Morgan Stanley’s Denny Galindo Warns: Bitcoin Enters Its ‘Fall Season’
- Galindo warns Bitcoin has entered its “fall season,” urging investors to lock in profits.
- He links Bitcoin’s performance to global liquidity cycles of expansion and contraction.
- The fall phase signals market maturity and calls for caution before the next downturn.
Morgan Stanley strategist Denny Galindo has cautioned investors that Bitcoin (BTC) has entered its “fall season.” He stated that the cryptocurrency market follows a consistent four-year rhythm marked by three strong years followed by one year of decline. According to Galindo, this phase signals a time for investors to secure profits before the market cools.
The Bitcoin price is affected by both macroeconomic and microeconomic factors, Galindo said. On a macro level, it follows the global money supply, or M2, which inflates and deflates approximately every four years. Bitcoin generally goes up when liquidity is abundant and down when the money supply tightens. This trend, he noted, has been common throughout Bitcoin’s history.
Bitcoin Mirrors Commodity Cycles as It Enters Its ‘Fall Season’
He compared the cycle to commodities such as oil and coffee. When shortages arise, prices surge, attracting speculators who add leverage until the bubble bursts. The resulting correction mirrors commodity market behavior, with large drawdowns removing excess speculation. Galindo said BTC shows similar traits to supply-demand dynamics and investor sentiment shift.
To simplify market behavior, he divides Bitcoin’s movement into four “seasons”: spring, summer, fall, and winter. Spring represents recovery, summer reflects strong growth, fall indicates profit-taking, and winter marks decline. “We are in the fall season now,” Galindo said. “Fall is the time for harvest. It’s the period when investors should consider taking gains.”
He noted that this phase generally lasts about a year. In past cycles, Bitcoin’s fall season ended around late November, often followed by a downturn. He emphasized that timing may vary, but patterns suggest a nearing transition. The debate among analysts now focuses on whether this fall would last longer or lead directly into winter.
Investors Redefine Bitcoin’s Role in Portfolios
Galindo pointed out a shift in investor behavior. A few years ago, crypto interest was limited to curious clients, but legislation such as the Genius Act and new IPOs have increased participation. Financial advisors who once avoided crypto are now studying Bitcoin’s role in portfolios. He said the focus remains primarily on Bitcoin rather than other tokens.
He described three main investor profiles. The first group views Bitcoin as digital gold, seeking protection from inflation and fiscal instability. The second treats it as a venture capital asset, betting on technological innovation. The third uses it as a portfolio diversifier due to its low correlation with traditional assets. Among these, he said, the gold narrative dominates.
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Galindo outlined balanced allocation strategies for each approach. Investors considering Bitcoin as the digital version of gold could keep about 0.35% of their hybrid portfolio with a precious metals allocation of 5%. Those in the venture capital group could allocate about 1% of portfolios, similar to the alternative investment exposure.
He said Morgan Stanley Wealth Management recently formalized exposure limits to prevent excessive risk. Conservative clients are advised to keep crypto exposure between 0% and 2%. Moderate investors could extend to 3%, while aggressive ones would reach 4%. These ranges allow participation in Bitcoin’s potential growth without destabilizing portfolio performance.
Galindo said most clients prefer exchange-traded products over direct holdings because they are easier to manage and integrate within existing accounts. However, he noted that liquidity differences remain between spot and ETF markets. He concluded that investors should remain disciplined, review allocations, and prepare for Bitcoin’s next phase as the market approaches the end of its fall season.
