Bitcoin News Today: Bitcoin's Four-Year Cycle Losing Grip as ETFs, Institutional Inflows, and Regs Reshape Market Dynamics

Bitcoin’s traditional four-year investment cycle is losing its grip as institutional forces and regulatory shifts reshape the market, according to Matt Hougan, chief investment officer at Bitwise. Once defined by predictable surges linked to Bitcoin halving events, the cryptocurrency’s price trajectory is now influenced by a new set of dynamics, including ETF adoption, interest rate trends, and evolving institutional participation [1].

Hougan notes that the halving mechanism—where new Bitcoin supply is cut by 50% every four years—has diminishing influence over time. In earlier cycles, such as 2016 and 2020, halving events coincided with price surges exceeding 150%. However, recent cycles have seen gains capped at under 50% in similar timeframes, as Bitcoin’s market cap has grown to hundreds of billions, diluting the impact of supply cuts [1]. Meanwhile, Federal Reserve rate policies, once a major driver of volatility, have shifted favorably for crypto. Unlike the 2018 and 2022 tightening cycles that triggered 72% and 69% price declines, respectively, current easing or paused rate environments have allowed Bitcoin to trend upward [1].

The rise of institutional infrastructure is another disruptor. Spot Bitcoin ETFs launched in January 2024 have drawn over $10 billion in net inflows, creating a steady capital flow that transcends the four-year cycle’s rhythm. Hougan emphasizes that pensions and endowments, many of which only recently began exploring crypto, operate on multi-year timelines. Their eventual large-scale entry could reshape markets far beyond retail-driven volatility [1].

Regulatory clarity has accelerated institutional adoption. Since January 2025, new custody rules, tax guidelines, and licensing regimes have reduced systemic risks, enabling banks and asset managers to integrate crypto services. The recent Genius Act further expanded opportunities, allowing prime-broker platforms to onboard billions in weeks. This institutional build-out, Hougan argues, will have lasting implications [1].

Yet new risks emerge alongside progress. Hougan warns of Treasury firms offering short-term lending and yield products without adequate safeguards. If these entities grow unchecked, they could trigger a market sell-off—a novel risk absent in prior cycles. Such developments highlight the need for continued regulatory vigilance [1].

Bitcoin’s trajectory now hinges on these evolving factors. Analysts like Kyle Chassé suggest the old four-year cycle is obsolete, with adoption and institutional participation driving a “super cycle” that could push prices higher in 2026. Early movers may see gains outpace traditional patterns, but the market’s complexity demands closer scrutiny of both opportunities and emerging vulnerabilities [1].

Source: [1] [Bitcoin’s New Clock: How Wall Street Killed The Old Cycle, According To Expert] [https://www.newsbtc.com/bitcoin-news/bitcoins-new-clock-how-wall-street-killed-the-old-cycle-according-to-expert/]