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|15 min ReadCrypto’s four-year cycle faces its fiercest test
Jax Morales
Senior Analyst
Published
Jan 16, 2026
The crypto market is stuck in a strange split-screen. Bitcoin ETFs are live. AI is sucking capital out of everything. Long-tail tokens have no bid. Even stars like Solana sometimes trade like they are out of friends. People feel euphoria and panic at the same time. Everybody knows that feeling. It is exactly when the loudest bulls and the most stubborn bears stop memeing and start arguing with real ideas.
In this episode of The Journey Man, former global macro investor and Real Vision founder Raoul Pal sits down with Placeholder partner Chris Burniske. One leans bullish through the liquidity lens. The other is openly nervous that this cycle may already be rolling over. Both think in probabilities, not certainties. Both accept they can be wrong. And both are trying, in their own way, to stop people from blowing themselves up.
The original conversation is here: https://www.youtube.com/watch?si=68gX2Q7k8xtVGC4Y&v=AeqhXzH9ULw&feature=youtu.be
Bulls, bears and a cycle that feels “off”
Summary: Price action, not memes, says this may be a topping zone.
Raoul opens with the real question people ask in private chats. Where are we in the cycle. Not the cartoon version. The actual one.
Chris answers like a risk manager. Bitcoin is roughly 20 percent below its peak. In traditional markets that is already a bear market. In crypto it can be either a “speed wobble” or the start of something deeper. Ethereum is down closer to 40 percent from its highs. Solana has dropped about 50 percent from its last major peak. That is not a gentle pullback. That is real pain.
If you follow the classic four-year template, this should be the topping region. You top here, then you find a bottom roughly one year later. That old pattern lined up nicely with halvings and earlier business cycles. But, Chris says, the pure “halving story” gets weaker every time. New issuance is smaller. The inflation rate is lower. Miner flows matter less in the big picture. At the same time, Raoul has done a tremendous job teaching people that liquidity cycles sit above everything. Right now those two maps do not line up neatly. That mismatch makes Chris uneasy.
He describes the market like an organism. The way it moves tells you when something is wrong. For him, the first red flag was Solana’s behavior during the ETF hype wave. Spot Bitcoin ETF buying pushed BTC higher. Front-running around a possible ETH ETF helped ETH. By his framework, a high-beta chain like Solana should have screamed higher in that setup. Instead, it sagged. That told him the marginal buyer was gone, while the seller was still there.
Then came the violent crash in October. On some venues, long-tail assets dropped 60 to 90 percent in a single day. Binance prints and Coinbase prints did not match. On Coinbase, many coins simply retested old lows. On Binance, they looked destroyed. Liquidity disappeared precisely when people needed it most.
The deeper worry for Chris is that the bid for long-tail tokens had already paused before the crash. The flush only made the hole visible. When a wick shows you an “absurdly low” price, people start to wonder if that is where real buyers actually live. That is how a technical event becomes a psychological scar.
Raoul pushes on a different weak point. What if belief in the four-year pattern is itself part of what makes it real. If everyone expects a top in this window, veterans quietly sell into strength, especially those who bought very early. Many original whales have done this every cycle. They do not need Reddit. They just need a number on the screen.
So on one side you have structural selling and fragile long-tail liquidity. On the other you have a big macro story saying liquidity should be returning. The puzzle is why crypto is not cleanly following that macro script.
Risk managers in a casino: how serious investors think
Summary: Real players live in probabilities, not Twitter moods.
One thing Raoul and Chris agree on fully is that serious investors are never “all in” bulls or “all in” bears. They live in the messy middle. They are long something. They are scared of something. They are constantly grading odds.
Chris has been publicly cautious since that October wipeout. He felt the tape get heavy. He did not see enough real demand under the surface. So he trimmed risk. Today he sits around 39 percent cash and 61 percent in what he calls “capitalist assets” that build wealth over time. Crypto is a big part of that 61 percent, but not the only part.
He tells newer investors something that sounds humble but is powerful. If you go through your first full cycle and end up roughly flat, that is a win. You have taken the pain, felt the swings, and learned a lot. The tuition is expensive. The diploma is worth it.
To help people make decisions, he uses a simple four-square mental test. Imagine you sell today. If price drops, how happy will you be. If price rises, how angry will you be. Now imagine you do not sell today. If price rises, how happy will you be. If price drops, how angry will you be. Put those four feelings next to each other and you often see the rational move very clearly. The trick is to do this before the move happens, not after.
