Bitcoin and gold both issue warnings! Hong Hao: Investing now is like speeding toward an accident.

Renowned economist Hong Hao recently stated on his latest program, “Hong Hao Strategy,” that gold has surged too rapidly over the past few weeks and may be heading toward a crash. He believes it’s not yet the right time to buy gold, noting that a 10% decline isn’t enough to fully digest the bubble. Regarding Bitcoin, Hong Hao pointed out that it’s approaching the peak of its four-year cycle. Even if new highs occur, they likely won’t significantly exceed around $115,000 to $125,000. He recommends waiting until the third quarter of next year, after the halving event, to consider entering.

Gold surged $1,000 in weeks; bubble not yet fully digested

(Source: TradingView)

Hong Hao’s analysis of gold carries a warning. “Gold has risen $1,000 in just a few weeks, whereas it took several years to gain that much before. How is it possible that it shot up $1,000 in just a few weeks?” This rhetorical question directly points to the unsustainability of recent gold gains.

He uses a vivid metaphor to explain the risks of such a rapid surge: “It’s impossible not to crash — just like driving too fast. If you’re speeding, you’re definitely going to crash. That’s without question.” This analogy links financial market risks to everyday life experiences, helping ordinary investors understand the dangers of parabolic rises.

From a technical perspective, Hong Hao describes this pattern as a “parabolic advance.” Parabolic rises are among the most dangerous formations in technical analysis, often appearing in the final stages of a bubble. Prices accelerate away from fundamentals and tend to end in a sharp crash. History shows many bubbles with this pattern, including the dot-com bubble of 2000 and the real estate bubble before the 2008 financial crisis.

“As for gold, I don’t think now is the time,” Hong Hao states clearly. “If you’re discussing when to buy back in now, you’re essentially believing the bubble has fully burst and been completely digested — which is impossible.” His reasoning is that the bubble has not yet been fully absorbed, noting that gold has only fallen about 10%. He suggests that a serious bubble might first fall by a third, then rebound, and then fall again, gradually deflating.

This view is based on historical bubble burst patterns. Typically, bubbles don’t burst all at once but go through multiple waves of decline and rebound, each attracting new bottom-fishers before falling further. This stair-step decline can last months or even years, until all profits and illusions are wiped out.

“If you think it’s a bubble burst, then it should be below $2,000,” Hong Hao provides a specific price target, implying at least a 20% downside from current levels. This judgment is crucial because it influences whether investors see gold’s trend as a healthy correction within an uptrend or the start of a collapse. Hong Hao admits he can’t make a definitive call now but prefers to wait cautiously.

Bitcoin approaching four-year cycle peak; opportunity in Q3 next year

(Source: TradingView)

Hong Hao’s analysis of Bitcoin is based on its unique four-year halving cycle. “Bitcoin is nearing the top of its four-year cycle, so even if it hits new highs, they probably won’t be much higher than around $115,000 — previously, it reached about $125,000. I think that’s about it for this year.”

Bitcoin’s four-year cycle stems from its built-in halving mechanism. Approximately every four years, the block reward is cut in half, reducing new supply. Historical data shows that within 12 to 18 months after each halving, Bitcoin’s price tends to reach a bull market peak. The last halving occurred in April 2024, so based on this pattern, the cycle’s top is likely in the second half of 2025 or early 2026.

“Typically, in a four-year cycle, the first year tends to decline, followed by two years of gains,” Hong Hao summarizes. If 2025 is the cycle’s peak year, then 2026 would be a correction year, with prices falling significantly. This cyclical pattern has repeated three times in Bitcoin’s history, each time with remarkable accuracy.

Bitcoin four-year cycle pattern

Half-year (Year 0): Supply reduction sparks anticipation, prices start to bottom

Year 1: Bull market begins, prices accelerate

Year 2: Reach cycle high, then begin correction

Year 3: Bear market bottom, prices fall sharply and consolidate

“So I’ll wait — probably until the end of Q3 next year,” Hong Hao states clearly. That would be around September 2026, roughly 28 months after the April 2024 halving, which should mark the start of a cyclical correction. This timing isn’t based on price levels but on the cycle’s timeline.

“Bitcoin will definitely see a significant pullback, but the halving then will be a buying opportunity. The key is that no one knows the exact timing — it’s about the cycle, not the price,” he emphasizes. The investment philosophy here is that timing based on cycles is more important than chasing specific price points. Even if prices seem cheap now, if the asset is in the wrong phase of its cycle, it could continue to decline.

“Jumping in now, because liquidity is strong and everyone expects easing from central banks, is risky. But the halving is programmed into the code — it happens every four years, no matter the macro environment,” Hong Hao reminds investors not to be misled by short-term liquidity narratives.

Patience beats chasing highs; the most important trait for investors

Throughout the interview, Hong Hao repeatedly emphasizes patience. “I believe the most important trait for good investors isn’t just diligent thinking but the ability to endure loneliness,” he says. This reveals a core principle of successful investing: often, the best strategy is to do nothing and wait for the right opportunity.

“Of course, making money is great, but don’t forget — don’t be greedy. There are many good investment opportunities out there,” he advises. Investors should avoid panic when missing out on certain moves. Markets will always present new opportunities; the key is to stay calm, keep sufficient cash on hand, and wait for higher-confidence setups.

For gold and Bitcoin, the two hottest assets right now, Hong Hao’s advice is “wait.” While this may frustrate short-term traders eager to capitalize on every move, his long-term risk-adjusted perspective suggests that avoiding buying at the top is often more profitable than chasing every rally. As Warren Buffett famously said, “The first rule of investing is: don’t lose money. The second rule is: don’t forget the first.”