Original Author: Andjela Radmilac
Translated by Luffy, Foresight News
The Bitcoin four-year cycle used to be a comfort for participants in the crypto market. Even those who claimed not to believe in this pattern consistently followed it in their actual trading activities.
Every four years or so, the supply of new bitcoins is halved. The market remains relatively calm for several months, but then liquidity begins to flow in, leveraged funds follow, retail investors rediscover their wallet passwords, and the Bitcoin price chart starts a new surge toward making fresh all-time highs.
Asset management company 21Shares outlines the contours of this familiar script with a set of straightforward data points: In 2012, Bitcoin rose from about $12 to $1,150, followed by an 85% pullback; in 2016, it climbed from around $650 to $20,000, then crashed by 80%; in 2020, it surged from approximately $8,700 to $69,000, before retreating by 75%.
Therefore, when the argument that "cycles are dead" became widely popular toward the end of 2025, the market was rattled because this sentiment did not merely originate from retail crypto investors, but was also widely disseminated by institutional players: Bitwise suggested that 2026 might break the traditional cycle pattern, Grayscale stated outright that the crypto market has entered a new institutional era, and 21Shares explicitly questioned whether the four-year cycle is still valid.
From these widely discussed opinions, we can extract a core fact:The Bitcoin halving remains a certainty and will continue to be an influential force in the market; however, it is no longer the sole factor determining the rhythm of Bitcoin's price movements.
This does not mean the end of the cycle, but rather that there are now countless "clocks" in today's market, each operating at different speeds.
The old cycle was once the "Lazy Person's Calendar," but now it has become a mental trap.
The Bitcoin halving cycle has never possessed any real magic; its effectiveness lies solely in consolidating three core logics into a clear point in time: reduced new coin supply, a narrative anchor for the market, and a shared focal point for investor positioning. This "calendar" helps the market overcome the challenge of coordinating capital.
Investors need not delve deeply into liquidity models, the mechanics of cross-asset financial systems, or even figure out who the marginal buyers are. They simply need to point to this once-every-four-years critical juncture and say, "Just be patient."
Yet this is precisely why the old cycle has become a mental trap. The clearer the script, the easier it is to foster a singular trading mindset: positioning in advance for halving events, waiting for price surges, selling at highs, and buying at bottoms during bear markets. When this operational model can no longer deliver clear, substantial profits as expected, the market's response becomes extreme: either firmly believing the cycle still dominates everything, or concluding that the cycle has already died.
Both of these perspectives seem to overlook the real changes occurring in the structure of the Bitcoin market.
Today, the group of Bitcoin investors has become more diverse, and investment channels have become closer to traditional financial markets. The core venues for price discovery are increasingly aligning with mainstream risk asset markets. State Street Bank's interpretation of institutional demand confirms this trend: Bitcoin exchange-traded products (ETPs) have achieved regulatory compliance, and this "familiar financial instrument" effect is influencing the market. Meanwhile, Bitcoin remains the largest core asset by market capitalization in the cryptocurrency market.
Once the core forces driving the market change, its rhythm of operation will also adjust accordingly. This is not because the effect of halving has become ineffective, but because it now has to compete with other forces, which may have a greater influence than halving for a prolonged period.
Policies and ETFs Emerge as New Rhythm Controllers
To understand why old cycles have largely lost their reference value today, we need to start with the part of the story least related to "crypto": the cost of capital.
On December 10, 2025, the Federal Reserve lowered its target range for the federal funds rate by 25 basis points to 3.50%-3.75%. A few weeks later, Reuters reported that Federal Reserve Governor Stephen Miller advocated for more aggressive rate cuts in 2026, including the possibility of reducing rates by 150 basis points throughout the year. At the same time, China's central bank also stated that it would maintain reasonably ample liquidity in 2026 through measures such as lowering the reserve requirement ratio and interest rates.
This means that when the global financing environment tightens or loosens, the group of buyers who are both able and willing to hold high-volatility assets will also change, and this sets the tone for the performance of all assets.
When combined with the impact of spot Bitcoin ETFs, the narrative of a four-year cycle appears even more one-sided.
Undoubtedly, spot ETFs have introduced a new group of buyers to the market, but more importantly, they have changed the nature of demand. Under the ETF product structure, buying pressure is reflected in the creation of fund shares, while selling pressure is manifested in the redemption of fund shares.
Factors driving these capital flows may have nothing to do with Bitcoin halving: portfolio rebalancing, risk budget adjustments, cross-asset price declines, tax considerations, wealth management platform approval timelines, and a slow distribution process.
The importance of this last point is far greater than people realize. Bank of America announced that starting January 5, 2026, it will expand the authority of its financial advisors to recommend cryptocurrency ETP (Exchange Traded Products). This seemingly routine access adjustment, in fact, changes the scope of potential buyers, investment methods, and compliance constraints.
This also explains why the argument that "cycles are dead," even in its most compelling formulations, has obvious limitations. The argument does not deny the impact of halving events, but rather emphasizes that they can no longer determine the market's rhythm on their own.
Bitwise's overall outlook for the 2026 market is based precisely on this logic: macroeconomic policies are crucial, and investment channels are equally important. When marginal buyers come from traditional financial channels rather than native crypto channels, market performance will also be significantly different. 21Shares also expressed a similar view in its cycle-focused analysis report and "2026 Market Outlook," suggesting that institutional integration will become a core driver for future crypto asset trading.