Raoul adds another simple structure. He caps his “stupid money” at a small slice of his net worth. Maybe around 10 percent goes into high-risk tickets. Meme coins. Wild narratives. Things everybody knows are closer to casino than investment. He looked back and saw that every single one of those punts lost money. That is the point. They exist to scratch the itch, not to build the fortune.
Chris knows about pain in a very practical way. Early in his crypto career he had less than five figures to his name. Then he suffered one of the first major SIM-swap attacks. His phone number was hijacked. Email, Apple accounts, everything fell like dominoes. His digital house was violated. He lost almost everything in that hack.
It was, he says, an awful experience. You do not even know when it is “over” the way you do with a normal burglary. But it forced him to learn security, to rebuild from scratch, and to accept that in this world you must move forward, not sit in victim mode. Later he rebuilt positions, especially in ETH at low prices, and those rebuilt stacks carried him through the next boom.
He also laughs about his mistakes in the big ICO wave. In unit terms he lost a lot of ETH chasing every hot deal under the sun. On paper he looked like a genius. In hard currency he was just another guy who over-traded.
Both men hammer the same message. Failure is the best teacher. The goal is not to avoid being wrong forever. The goal is to survive long enough that your winners have time to compound.
The long-tail trap: memes, FDV and structural flows
Summary: Most coins will not save you, even in a bull.
The temptation in every crypto cycle is the same. People get bored with Bitcoin. Then they get bored with ETH. Then they sprint as far out on the risk curve as they can. They tell themselves the front-page coins are “too slow” to change their life. They want the 100x ticket hiding in some tiny ticker.
Chris is blunt about this. The long tail has become too long. Token issuance has turned industrial. You have venture factories, launchpads, layer-two farms, meme factories. The number of names has outgrown any clean power-law distribution. The curve has been flooded.
He points out that the dominant trade of the past several years was not some obscure microcap. It was Solana, a large high-beta layer-one with strong engineering and a real ecosystem. The opportunity was clear. The liquidity was real. And still most people missed it because they were chasing something “spicier.”
He drops a line that sticks. Most investments are bad investments. The set of assets that survive multiple full cycles and keep printing higher lows on the chart is tiny. Maybe dozens. Everything else is a one-shot wonder that demands perfect timing. Miss the timing and the coin becomes a distraction, not a blessing.
Meme seasons and FDV panics in the last peak drove that lesson home. Issuers and early investors discovered they could push valuations to absurd levels and dump on unlocks. Retail learned what fully diluted valuation really means the hard way. Now the market is shifting toward an obsession with real flows, real buybacks, real burn, real yield.
That is why, Chris notes, some names with clear structural buy pressure still trade well. BNB is the prime example. It has shown that strength again and again. Newer names like Hype that run strong fee capture and aggressive buybacks have looked good too. Bitcoin and Ethereum maintain deep structural demand. Long-tail tokens without those flows are getting repriced. Slowly. Brutally.
Raoul’s answer for most people is simple. Anchor at least half your crypto exposure in Bitcoin. Build around it with a few strong names like ETH or Solana. Keep the long tail small. That portfolio may look “boring” on social media. It will look beautiful on a ten-year chart.
Raoul Pal’s liquidity engine and the “Everything Code”
Summary: Liquidity and debt cycles may matter more than halvings.
Where Raoul really digs in is at the macro layer. He has spent years building a unified framework he calls the “Everything Code,” tying liquidity, debt and risk assets into one picture. His core claim is not modest. Liquidity, as he measures it, is the strongest macro driver of crypto in history.
He starts with a familiar tool. The ISM index that tracks the business cycle. For a long time it behaved like a neat four-year rhythm. Then, in recent cycles, that regular pattern seemed to die. Many people gave up trying to use it. Raoul recalculated.
He looked behind the business cycle and found a different clock. The corporate and sovereign debt refinancing cycle. After the global financial crisis, massive piles of debt were pushed out three to five years. That created a series of refinancing “bulges.” The true rhythm of the system, he argues, is closer to a bit more than five years, not the tidy four years people rely on in memes. That refinancing pattern, not halving alone, sits underneath Bitcoin’s big moves.
From there he builds a liquidity index. It blends central bank balance sheets, bank reserves and broad money. He finds that loose financial conditions in the dollar, in rates and in commodities lead this liquidity index by about six months. Then liquidity itself leads the business cycle by another three to six months. Together that gives him a roughly nine-month lead time on growth.
