Is Bitcoin’s Four-Year Market Cycle Ending in 2025? Key Factors Explained

Bitcoin’s historically consistent four-year market cycle, closely tied to its halving events, faces new dynamics as institutional investment and regulatory frameworks evolve. With the next halving expected in 2024-2025, questions arise about whether these structural changes are reshaping or even disrupting the traditional cycle.

What happened

Bitcoin’s price movements have traditionally followed a roughly four-year cycle, anchored by its halving events that reduce the issuance rate of new coins. These halvings typically trigger supply shocks followed by bull markets and subsequent corrections. The most recent halving occurred in May 2020, positioning 2024-2025 as the next anticipated peak or transition period in the cycle.

Since the 2020 halving, institutional participation in Bitcoin markets has increased notably. The launch of the ProShares Bitcoin Strategy ETF (BITO) in October 2021 marked the first U.S. Bitcoin-linked ETF, though it is based on futures contracts rather than spot Bitcoin. Meanwhile, Canada and Brazil have approved spot Bitcoin ETFs, reflecting divergent regulatory approaches globally.

In 2023, BlackRock, a major asset manager, filed for Bitcoin ETF products with the U.S. Securities and Exchange Commission (SEC), signaling growing mainstream institutional interest. However, the SEC has yet to approve any spot Bitcoin ETFs in the U.S., maintaining a regulatory environment where futures-based ETFs dominate.

Market data from 2021 to 2023 shows an increased correlation between Bitcoin and traditional financial markets, which some analysts attribute to institutional investors influencing price dynamics. This contrasts with earlier cycles when Bitcoin’s price movements were more isolated from broader market trends.

Commentators and analysts have interpreted these developments in various ways. Some argue that institutional participation and clearer regulatory frameworks could disrupt the four-year cycle by reducing volatility and changing investor behavior. The introduction of futures-based ETFs and potential spot ETF approvals may lead to more sustained inflows, flattening or elongating the cycle.

Conversely, others emphasize that the fundamental supply shock from halvings remains unchanged, suggesting the cycle will persist but with potentially modified timing or amplitude. Regulatory integration of Bitcoin into mainstream finance might also shift price influences toward macroeconomic factors and institutional flows rather than purely halving-driven supply constraints.

Why this matters

Understanding whether Bitcoin’s four-year market cycle is evolving or ending has implications for market participants, policymakers, and the broader financial ecosystem. The cycle has been a foundational framework for anticipating Bitcoin price trends, shaping investor expectations and strategies.

If institutional investment vehicles such as ETFs and evolving regulatory regimes diminish the halving’s price impact or alter volatility patterns, the traditional cycle may no longer provide reliable guidance. This could affect how Bitcoin is integrated into portfolios, risk management frameworks, and regulatory oversight.

Moreover, increased correlation with traditional markets suggests that Bitcoin may be becoming more entwined with global financial cycles, potentially reducing its role as a standalone or alternative asset. Regulatory clarity, particularly around spot ETFs, could further embed Bitcoin within mainstream finance, influencing liquidity, market depth, and price discovery mechanisms.

From a policy perspective, the interplay between regulatory decisions—such as the SEC’s stance on spot ETFs—and market structure will shape the trajectory of Bitcoin’s maturation as a financial asset. This is particularly relevant given jurisdictional differences, with some countries advancing approvals while others remain cautious.

What remains unclear

Despite these observations, several critical questions remain unanswered. There is no definitive data yet on how the approval of a U.S. spot Bitcoin ETF would affect the historic four-year price cycle, as no such product has been authorized to date.

The broader, collective impact of evolving global regulatory regimes—including the European Union’s Markets in Crypto-Assets (MiCA) framework and U.S. SEC policies—is not fully understood, particularly given varying jurisdictional approaches and enforcement priorities.

It is also unclear to what extent institutional investors will prioritize Bitcoin for long-term holdings versus short-term trading, a factor that could influence volatility and cycle length significantly but is not yet quantifiable.

Furthermore, there is a lack of established on-chain or market indicators that reliably signal a fundamental shift away from the traditional four-year cycle. The novelty of institutional involvement at this scale limits historical precedent, complicating efforts to isolate the effects of these structural changes from broader macroeconomic influences and geopolitical events.

Finally, while increased correlation with traditional markets is documented, it remains uncertain whether this represents a permanent structural change or a transient phenomenon linked to specific market conditions during 2021-2023.

What to watch next

• The SEC’s decisions regarding approval or rejection of spot Bitcoin ETFs in the United States, which could materially affect market structure and liquidity.
• Regulatory developments in key jurisdictions such as the European Union under MiCA and Brazil, particularly their influence on cross-border Bitcoin investment and fund flows.
• Market data on Bitcoin’s price correlation with traditional financial assets over the next few years, to assess whether institutional influence continues or recedes.
• Institutional investor behavior patterns, including filings, disclosures, and fund flows, to gauge the balance between long-term holdings and trading activity.
• Emerging on-chain analytics or market indicators that might provide early signals of a fundamental shift in Bitcoin’s price dynamics or cycle characteristics.

Bitcoin’s four-year market cycle remains a useful but increasingly complex framework as institutional involvement and regulatory developments reshape its context. While the fundamental supply constraints from halvings persist, the interplay with evolving market structures and policy environments introduces uncertainty about the cycle’s future form and relevance. Clarifying these dynamics will require close attention to forthcoming regulatory decisions, institutional behavior, and market data.

Source: https://cointelegraph.com/news/bitcoin-4-year-cycle-broken-or-is-it-bull-market?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.