near $70,000 at two high points (April and November) by the end of 2021, approximately 17-18 months later.

It is speculated that the fourth halving in April 2024 may trigger a new bull market, with the peak likely to occur within a year to a year and a half after the halving, around the second half of 2025, marking the final distribution phase (end of the bull market).

Of course, the cycle does not mechanically repeat, and changes in the market environment and participant structure may affect the duration and peak of this bull market.

4.2 Optimistic

Some analysts believe that the macro environment, regulatory policies, and market maturity will have a significant impact on this cycle.

For example, in reports at the end of 2024, Grayscale's research team pointed out that the current market is only in the mid-term stage of a new cycle. If the fundamentals (user adoption, macro environment, etc.) remain strong, the bull market could extend into 2025 or even longer. They emphasized that the introduction of a new spot Bitcoin ETF broadens the entry channel for funds, and the clarity of the future U.S. regulatory environment (such as the potential impact of the Trump administration's new policies) may further boost the crypto market valuation.

This means that this bull market is expected to be longer than previous cycles, and the upward trend may extend beyond the traditional time window.

On the other hand, there is also on-chain data supporting the view of a longer bull market. For example, the current cycle's Realized Cap has not yet reached half of the peak of the previous cycle, indicating that the market frenzy has not been fully unleashed. Some analysts therefore predict that the ultimate peak of this bull market may far exceed the previous one, with peak expectations commonly raised to $150,000 or even higher.

4.3 Conservative

However, some believe that the peak will occur within 2025.

Ki Young Ju of CryptoQuant, for instance, anticipates that the final distribution stage of the Bitcoin bull market (various OG holders and institutions concentrating their sell-offs to the last buyers) will take place within the year 2025. His judgment is based on the early distribution stage already entered and the observed influx of new retail funds, and he believes there is no need to switch to a bearish view too early before the final sell-offs are completed.

By combining historical patterns and current indicators, it can be inferred that this bull market will most likely enter its final stages in the second half of 2025. At that point, as the price reaches a milestone peak, various holders will accelerate chip distribution, completing the final allocation process.

Of course, the exact timing and magnitude are hard to predict, but based on the cycle length (roughly 1.5 years post-halving) and market indicators (retail frenzy, institutional fund flows, etc.), 2025 could emerge as a pivotal year.

Conclusion

As Bitcoin transitions from a geeky toy to a trillion-dollar strategic asset, this bull market cycle may unveil a harsh truth: the essence of financial revolution is not to eradicate old money but to restructure the genetic code of global capital with new rules.

The current "distribution phase" is essentially Wall Street's coronation ceremony for taking formal control of the crypto world. When OG whales pass the baton to BlackRocks, this is not the overture to a collapse but the march of global capital remapping—Bitcoin is transitioning from retail's get-rich-quick myth to an "institutional strategic reserve" on balance sheets.

The most ironic part is that while retail is still calculating their "exit scam passwords," BlackRocks have already incorporated Bitcoin into their 2030 balance sheet template.

The ultimate question for 2025: Is this the peak of the cycle recurrence or the birth pangs of a new financial order? The answer lies in the cold chain data—every outflow from an OG wallet is a brick in BlackRock's custody address; every ETF's net inflow is rewriting the definition of "value store."

For investors navigating across cycles, here's a piece of advice: the greatest risk is not missing out but interpreting the rules of 2025 with a 2017 mindset. When "holding addresses" transform into "institutional custody accounts" and the "halving narrative" morphs into a "derivative of the Fed's interest rate decisions," this century's handover has long transcended the realm of bulls and bears—

History always repeats, but this time, it's not the tears of retail but the incessant on-chain transfers of institutional treasuries that take the stage.

This institutional trend may parallel the evolution reminiscent of the Web 1.0 era—where the internet once belonging to geeks ultimately fell into the hands of FAANG (Facebook, Apple, Amazon, Netflix, and Google) giants.

History's cycle is always filled with dark humor.

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