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This Math Reveals Why Bitcoin Shorts Are About to Explode! | Truth Block · Simply Bitcoin

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We get to 5% of the network bitcoins going to be a million a
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coin. The supply shock is really
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inevitable. There's not enough supply to eat
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up a billion a week from micros value.
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The general sentiment will flip from being short to being long
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and we'll have a face ripping rally.
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The biggest buyer in history just absorbed another quarter
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billion dollars of Bitcoin and the price barely moved.
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The bears are piled into the most negative funding rates in
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bitcoins history. The Cycle Bros are calling for
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one more leg down and almost no one is talking about the math
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hiding in plain sight. A single a curve that fits every
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one of Michael Saylor's Bitcoin purchases.
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A curve that says the supply shock everyone keeps waiting for
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hasn't even started yet. My goal today is to walk you
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through that math, show you the short squeeze quietly building
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underneath the price, and explain why the next 18 months
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may break every Bitcoin cycle assumption you've held for the
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last decade. This is truth block.
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I'm Hurley. Let's mind truth.
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Bitcoin started the week with a small dip down to about $76,000.
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About six months ago we were at the all time high of about
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126,000, so we're currently 39% off the highs.
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Sentiment is a mixture of boredom and exhaustion.
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The chart looks like a textbook 4 year cycle drawdown right on
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schedule. Earlier this morning Sailor
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announced another buy 3273 Bitcoin roughly $255,000,000
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worth. That brings strategies total to
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818,334 coins along with last weeks monstrous purchase
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strategy now holds more Bitcoin than BlackRock Spot ETF ibit
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that's a single corporation with more Bitcoin than the biggest
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spot ETF on Wall Street meanwhile on the other side of
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the trade, the bears are absolutely stacked negative
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funding rates on binance just hit a three standard deviation
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extreme the most negative print in bitcoin's history we've been
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below the line for 46 days straight now we'll get into what
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all this means a little bit later, but for now I just want
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you to hold this picture in your head.
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The largest buyer in history just continues to buy.
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The most leveraged short positioning in history is
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fighting it, and the price is doing nothing.
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That's contradiction We're walking through today, and the
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only way to make sense of it is to stop staring at the price
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chart and start looking at the math underneath it.
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While everyone else has been staring at the price, Sailor has
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been laying out his own math. This clip is from his sit down
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with David Gochtein in December. It's four months old, but the
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math hasn't changed. Watch how clearly he frames the
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ceiling. What I've said is, is if we get
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to 5% of the network, bitcoins going to be a million a coin.
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If I get to 7 1/2% of the network, it'll be 10 million a
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coin. So think of it as I'm buying
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something getting exponentially more expensive, using
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exponentially more money and where, where do we top out?
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You know, I think we top out between 5 and 7 1/2% and then we
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just exponentially slow down, right?
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And the rest of the network is right now it's, you know after
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$100 billion of money from BlackRock and 50 billion from
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us, 85% of the Bitcoin is held by the O GS.
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After the next trillion dollars from the big institutions, maybe
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it'll be 75% will be held by the O GS.
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So it's think of us as powering the network up and we're pushing
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against an exponentially hardening asset and that's the
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way it should be. Look at 95% percent of the
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bitcoins been mined by the year 2030.
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Five, 99% that last 1% of Bitcoin comes out between the
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year 2035 and the year 2140. It's 100 years to get the last
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1%. And so when we look at it like
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that and we will just be like the little engine that could, we
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will keep, you know, turning the crank, powering the network, you
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know, driving up the network value for everybody.
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And and you know, I think that you can do that at least for the
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next 100 years. I don't know what happens after
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100 years. I haven't worked that out yet
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that the AI version of me will be will be giving interviews in
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100 years about what we're doing next.
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But that won't be me. So Saylor gave us his own model
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in plain language. He says that when strategy gets
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to 5% of the network, that gets us to $1,000,000 per coin. 7.5%
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gets us to 10 million. Then his accumulation slows
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down. He calls it exponentially
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hardening, meaning the more you buy, the more expensive every
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additional coin gets. Now that's not a price
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prediction, that's a description of what happens when a price
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insensitive buyer pushes against an asset with a fixed supply.
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And here's the part that gets me.
