Bitcoin Expected to Rise as Altcoins Underperform: Charles Edwards Insights

In an in-depth interview with Korean crypto researcher Juhyuk Bak, known as @JuhyukB, Charles Edwards, CEO of Capriole Investments, articulated a significant divergence emerging in the cryptocurrency asset markets: while Bitcoin could see its value double this year, altcoins appear structurally impaired, showing no signs of substantial recovery.

Bitcoin Could Hit $200,000 This Year

Edwards, operating from the vantage point of a macro quant hedge fund, expressed a resolute bullish sentiment about Bitcoin, predicting that if prevailing trends persist, a price range of $150,000 to $200,000 is certainly feasible this year. He stated, “If the data stays in the current trend we’re in, I think $150–200K is definitely possible this year.” This forecast is supported by his firm’s pioneering on-chain valuation models, including Hash Ribbons, Energy Value, and the Macro Index.

Edwards specifically pointed out a crucial indicator: “We’re printing new all-time highs on daily and weekly closes,” emphasizing that maintaining a price above $104,000 would be beneficial. He also highlighted that as long as the Macro Index continues its upward trajectory alongside rising US liquidity, the environment is set for a bullish surge.

The Macro Index—a sophisticated machine learning model aggregating over 100 inputs ranging from Federal Reserve liquidity metrics to bond and equity market behaviors—has turned decisively positive. Additionally, Bitcoin’s rally is bolstered by various technical indicators, including the MVRV Z-Score, Hodler Growth Rates, and Energy Value, all signaling significant room for growth.

Why Altcoins Are Struggling

In stark contrast to Bitcoin’s optimistic outlook, Edwards signaled a grim trajectory for altcoins. Though he refrained from specifying individual altcoins, he noted a compelling macro analysis: capital flows have shifted significantly, and altcoins are now virtually unsustainable relative to Bitcoin. He remarked, “Structurally, things are quite a bit different this cycle… The biggest driving forces are Bitcoin ETFs and US policy. That’s creating a centralizing effect—funneling capital directly into Bitcoin.” This shift has resulted in a notable change in investor psychology, particularly within retail spaces.

Edwards highlighted the legacy of prior altcoin cycles, marked by exuberant retail-led rallies followed by devastating drawdowns, often resulting in losses exceeding 99%. “Retail has just gotten destroyed,” he noted. The residual effects of failed ICOs, invalid tokenomics, and the collapse of platforms like FTX have instilled a level of caution that, according to Edwards, was absent just a few years ago.

He elaborated on the current risk aversion among institutional investors toward smaller-cap assets, as they tend to favor regulated exposure to Bitcoin through various means such as ETFs and corporate treasury allocations. “It used to be more of a level playing field. That’s no longer the case,” Edwards explained. “The real money is flowing into Bitcoin—and that probably continues for a while.”

What Would Trigger an Altcoin Resurgence?

Despite the prevailing negative sentiment regarding altcoins, Edwards does not entirely dismiss them. He underscored that a robust altcoin cycle is predicated on Bitcoin demonstrating clear and decisive dominance. Utilizing Capriole’s Speculation Index and Crypto Breadth models, which analyze the relative strength and performance of altcoins, he observed that merely 5% of altcoins are currently trading above their 200-day moving average—a signal early in altcoin cycles that is far from bullish.

He analogized the current market conditions to late 2020, when Bitcoin surged from around $10,000 to approximately $60,000 before altcoins began to show strong performance. Importantly, he noted that this transition required Bitcoin to first decisively breach previous all-time highs. “You want Bitcoin to hit something like $140K while alts are still underperforming. That would be the ideal setup [to trigger altcoin rotation].” Conversely, any premature pump in altcoins while Bitcoin remains stagnant could indicate a market top, which Edwards warned would result in “the last puff of air” for altcoins.

Shifting Cycles and New Risks

Moving beyond immediate price action, Edwards challenged the relevance of traditional Bitcoin halving cycles, positing that the impact of miners—once a predominant force in determining Bitcoin supply dynamics—has seen a considerable contraction due to the recent influx of institutional investors, corporate treasury allocations, and sovereign actors such as Michael Saylor. According to Edwards, “That four-year cycle is dead—or at least dramatically weaker. Miners are now just 2–3% of the total supply flow. The real drivers today are institutions,” signifying a dramatic shift in market dynamics.

This evolution in capital allocation could potentially lower the probability of the typical 80% drawdowns previously associated with Bitcoin, while simultaneously elevating the risk of systemic leverage, particularly from publicly traded companies heavily invested in Bitcoin. Although not seen as an immediate threat, Edwards cautions that long-term vulnerabilities may arise if these major players opt to overextend their positions.

Diversifying in a Shifting Landscape

In terms of portfolio composition, Edwards revealed that while Bitcoin remains Capriole’s core allocation, the firm has also diversified into quantum computing equities like IonQ (IONQ), Rigetti (RGTI), D-Wave (QBTS), and QUBT. He likened the current potential of quantum technology to that of Bitcoin in its infancy: early-stage and volatile, but possibly yielding an even higher long-term compound annual growth rate.

Gold also maintains a strategic position in Capriole’s investment approach—not as a replacement for Bitcoin, but as a hedge. The firm closely monitors the gold-to-equity ratio; a breakout above the 200-day moving average has historically served as a bullish signal for both gold and Bitcoin.

Final Insights

As the conversation drew to a close, Edwards advised investors to filter out much of the daily financial news cycle. “Probably 99% of headlines don’t matter,” he asserted. He emphasized the importance of concentrating on substantive, game-changing shifts such as Federal Reserve policy pivots, substantial global liquidity expansions, and fundamental structural changes in capital flows. “We’re wired to overreact to bad news. The key is to distill the noise down to a few macro drivers that actually influence the markets—and Bitcoin currently possesses these drivers in its favor.”

Until there’s evidence of meaningful breadth in altcoin performance and a break in their long-term resistance structures, Edwards’ message is clear: Bitcoin is poised for significant upward momentum. Altcoins, on the other hand, appear set for a protracted period of underperformance.

At press time, Bitcoin (BTC) is trading at $105,557.

Featured image created with DALL.E, chart from TradingView.com

Source: newsbtc