Has Bitcoin's Four-Year Cycle Evolved or Broken in 2025?

The Bitcoin four-year cycle-a framework rooted in halving events, accumulation phases, and cyclical bull markets-has long served as a cornerstone for understanding the cryptocurrency's price dynamics. However, 2025 has emerged as a pivotal year, marked by structural shifts that challenge traditional assumptions. As Bitcoin closed in red for the year, debates intensified over whether the cycle remains intact or has been fundamentally reshaped by institutional adoption, regulatory clarity, and evolving on-chain behavior. This analysis explores how miner dynamics, Digital Asset Treasury (DAT) accumulation, on-chain holder divergence, and reduced volatility are redefining the narrative, and whether a new multi-year bullish phase is emerging for strategic investors.

Structural Shifts in Miner Behavior and Market Dynamics

Bitcoin's four-year cycle has historically been driven by miner behavior, particularly their need to sell BTC to fund operational costs. In 2025, however, structural pressures accelerated this dynamic. Rising electricity prices, exacerbated by the expansion of AI data centers, forced small and mid-sized miners to liquidate holdings earlier than expected, triggering widespread capitulation. Simultaneously, the unwinding of the basis trade-a strategy historically supported by elevated Bitcoin futures premiums-was rendered unattractive after the launch of spot Bitcoin ETFs in 2023. Traders began selling ETF exposure, compounding downward price pressure.

Despite these shifts, the 2025 peak at approximately $126,000 aligned with historical cycle patterns, suggesting the traditional framework remains intact. However, the absence of a classic blow-off top and the influence of institutional capital-via ETFs and DATs-have altered the trajectory. Analysts now project a 50–55% peak-to-trough decline as the bear phase progresses, signaling a more mature, less volatile market.

DAT Accumulation and On-Chain Holder Divergence

On-chain data reveals a stark divergence between long-term and medium-term holders. Long-term holders (>5 years) have maintained their positions, while medium-term holders (1–5 years) have actively sold BTC. As of November 2025, the portion of Bitcoin's supply inactive for over one year dropped to 52%, down from 61% in early 2024. This shift reflects a redistribution of supply, with short-term holder activity increasing by 34%, largely absorbed by spot Bitcoin ETFs and DATs.

DATs, in particular, have emerged as key players. In mid-December 2025, they added 42,000 BTC to their holdings-the largest accumulation since July 2025. This contrasts with the declining holdings of Bitcoin ETP investors, who saw a -120 basis point monthly decline in BTC holdings. The institutional absorption of redistributed supply underscores a structural transition, where DATs and ETFs act as stabilizing forces amid market fragility.

Reduced Volatility and the Rise of Institutional Adoption

Bitcoin's volatility has diminished significantly in 2025, driven by institutional adoption and regulatory clarity. The U.S. SEC's approval of spot Bitcoin ETFs and legislation like the GENIUS Act have attracted major financial players, including Wells Fargo, which invested $383 million in Bitcoin. Meanwhile, the U.S. strategic Bitcoin reserve-estimated at 233,736 BTC-has shifted from liquidation to preservation, reflecting policy favor for holding Bitcoin as a strategic asset.

Corporate balance sheets, including those of stablecoin issuers and listed companies, have also quietly accumulated Bitcoin, reducing freely tradable supply. These factors have created a scenario where even a 30% drawdown from the October 2025 peak did not trigger panic, as structural demand continues to absorb supply. The Federal Reserve's December 2025 uncertainty introduced volatility, but the broader liquidity backdrop remains favorable compared to the 2022 bear market.

A New Bullish Narrative for 2026?

While the traditional four-year cycle is not "broken," it is evolving. The convergence of supply constraints-driven by the March 2026 halving-and rising institutional demand is expected to create upward pressure on Bitcoin's price. Grayscale predicts Bitcoin could surpass its previous all-time high in 2026, while Bitwise CIO Matt Hougan argues structural changes-such as declining volatility and falling correlations with equities-will push Bitcoin to new highs.

The 2026 cycle is likely to be defined by on-chain financial services, tokenization of real-world assets, and further regulatory integration. Bipartisan crypto market structure legislation in the U.S. is expected to accelerate institutional adoption, while ETF inflows-despite late-2025 redemptions- have attracted over $21 billion in cumulative net inflows since their launch.

Conclusion: Evolution, Not Collapse

Bitcoin's four-year cycle in 2025 has not collapsed but has evolved to reflect a maturing market. Structural shifts in miner behavior, DAT accumulation, and on-chain holder divergence signal a transition from retail-driven volatility to institutional-led stability. While the bear phase may persist through mid-2026, the underlying fundamentals-regulatory clarity, strategic reserves, and tokenization-suggest a new "super cycle" is emerging. For strategic investors, the focus should shift from cyclical timing to structural adoption, as Bitcoin's role in global finance continues to redefine itself.