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Strategy now holds 3.9% of all the Bitcoin.
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By Sailor's own model, he just needs 5% to trigger the
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$1,000,000 per coin. So either he overestimated the
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price impact of his buys and he can therefore buy more, or will
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soon see a very sudden repricing like Bitcoin loves to do.
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Regardless, he's giving us the shape of the curve, and it turns
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out that shape can actually be drawn.
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A Bitcoin analyst on X who goes by the name of Plan C did
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something interesting. He took every one of strategies
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Bitcoin purchases and tried to fit them to a curve,
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specifically an S curve. And the fit is shockingly clean.
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The curve nails almost every one of sailors buys.
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The ceiling sits at about 2.1 million Bitcoin, roughly 10% of
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all the Bitcoin that will ever exist.
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The inflection point, the steepest part of the curve where
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accumulation moves fastest, hits in early 2027 and along the way
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strategy crosses 1,000,000 bitcoins sometime around
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Thanksgiving of this year. Five years out, the curve has
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them just under 2 million coins. So the fastest accumulation
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phase is right now through 2028. Now keep in mind this isn't a
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forecast, it's a description of what's already happening.
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The curve isn't imagining the future, it's tracing 107 buys
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that already occurred. The future projection just falls
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out of the math. Now Plan CS 10% ceiling is
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slightly more aggressive than Sailor's own 5 to 7.5%.
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So this is the bullish version. But the shape itself, the S
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curve, comes straight from the data.
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The shape is what matters. This is the Sailor curve.
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And the math gets reinforced when you listen to who else is
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saying it. Here's Samson Mao on Pete
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Rizzo's podcast. Watch what he does to the idea
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that exchanges have plenty of Bitcoin to sell.
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He is kind of setting the floor for everything.
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So his average cost is seven, $75,577 per BTC and with this
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recent downturn in the market, he's been able to average down,
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which is really insane when you think about it.
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The biggest holder, the biggest single holder entity of Bitcoin
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is able to average down and I think even other treasury
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companies like Metaplan are averaging down.
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So you kind of have to think that this is an anomaly.
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It's these are buyers of last resort.
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They will always buy Bitcoin. They're price insensitive.
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They will always buy even if it's 500,000 a coin or 700,000 a
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coin, but people right now are willing to sell them Bitcoin for
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60 thousand $70,000, which let's them average down.
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And I just don't think it's sustainable.
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And you couple that with like BSTR from Adam Back, they are
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probably going to de spec in the next month or so and they have
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$1.5 billion of capital to to deploy and then they're going to
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be running similar strategies as strategy to accumulate.
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So if you look at the landscape, there is just not a lot of room
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to wiggle. If you think back to say six
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months ago, it doesn't seem to happen now, but every time
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Sailor would announce a buy, we will see a dip, right.
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And recent days, I think it's because of sustained buy
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pressure from STRC sales, but we don't see that dip anymore.
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He announces we bought and we're still steady at the 74,000
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something mark. But if you think about it, you
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know, even if there is the sailor dip after he announces
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and we go down a bit, then maybe BSTR will buy that day too.
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And then the next day it's Metaplanet.
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And there's only so many days in the week.
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And there will be more Bitcoin treasury companies popping up
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too. So I just think the supply shock
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is really inevitable. And the the amount of Bitcoin
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available is actually lower than most people think.
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People think there's, you know, 2-3 million coins on exchanges
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ready for sale, but those are not coins that are meant for
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sale. That is liquidity.
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That's market makers and trading firms and hedge funds using that
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Bitcoin on exchange to perform other activities.
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And it is not meant to be just sold and never bought back.
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Two things worth double clicking on buyers of last resort.
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Price insensitive. That's the operative phrase.
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Sailor will buy at $70,000. He'll buy at $700,000.
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The price doesn't change his behavior, and the other Treasury
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companies are running the same playbook.
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Second, the two or three million coins sitting on exchanges
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aren't actually for sale. That's working capital for
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trading firms and hedge funds. The real liquid float is a
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fraction of that, and it's shrinking every quarter.
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Strategy alone is buying multiples of mine supply every
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week. The ETFs are doing the same.
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The buyers are absorbing more Bitcoin than is being created.
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That math just doesn't hold forever.
