Charles Edwards: Bitcoin will surge, altcoin will not

In an interview with South Korean cryptocurrency researcher Juhyuk Bak, known by the name @JuhyukB, Charles Edwards, CEO of Capriole Investments, made a noteworthy remark about the polarization in the market.

According to him, while Bitcoin has the potential for exceptional growth and could even double in value this year, altcoins are still facing structural obstacles and are far from achieving significant capital rotation.

Bitcoin could reach 200,000 USD this year

From the perspective of a macro quantitative hedge fund operator, Edwards does not hide his optimism for Bitcoin. He asserts: "If the data continues to follow the current trend, I believe that the level of 150,000–200,000 USD is entirely feasible this year." As the founder of Capriole, a well-known investment fund with on-chain pricing models such as Hash Ribbons, Energy Value, and Macro Index, Edwards has relied on a network of technical signals, sentiment, and macroeconomic factors to make this prediction.

"We are setting new all-time highs on the daily and weekly closing charts," Edwards remarked. "As long as Bitcoin remains above the $104,000 level […] as long as the Macro Index continues its upward trend and liquidity in the U.S. remains expansive, this environment will be very favorable for Bitcoin."

The exclusive Macro Index of Capriole—a machine learning model that integrates over 100 input factors, from the liquidity of the Federal Reserve (Fed) to the bond and stock markets—has now shifted to a distinctly positive state. Edwards emphasizes that the bullish trend of Bitcoin is further supported by other key indicators such as MVRV Z-Score, Hodler Growth Rate, and Energy Value, all of which indicate room for Bitcoin to continue expanding.

However, while Bitcoin demonstrates strength in many aspects, altcoins are painting a completely different picture.

The end of the old altcoin cycle

Edwards did not mention any specific altcoins, but he made a clear macro observation: the capital rotation dynamics have changed, and altcoins no longer hold the same position as Bitcoin. "Structurally, everything in this cycle is completely different […] the biggest driving factors right now are Bitcoin ETFs and U.S. policies. This is creating a concentration effect, as capital flows are being directed straight into Bitcoin," he explained.

He also mentioned the historical cycles when altcoin price surges are led by retail investors, but then followed by catastrophic downturns—often exceeding 99% of their value. "Retail investors have been completely wiped out," he stated bluntly. "There is a fatigue in the altcoin space that did not exist 4–5 years ago."

The legacies of failed ICOs, unsustainable tokenomics models, and negative events such as the collapse of FTX have left deep scars. Meanwhile, large institutions are steering clear of the risks and complexities of small-cap cryptocurrencies, instead focusing on Bitcoin through managed ETFs or corporate treasury allocations. "In the past, everything felt like a level playing field. But that is no longer the case," Edwards remarked. "Large flows of capital are moving into Bitcoin—and this trend may continue for some time."

When will altcoin recover?

Although presenting a rather pessimistic view, Edwards does not completely dismiss the possibility of altcoin recovery. According to him, a strong growth cycle for altcoins is a potential condition, but only if Bitcoin demonstrates a clear dominance.

Using Capriole's Speculation Index and Crypto Breadth models to monitor the relative strength and price volatility of altcoins, he made an important remark: "Currently, only 5% of altcoins are above their 200-day moving average. This is not a positive signal."

He compares the current situation to the end of 2020, when Bitcoin rose from $10,000 to $60,000 before altcoins began to outperform. According to him, for capital rotation to occur, Bitcoin first needs to decisively break previous all-time highs. "You want Bitcoin to reach around $140,000 while altcoins are still underperforming. That would be the ideal setup […] that’s when the capital flow starts to rotate down to the altcoins," he explained.

Conversely, if altcoins begin to grow too early while Bitcoin is still fluctuating within a narrow range, Edwards sees this as a sign of a price peak. "That is often the last gasp," he warns.

The cycle is changing, risks are evolving

In addition to price factors, Edwards also questions the relevance of traditional halving cycles. He argues that the impact of miners—once the main drivers of Bitcoin supply—has significantly decreased due to the emergence of ETFs, corporate treasuries, and large institutions like Michael Saylor. "The four-year cycle is dead—or at least has weakened significantly. Miners now only account for 2-3% of total supply flow. The real dynamics today come from institutions," he remarked.

This change not only reduces the likelihood of 80% drops but also increases the risk of systemic leverage—especially from companies heavily listed in Bitcoin. Although this is not an immediate threat, Edwards warns of long-term vulnerabilities if large institutions abuse leverage.

Besides Bitcoin, Edwards also shared about the diversification in Capriole's investment portfolio. While Bitcoin remains the core focus, the fund also invests in stocks in the quantum computing sector such as IonQ (IONQ), Rigetti (RGTI), D-Wave (QBTS), and QUBT. "I think quantum is like Bitcoin back in 2015. This is a field that is still very early, very volatile, but the long-term annual growth rate could far exceed Bitcoin."

Additionally, gold also plays a strategic role in the fund's investment portfolio, not as a replacement but as a risk hedging measure. Capriole closely monitors the gold-to-equity ratio, and when this ratio surpasses the 200-day moving average, it is considered a historically positive signal—for both gold and Bitcoin.

Conclusion

Edwards recommends that investors should ignore most financial news headlines. "Perhaps 99% of the headlines are not really important," he said. Instead, focus on the groundbreaking changes: the Fed's policy changes, the expansion of global liquidity, and the structural capital flow restructurings. "We tend to overreact to bad news. It is important to filter out a few macro factors that really affect the market—and right now, Bitcoin has those supportive factors."

Until altcoins break through long-term resistances and show more significant strength, the message from Edwards remains very clear: Bitcoin will take off. Altcoins have not yet—at least not at this moment.

Mr. Teacher