When he overlays Bitcoin on the business cycle, the fit is almost uncanny. When he overlays global liquidity on crypto total market cap ex-Bitcoin, the correlation jumps into the 90s in percentage terms. That is about as strong a macro relationship as you ever see.
Right now his models say we are still in the soft part of the business cycle, not the strong part. Bitcoin’s recent stumbles map nicely onto that softness. But the refinancing bulge ahead suggests more liquidity support is coming. On top of that you have fiscal deficits, election politics and the simple need for governments to keep both Wall Street and Main Street alive. It is hard for him to believe policymakers will choose a brutal slump right into that wall of debt.
From his perspective, ignoring liquidity here would be like ignoring gravity. Yes, market structure in crypto is messy. Yes, some leverage is still hidden in yield-bearing stablecoin schemes and off-screen trusts. But the big tide, he argues, is still rising. That is why he struggles to fully buy into a deep and long winter scenario right now.
Chris does not dismiss this. In fact, he agrees that Raoul’s framework is powerful. His “paranoid point” is timing. The debt bulge peaks later. AI is a massive competing black hole for capital. Social media amplifies every wobble. A path where crypto sees a shallower, more frustrating drawdown first, then rides the next liquidity wave later, feels very realistic to him.
If this is the top – and if it is not
Summary: Tactical bear, strategic bull, and a market growing up.
When Raoul pins him down on probabilities, Chris does not dodge. He assigns something like two-thirds odds that we are in a topping region for this cycle. But he does not think the next phase looks like the brutal 80 percent wipeouts of the past.
He watches one moving average above all. The long-term weekly trend line that Bitcoin has respected across multiple cycles. A full retest there would mean a drawdown in the mid-50s in percentage terms from the high. That is still savage for anyone holding leverage. But it is much less catastrophic than earlier crashes. Even a drop into the 40 percent zone would feel like a disaster on Twitter while still fitting a very normal bull-market correction.
Everything comes back to time frame. Ask him about ten years, he is bullish. Ask him about the next three to nine months, he is cautious. Call it a tactical bear inside a strategic bull.
He is also obsessed with relative strength. He watches how ETH and Solana behave against Bitcoin, not just in dollars. He watches privacy coins like Zcash, Dash, Monero and Decred, which have recently all moved higher together. Zcash in particular has outperformed in that group. Some old-school Bitcoin whales have been rumored to use privacy coins late in cycles to hide exit flows or pick up extra juice. Chris does not trade that rumor. He watches the structure. If Zcash can hold a much higher low in the next real drawdown while others round-trip, that would be a meaningful signal.
At the same time, he thinks the market is slowly re-pricing major networks as digital sovereign bonds. Over time, he expects yields for large proof-of-stake chains to settle into ranges that look a lot like government bond curves for “digital nations.” For a mature network like Ethereum, he imagines a world where holders demand something like a mid single-digit real yield funded by actual fees, not just inflation rewards. For a slightly riskier network like Solana, the number would be higher. For newer platforms like Sui, higher again. Asset prices would then move to clear at those yield levels.
Under that world, everything becomes about structural flows. Stablecoins with real profits. Chains with real fee revenue. Tokens with real buybacks. DAT products and yield-wrapped stablecoins with hidden leverage become the new danger zone. “Stable” assets that are actually complex carry trades deserve a warning label.
On the venture side, Chris thinks the old token-VC machine is breaking. Over-priced rounds. Massive lockups. Sky-high fully diluted valuations. Then a thin float dumped on retail. That playbook is now out in the open. It is getting harder to run. He expects more focus on lower valuations, more fully circulating supplies from day one, and more deals in boring but genuinely cash-generating companies in areas like stablecoins and infrastructure.
He even notes the rise of “crypto private equity” targeting distressed assets. Funds looking to buy mid-sized projects that do not make enough money, roll them up, and sell them back to traditional finance or big platforms later. It is a sign of a market that is growing up, not just chasing tickers.
In the end, both men land on a surprisingly similar message for ordinary investors. You probably will not time the exact top or print the perfect bottom. You will suffer drawdowns. You will make stupid trades. The key is position sizing, time horizon and ego control. Keep a core in assets that can survive multiple cycles. Use cash as a shock absorber. Allow yourself a small sandbox for high-risk experiments, and assume most of those will fail. Accept that wealth compounding is slow, sometimes boring, but tremendously powerful. The real goal is not to win one giant bet, but to still be in the game when the next beautiful, historic opportunity lines up again.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.