The End of Bitcoin's 4-Year Cycle Theory?

What is the Bitcoin 4-Year Cycle?

There's a theory that has long been believed in the Bitcoin community: the 4-year cycle theory. Bitcoin undergoes a 'halving' approximately every 4 years, where mining rewards are cut in half. Historically, Bitcoin has recorded all-time highs within 12-18 months after each halving.

Looking Back at Past Cycles

2012 Halving → 2013 peak at $1,100
2016 Halving → 2017 peak at $20,000
2020 Halving → 2021 peak at $69,000
2024 Halving → 2025 ???

Investors who believed in this pattern expected Bitcoin to reach new all-time highs in the second half of 2025 or first half of 2026, following the April 2024 halving.

Signs That the 4-Year Cycle is Breaking Down

However, the 2024-2025 market is showing different patterns from the past.

1. Early Rally

In the past, prices would consolidate before halving and then rally significantly afterward. But in 2024, all-time highs were already broken before the halving. The primary cause was institutional capital inflow following the Bitcoin spot ETF approval (January 2024).

2. Reduced Volatility

In past cycles, Bitcoin experienced 80-90% crashes from peaks. However, the correction magnitude in recent cycles has been gradually decreasing. This is a signal that the market is maturing.

3. Changing Supply Dynamics

The reason halving affects price is due to reduced new supply. However, current daily mining output is only about 450 BTC, which is less than what ETFs purchase in a single day. Demand-side factors now dominate supply-side factors.

Institutional Investment: The Game Changer

What has fundamentally changed the Bitcoin market structure is the arrival of institutional investors.

ETF Impact

Since the US SEC approved Bitcoin spot ETFs in January 2024:

BlackRock's IBIT broke $50 billion AUM in record time
Total Bitcoin ETF holdings exceed 1 million BTC
Average daily net inflows range from tens to hundreds of millions of dollars

Bitcoin price is now more influenced by institutional asset allocation decisions than by retail FOMO or halving narratives.

Corporate Balance Sheet Adoption

Led by MicroStrategy (now Strategy), several companies are adding Bitcoin to their balance sheets. Tesla, Block (formerly Square), and recently some traditional companies have joined in.

New Market Structure: Supercycle vs. Gradual Appreciation

The end of the 4-year cycle theory presents two scenarios:

Scenario 1: Supercycle

The view that we've entered a supercycle with continuous upward movement instead of the past boom-bust pattern. Evidence includes steady institutional capital inflows, inflation hedge demand, and established status as digital gold.

Scenario 2: Long-term Gradual Appreciation

The forecast that Bitcoin will become a mature asset like gold, showing stable annual growth of 10-20%. While dramatic 10x or 100x gains become harder, downside risk also decreases accordingly.

Investment Implications for Bitcoin in 2026

Don't Bet on Halving: Expecting past patterns to repeat is risky
Watch Macro Environment: Interest rates, dollar index, and risk appetite are more important
Track Institutional Trends: Monitor ETF inflows/outflows and corporate purchase announcements
Maintain Long-term Perspective: DCA (Dollar Cost Averaging) strategy that isn't swayed by short-term fluctuations
Adjust Portfolio Allocation: Consider rebalancing in line with reduced volatility

Conclusion

The Bitcoin 4-year cycle theory was a useful framework based on historical data, but market structure has fundamentally changed. With ETFs, institutional investment, and regulatory clarity, Bitcoin is no longer a speculative asset for a small group of enthusiasts.

Bitcoin investment now requires a more sophisticated approach that reads global macroeconomics and institutional capital flows, rather than simply "waiting until the next halving to buy." The end of the 4-year cycle signifies Bitcoin's maturation, which may actually be a positive signal for long-term investors.