Analysts Say Bitcoin’s 4-Year Cycle Theory is Over as Whale Strategy Changes
The traditional notion that Bitcoin’s price follows a predictable four-year cycle after each halving event may no longer hold true, according to recent analyses by experts at CryptoQuant and Bitwise. These analysts suggest that the landscape of the market has shifted due to the increasing involvement of institutional investors.
In a recent publication, CryptoQuant CEO Ki Young Ju declared the demise of the “Bitcoin cycle theory,” highlighting a shift in the behavior of large holders, or whales. Instead of selling their Bitcoin at peak prices to retail investors, as seen in previous cycles, whales are now offloading their assets to more stable long-term investors. This change, Ju argues, is a result of the growing institutional adoption of Bitcoin, which has led to a shift in market dynamics.
This shift has significant implications for traditional trading strategies that rely on cyclical retail behavior. Ju acknowledged that his earlier prediction about the end of a bullish cycle was inaccurate, attributing his misjudgment to the changing dynamics brought about by institutional involvement in the market. With the growing number of long-term holders outnumbering traders, the traditional market cycles may no longer be as relevant as they once were.
Despite doubts about the durability of Bitcoin’s four-year cycle, some market observers remain skeptical. Matt Hougan, the chief investment officer at Bitwise, noted that the factors driving previous cycles are now weaker. The impact of halving events, which historically had a significant influence on Bitcoin’s price movements, has been diminishing with each iteration. Additionally, external factors such as interest rates and regulatory risks have softened over time.
Hougan pointed to larger long-term trends shaping the market, including the inflow of money into spot exchange-traded funds (ETFs), growing interest from institutional investors, and the gradual integration of Wall Street into the crypto space. Regulatory developments, like the recent passage of the GENIUS Act in the United States, are further reshaping the landscape for cryptocurrencies.
While some experts had anticipated another explosive “super-cycle” for Bitcoin, Hougan suggests that the future may hold a more sustained and steady growth pattern. The passage of key legislation and the increasing involvement of institutional players in the market are indicative of a new era for Bitcoin and cryptocurrencies as a whole.
In conclusion, the traditional four-year cycle theory that once guided Bitcoin’s price movements may no longer be as reliable in the current market environment. The increasing participation of institutional investors, regulatory developments, and shifting dynamics among market participants are reshaping the landscape for cryptocurrencies, pointing towards a new era of growth and stability in the market.
