Is Bitcoin's 4-Year Cycle Over? Why BTC May Finally Break the Trend
News Summary
The cryptocurrency industry is currently debating whether Bitcoin will break its traditional four-year cycle, which typically sees the asset soar one year after its halving and then experience a 70-80% crash the following year. Analysts suggest that the approval of spot Bitcoin ETFs has brought new institutional investors, such as Harvard University and Goldman Sachs, into the market. These investors are considered more stable, long-term holders, whose participation has reduced market volatility and may disrupt past cyclical patterns. Bitcoin hit a new all-time high before its 2024 halving and surged again following President Donald Trump's re-election in 2025, recently trading at $115,492 and peaking at $124,128. Bloomberg Intelligence Senior ETF Analyst Eric Balchunas and Bitwise's Europe Head of Research André Dragosch believe ETFs have initiated a new phase for Bitcoin, with macro- and demand-related factors becoming increasingly important due to its integration into the global financial system, while the halving's performance effect is declining. Conversely, other experts, including a CoinGlass report and Luxor CEO Nick Hansen, disagree. They point out that current price movements mirror previous cycles (2015-2018 and 2018-2022) and indicate signs of fatigue in capital inflows. Long-term holders have realized profits comparable to past euphoric phases, suggesting the market may still be late in its cycle.
Background
Bitcoin has historically followed a four-year cycle where its price soars one year after its 'halving event' and then crashes the following year. The halving is a pre-programmed mechanism in the Bitcoin protocol that occurs approximately every four years, reducing the reward for mining new bitcoins by half, thereby decreasing the supply of new BTC. This supply shock has traditionally been seen as a key driver of price appreciation. However, the approval of spot Bitcoin ETFs (Exchange-Traded Funds) in January 2024 introduced a new dynamic, allowing significant institutional capital to flow into the cryptocurrency market. Furthermore, the re-election of crypto-friendly President Donald Trump in November 2024 has added new optimism and potential policy support to the market.
In-Depth AI Insights
Is Bitcoin's four-year cycle truly broken, or is the market simply experiencing a 'delayed' bull run? - On the surface, the introduction of ETFs and institutional participation seems to have altered Bitcoin's market structure, making it more stable and reducing 'vomit-inducing' drawdowns. This could mean the market is no longer solely driven by retail sentiment but possesses stronger fundamental support. - However, historical similarities should not be underestimated. Every time market participants believe 'this time is different,' history often repeats itself. The CoinGlass report notes that current capital inflow fatigue and long-term holder profit-taking resemble euphoric phases of past cycles. This suggests that even with new capital inflows, the deeper psychological and speculative nature of market behavior may not have fundamentally changed, but rather the cycle might be extended or its peak delayed. Beyond ETFs and institutional funds, what deeper macro or geopolitical factors might be influencing Bitcoin's cyclical behavior? - Macroeconomic Integration: Bitcoin's increasing integration into the global financial system means its price may become more sensitive to traditional macroeconomic factors (e.g., inflation expectations, interest rate policies, USD trends) rather than solely its internal halving events. This makes Bitcoin more akin to 'digital gold' or a risk asset, with its volatility closely tied to global liquidity and risk appetite. - Regulatory Environment & Political Influence: President Donald Trump's 'crypto-friendly' stance could lead to a clearer and more supportive regulatory framework, further accelerating institutional adoption and mainstream acceptance. Policy certainty can reduce the uncertainty premium for investors, attracting more conservative capital, thereby smoothing price volatility, but also potentially making it more susceptible to traditional political and economic cycles. - Global Digital Asset Competition: As central bank digital currencies (CBDCs) and institutional stablecoins develop, Bitcoin's narrative as a decentralized digital asset may face new competition and scrutiny. These developments could alter the landscape of the digital asset market in the long term, affecting Bitcoin's unique position and value proposition. How should investors evaluate the risks and opportunities in Bitcoin's 'new phase'? - Opportunities: Institutionalization and mainstream adoption may confer greater legitimacy and lower tail risk to Bitcoin, positioning it as a more reliable long-term store of value or a component of diversified investment portfolios. Policy support and technological innovation could further expand its use cases and user base. A long-term holding strategy might be more appealing in this context. - Risks: Despite potentially reduced volatility, Bitcoin is not immune to systemic risks. A global economic recession, unexpected geopolitical events, or unforeseen regulatory crackdowns could still trigger significant drawdowns. Furthermore, if the 'this time is different' narrative proves to be another manifestation of market euphoria, the risk of a historical crash remains. Investors need to closely monitor on-chain data, macroeconomic indicators, and global regulatory developments for prudent risk management.