Bitcoin (CRYPTO: BTC) is coming off a 40% gain in Q3, and Abra CEO Bill Barhydt sees room for another major leg higher.

Scarcity, improving market structure and the liquidity cycle strengthen his case for the world's largest cryptocurrency.

Why Q4 Could Favor BTC

Speaking with Scott Melker onWednesday, Barhydt cautioned against assuming the traditional four-year cycle will repeat exactly but still predicts an "epic run" over the next 18 months.

He noted that the asset posted its best quarterly return in almost two years, trading above major moving averages and making its higher high.

Santiment data highlighted Bitcoin outperformed traditional assets in September, while the S&P 500 was flat and gold fell more than 6%.

Strong spot Bitcoin ETF inflows, Strategy's 1,665 BTC purchase and improving macro conditions helped fuel the rally.

Meanwhile, Barhydt's thesis rests on Bitcoin's fixed scarcity against an expanding supply of fiat money.

He argued that Bitcoin's guaranteed scarcity becomes increasingly valuable as governments continue expanding the money supply.

What Makes This BTC Rally Different

Another factor separating the current move from more speculative crypto rallies is leverage.

While Melker pointed to Bitcoin's strong quarterly performance occurring alongside lower leverage, Barhydt suggested this could reflect a shrinking amount of BTC readily available for trading relative to its total supply.

He expects that dynamic to produce comparatively lower BTC volatility while speculative altcoins experience much larger swings.

Bitcoin's gains also tend to arrive in concentrated bursts rather than through steady appreciation, meaning periods of consolidation do not necessarily undermine the broader trend.

Altcoins Offer Upside, But With Higher Risk

Barhydt remains bullish on select altcoins, particularly Layer-1 networks supporting DeFi, as narratives around AI, apps and meme coins rotate into focus.

However, he warned that even major L1 tokens can suffer 90% drawdowns, and thus favoring long-term exposure to blockchain infrastructure rather chasing the next 100x token.