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Now, the engine funding all these sailor buys is a preferred
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stock product called STRCI. Did a deep dive on that one last
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week, so check out that video if you haven't already.
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For today, just know it's real, it's growing fast, and it's
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converting capital that was sitting in Fiat into Bitcoin
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demand at a rate that didn't exist in any prior cycle.
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Now listen to what Mike Novogratz says about what's
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actually driving Bitcoin right now.
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No, you know, Bitcoin is interesting.
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US retail has come back period, end of story.
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And you see it through the ETETS, but mostly you see it
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through micro strategy. Sailor, the Wizard of micro
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strategy, Michael Saylor is back and he is selling stock and he
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is selling perpetuals and he is buying Bitcoin and his premium
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is expanding, not contracting. What it means by now you're 130
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times NAV, his M NAV is 130 relative to the Bitcoin he owns.
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And so he can sell micro strategy and make money, you
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know, create yield as he says for his investors.
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He dilutes his new investors, current investors and, and
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dilutes his new investors and, and and it's a creative to new
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investor to old investors. And so it's a, a strategy that
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he has almost, he's almost the only guy that actually has this
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strategy built in. You know, he had all these other
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dats that tried it. They all traded discounts.
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But but Michael has managed to create this cult of people that
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trust him and, and that by micro strategy as their Bitcoin proxy,
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they buy it as micro strategy and it's working.
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And that is, I mean, he bought 2 1/2 billion dollars of Bitcoin
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last. There's not enough supply to eat
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up a billion a month from my a billion a week from Michael
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Schaller. The bears can argue about
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timing, but the math is settled. So back to the bears for a
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second. When you trade Bitcoin with
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leverage, you're not trading actual Bitcoin.
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You're trading a contract called a perpetual future.
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To keep that contract tracking spot, exchanges run a small
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payment between longs and shorts every 8 hours.
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If there's more longs than shorts, then longs pay shorts.
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If there's more shorts than longs, then shorts pay longs.
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Right now shorts are paying longs at the most negative rate
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in bitcoins entire history and we've been negative for 46 days
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straight. So many bears are piling in that
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they're bleeding about 5% annualized just to hold the
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position open. This is people paying interest
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to bet against Bitcoin while Sailor is buying multiples of
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mine supply every week. So why would one do this?
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Presumably because they believe the four year cycle script.
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They think another leg lower is coming on schedule.
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The leverage is cheap, the conviction's high, the cycle's
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paid off 4 times in a row. So they pile in and every day
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they bleed. Jeff Park posted the funding
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rates chart yesterday and said quote, I would not want to be
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short Bitcoin here. I agree, I wouldn't either.
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This is the cleanest setup for a short squeeze we've had all
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cycle. The biggest buyer in history
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absorbing supply daily shorts, paying record premiums.
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On the other side, a derivatives market five times the size of
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spot. When sentiment flips, the move
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is going to be violent. Which brings us to sailors.
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Read on the same dynamic. I think that the price action is
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choppy and sideways and, and you know, when you talk to people,
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they say the market's really being driven in the near term by
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the derivatives traders. And you know, the derivatives
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market, the perpetuals is 5X bigger than the spot market.
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And so if a guy wants to put a billion dollars up and go 50X
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leverage short or 50X levered long, then that trader controls
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the price for the day because it's a lot of leverage.
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And you know, it's a global market and 80, you know, people
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talk, they, they like to talk about the corporations, but at
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the end of the day, 85% of the Bitcoin is held by not
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corporations. Nobody knows who owns it.
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And those crypto native O GS, they're using the crypto
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exchanges and crypto derivatives to get liquidity.
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And so you got $1.7 trillion worth of people with capital
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that could lever it 10 or 20 to 1 and they decide what they're
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going to do, you know, above my pay grade.
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I think at some point, you know, the, the general sentiment will
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flip from being short to being long and we'll have a face
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ripping rally. NI just can't tell you when.
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Sailor says it as cleanly as anyone can.
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The derivatives market is five times the size of spot.
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One whale with a billion dollars and 50X leverage runs the price
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for the day. That's the market we're in.
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And right now it's full of shorts paying record premiums to
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short an asset whose biggest buyer just won't stop buying.
