Bitcoin's Four-Year Cycle Faces Disruption from ETFs and Macro Trends
Bitcoin has long followed predictable four-year cycles driven by its halving events, where supply reductions typically trigger bull markets peaking 12-18 months later, followed by extended bear phases. However, the cryptocurrency’s trajectory is showing signs of deviation in the current cycle, influenced by institutional adoption and macroeconomic shifts, potentially extending the bull phase beyond traditional patterns.
Traditional Cycle Patterns Under Pressure
Bitcoin’s price history has been marked by halvings that halve mining rewards every 210,000 blocks, historically leading to supply squeezes and price surges. The April 2024 halving followed this script, with BTC reaching a peak of approximately $126,200 in October—precisely 18 months post-event—before a correction exceeding 30%. This aligns with prior cycles, such as the 2020 halving that preceded a surge to nearly $69,000, followed by a multi-year downturn. Yet, analysts like Peter Brandt have warned of a potential drop to $25,000, citing parabolic breakdowns reminiscent of past bear markets. On-chain metrics support this caution: Jou00e3o Wedson, founder of Alphractal, highlighted the Spent Output Profit Ratio (SOPR) Trend Signal, which tracks profit versus loss realizations. In bull markets, SOPR remains above 1 during profit-taking phases, often signaling local tops. It dips below 1 near bottoms, indicating capitulation. Currently trending lower, SOPR shows BTC being spent at reduced profits or losses, reinforcing cycle-based bearish views.
- Historical Peaks and Declines: Post-2012 halving, BTC peaked at $1,150 (12 months later); post-2016, $19,800 (17 months); post-2020, $69,000 (18 months).
- Current Metrics: As of December, SOPR below 1 suggests ongoing loss realization, with sustained recovery above 1 historically marking rebounds.
Wedson emphasized the persistence of these patterns:
“You may believe that Bitcoin’s cycles have changed and that this time is different. But, onchain analysis reveals that BTC continues to follow its fractal cycle, just as it did before, nothing has changed so far.”
Institutional Demand Altering the Narrative
Despite these signals, institutional inflows are challenging the cycle’s rigidity. Grayscale Investments predicts a new all-time high by mid-2026, driven by fiat currency risks from rising public debt and inflation. U.S. federal debt as a share of GDP has surged, prompting interest in scarce assets like Bitcoin as a portfolio hedge.
“Fiat currencies (and assets denominated in fiat currencies) face additional risks due to high and rising public sector debt and its potential implications for inflation over time. Scarce commodities—whether physical gold and silver or digital Bitcoin and Ether—can potentially serve as a ballast in portfolios for fiat currency risks.”
U.S. spot Bitcoin ETFs, launched in January 2024, now hold over 1.30 million BTC (valued at ~$114.13 billion), a 309% increase year-to-date. Public companies’ treasuries have amassed 1.08 million BTC (~$100.42 billion), a cohort absent in pre-2020 cycles. BlackRock and Fidelity are key players, with miners’ influence waning post-halving. Fidelity Digital Assets’ Chris Kuiper echoed this, suggesting a “supercycle” akin to 2000s commodity booms, fueled by traditional investors:
“We’ve seen traditional money managers and investors begin to buy Bitcoin and other digital assets. I think we’ve only scratched the surface in terms of the possible amount of money that they could bring into this space.”
| Metric | Value (December 2025) | Change Since Jan 2024 | |————————-|———————–|———————–| | US Bitcoin ETF Holdings | 1.30M BTC (~$114.13B) | +309% | | Corporate Treasuries | 1.08M BTC (~$100.42B) | N/A (Pre-2020: Minimal) | These trends indicate a shift from retail-driven cycles to sustained institutional demand, potentially delaying the bear phase.
Key Takeaways from Cycle Analysis
- ETFs and Treasuries: Institutional buying via ETFs and corporate balances could extend bull runs, flipping new supply dynamics for the first time in six weeks.
- Macro Tailwinds: Currency debasement and regulatory support in the U.S. bolster Bitcoin’s role as an inflation hedge.
- Bearish Risks: A correction remains possible, with SOPR signaling potential further downside before highs.
As Bitcoin navigates this evolving landscape, the interplay of traditional cycles and new institutional forces raises questions about the asset’s future trajectory. What could this mean for the future of cryptocurrency markets, especially as global adoption accelerates?