Grayscale has gone a step further, defining 2026 as the year in which the crypto market deeply integrates with the structure and regulatory framework of the U.S. financial system. In other words, the current crypto market is now more closely embedded in the day-to-day operations of the traditional financial system.
If we want to redefine the cycle patterns of Bitcoin, the simplest approach is to view them as a set of "regulatory indicators" that change on a weekly basis.
The first set of indicators is the policy path: it is not only about monitoring interest rate increases or decreases, but also about considering marginal changes in the tightness or looseness of the financial environment, as well as whether the pace of related market narratives is accelerating or slowing down.
The second indicator is the ETF (Exchange-Traded Fund) capital flow mechanism, as the creation and redemption of fund shares directly reflect the actual inflows and outflows of market demand through this mainstream new channel.
The third indicator is the distribution channels—specifically, which entities are permitted to make large-scale purchases and under what constraints. When access thresholds for major wealth management channels, brokerage platforms, or model investment portfolios are lowered, the buyer base will expand gradually and mechanically, with an impact far greater than a single day's surge in market enthusiasm. Conversely, when access is restricted, the channels for capital inflow will also narrow accordingly.
In addition, there are two indicators used to measure the internal state of the market. One is the volatility feature, which determines whether prices are driven by stable two-way trading or by market stress, the latter often accompanied by rapid sell-offs and liquidity dry-up, typically triggered by forced deleveraging.
Second, the health of market positions—observing whether leveraged funds are being accumulated patiently or piling up excessively, leading to increased market fragility. At times, the Bitcoin spot price may appear stable, but the underlying position structure could already be overly crowded, hiding risks. Conversely, there are times when the price movement seems chaotic, yet leverage is quietly being reset, and market risks are gradually being released.
Overall, these indicators do not negate the significance of halvings, but rather place them within a more appropriate structural context. The timing and patterns of Bitcoin's major price movements are increasingly determined by liquidity, the flow of capital, and the concentration of risk in a single direction.
Derivatives transform cyclical peaks into risk transfer markets.
The third clock is largely ignored by most cyclical theories because it is harder to explain: derivatives.
In the past retail-driven "rampant rise - sharp fall" pattern, leverage acts like a party that spirals out of control toward the end.
In markets with higher institutional participation, derivatives are no longer a secondary investment option but a core channel for risk transfer. This changes the timing of how market pressures emerge and the ways they are resolved.
In its January 2026 Chain Weekly Report, on-chain analytics firm Glassnode noted that the crypto market has completed its year-end position reset, with profit-taking activities easing. Key cost benchmark levels have become important indicators for confirming whether the market can sustain a healthy upward trend.
This stands in sharp contrast to the market sentiment during the peak phase of traditional business cycles, when the market often desperately seeks justifications for vertical price surges.
Indeed, derivatives have not eliminated market manias, but they have significantly altered the way these manias begin, develop, and end.
Options instruments allow large holders to express their views while locking in downside risk, while futures instruments can alleviate spot market selling pressure through hedging. Although liquidation chain reactions will still occur, they may happen earlier, completing position unwinding before the market reaches its final euphoric peak. Ultimately, Bitcoin's price movement may manifest as a repeated cycle of "risk release - rapid rally."
For this very reason, public disagreements among major financial institutions become valuable rather than confusing.
On one hand, Bitwise proposed the view of "breaking the four-year cycle pattern" by the end of 2025; on the other hand, Fidelity Investments believes that even if 2026 may become a "consolidation year," the Bitcoin cycle pattern has not been broken.
Such a divergence does not necessarily mean that one side is correct while the other is foolish. What we can be certain of is that the old cycle is no longer the sole analytical model available. The reasonable differences among various analytical frameworks exist because the factors influencing the market have become increasingly diverse, now covering multiple dimensions such as policy, capital flows, position arrangements, and market structure.
So, what complex picture will the future of the Bitcoin cycle present?
We can summarize them into three trend scenarios. Although they are too mundane to become popular market buzzwords, they all have practical reference value for trading and investment:
- Cycle extension: Halving still has an impact, but the timing of the price peak will be delayed, as liquidity injection and product distribution require more time to be transmitted through traditional financial channels to the market.
- Consolidation and a Gradual Uptrend: Bitcoin will take more time to digest the supply shocks and position adjustment pressures. Only when capital flows and policy directions align will the price initiate a trend-driven movement.
- Macro shocks dominate: Policy adjustments and cross-asset market pressures will remain predominant for a period. In the face of fund redemptions and market deleveraging, the impact of the halving event will become relatively insignificant.
If one were to draw a clear conclusion from all of this, it would be that:Claiming that the four-year cycle is dead is merely a clever-sounding yet meaningless shortcut argument.
The better and only rational approach to the Bitcoin cycle is to acknowledge that today's market operates with multiple clocks. The winners in 2026 will not be those who rigidly adhere to a single timeline, but rather those who can read the market's "operational dynamics"—understanding changes in funding costs, grasping the flow of capital in and out of ETFs, and detecting the quiet accumulation and concentrated release of risks in the derivatives market.