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Nobody can tell us when sentiment flips, but Sailor
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keeps buying through it. And when those shorts get
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squeezed and the supply isn't there to give them an exit,
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that's the face ripping rally he's describing.
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And he's describing it because he's the one quietly engineering
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the floor underneath it. Now let's talk about the four
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year cycle dogma. For 15 years, the halving cycle
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has run. Bitcoin halving compresses,
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supply narrative builds, retail piles in, euphoric blow off top
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occurs, and then an 80% drawdown.
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Repeat. Honestly, I thought the cycle
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was already broken six months ago.
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Clearly I was wrong about the timing.
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Price dumped right on the calendar, everyone was watching
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and many people got caught flat footed.
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So why did the dump come right on schedule?
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Was that the cycle working or was that everyone front running
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a move that no longer has structural force behind it?
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Because if it was self fulfilling, that's not the
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cycle. That's just human expectations
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clearing themselves out, and the Halving's actual supply impact
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today is essentially nothing. Bitcoin mines about 450 coins a
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day. Sailor bought 3273 just last
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week. Whatever is left of the four
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year cycle is psychological, not structural, and it's fighting a
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market that's been different from day one.
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I mean just look at the receipts.
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This was the first cycle to hit an all time high before the
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halving, The first with spot ETFs absorbing retail demand on
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the way up, and the first with a public corporation passing the
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largest spot ETF and Bitcoin held.
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The bears are running 2017 plays against a 2026 market.
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And I get it. The pull to treat it like every
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cycle before it is real. We've been trained for it.
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Every cycle ended with a Cliff. So we wait.
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We sit on cash, we tell ourselves we'll buy lower.
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But this time the supply isn't there.
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The shorts are at historic extremes and when that breaks,
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you don't get time to reposition.
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I argue the four year cycle isn't gone, but it's being
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absorbed by something much bigger.
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I think the Sailor curve is the new cycle.
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And here's the kicker, as Sailors accumulation curve
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approaches it's ceiling, the price has to do something
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violent. Just run the math.
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Strategy is at 3.9% of all Bitcoin.
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Sailor says 5% triggers $1,000,000 a coin, 7.5% triggers
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10 million. He's already 80% of the way to
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the first number. So either Sailor wildly
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overestimated his own price impact and you can keep buying
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without the price responding, or Bitcoin's going to do what
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Bitcoin loves to do, sit quietly, bore you to death, and
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then suddenly and violently reprice.
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Because the curve is constrained, Sailor cannot keep
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buying at $76,000 forever. Eventually the price has to move
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up and clear the supply. So either it grinds higher into
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the buyer, or it gaps higher when the leverage breaks and the
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float disappears. That's the dynamic plan C's
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chart is showing us without saying it.
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Sailor's accumulation S curve is determining the price.
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As the top of his curve approaches, the steep part of
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the price curve has to follow the two curves.
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Stack his accumulation peaks and the price S curves up.
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That is the new cycle. And this only works with
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Bitcoin. No other asset has a fixed
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supply. Draw this curve against the
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dollar. They print more gold.
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They mine more stocks, they issue more shares.
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Bitcoin's the first asset in history where demand meets a
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truly fixed supply, and the result is a clean, predictable
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curve. It's not magic, it's physics,
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and that's what Sailor means when he says Bitcoin is
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exponentially hardening. So put it all together.
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The Sailor curve is in the steepest part of its
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accumulation phase. Strategy is absorbing supply
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daily shorts are at historic extremes.
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A derivatives market five times the size of spot, a supply shock
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everyone's been waiting for hasn't even started yet.
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It's been delayed by leverage and leverage is finite.
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But now I want to hear from you. Do you think the four year cycle
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is dead, dying, or still running this market?
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Where does Sailor actually top out 5 percent, 7.5 percent, 10%?
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If Bitcoin finishes 2026 in the green, does that settle the
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cycle debate or do the Cycle Bros get one more shot?
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Leave your thoughts in the comments below.
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And if this episode helps see what's happening underneath the
17:59
price hit like share it with somebody who's still waiting for
18:02
that next leg lower. And don't forget to subscribe to
18:04
the Simply Bitcoin channel so you don't miss the next one.
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Thanks for watching and we'll see you Thursday.