Original Author: Andjela Radmilac

Original Translation: Luffy, Foresight News

The four-year cycle of Bitcoin has been a source of reassurance for participants in the crypto market. Even those who claim not to believe in this pattern have consistently followed it in their trading operations.

Approximately every four years, the supply of new Bitcoin is halved. The market behaves calmly for several months, then liquidity begins to flow in, leveraged funds follow closely, retail investors recover their wallet passwords, and the Bitcoin price chart embarks on a new journey to challenge historical highs.

Asset management company 21Shares outlines this old script with a set of straightforward data: In 2012, Bitcoin rose from about $12 to $1,150, then corrected by 85%; in 2016, it climbed from about $650 to $20,000, then plummeted by 80%; in 2020, it surged from about $8,700 to $69,000, then fell back by 75%.

Therefore, when the rhetoric of "the cycle is dead" became rampant at the end of 2025, the market reacted because this voice did not only come from the crypto retail crowd but was also widely disseminated by institutions: Bitwise stated that 2026 might break the original cyclical pattern, Grayscale bluntly said that the crypto market has entered a new institutional era, and 21Shares explicitly questioned whether the four-year cycle still holds validity.

From these heated discussions, we can distill a core fact: Bitcoin halving remains a given, and will continue to be an undeniable force in the market, but it is no longer the sole factor determining the rhythm of Bitcoin price movements.

This does not mean the end of the cycle; it simply indicates that the current market has countless "timers," each operating at different speeds.

The Old Cycle Was Once a "Lazy Calendar," Now a Mental Trap

The Bitcoin halving cycle has never had any magic; its effectiveness is merely because it condenses three core logics into a clear time node: a reduction in new coin supply, a market narrative anchor, and a common focus for investor positioning. This "calendar" solved the problem of capital coordination for the market.

Investors did not need to delve into liquidity models or the operational mechanisms of cross-asset financial systems, nor did they need to figure out who the marginal buyers were; they simply pointed to this key node that occurs every four years and said, "Just be patient."

But 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: position ahead of the halving, wait for prices to soar, sell at the peak, and buy the dip in a bear market. When this operational model can no longer deliver clear and substantial returns as expected, the market's reaction turns extreme: either firmly believing that the cycle still dominates everything or asserting that the cycle has indeed perished.

Both viewpoints seem to overlook the real changes occurring in the Bitcoin market structure.

Today, the investor base for Bitcoin is more diverse, investment channels are closer to traditional financial markets, and the core venues determining its price discovery are increasingly aligning with mainstream risk asset markets. State Street's interpretation of institutional demand corroborates this: Bitcoin exchange-traded products (ETPs) have achieved regulatory compliance, and this effect of "familiar financial instruments" is influencing the market, while Bitcoin remains the highest market cap core asset in the crypto market.

Once the core driving forces of the market change, its operational rhythm will adjust accordingly. This is not because the halving's effect has become ineffective, but because it now needs to contend with other forces, which may overshadow the halving for a long time.

Policy and ETFs Become New Rhythm Controllers

To understand why the old cycle has essentially lost its reference value, we need to start from the part of the story that is least related to "crypto": the cost of capital.

On December 10, 2025, the Federal Reserve lowered the target range for the federal funds rate by 25 basis points to 3.50%-3.75%. A few weeks later, Reuters reported that Fed Governor Stephen Milan advocated for more aggressive rate cuts in 2026, including considering a 150 basis point cut for the entire year. Meanwhile, the People's Bank of China also stated that it would maintain reasonable liquidity through methods such as reserve requirement ratio cuts and interest rate reductions in 2026.

This means that when the global financing environment tightens or loosens, the buyer group that can and is willing to hold high-volatility assets will also change, setting the tone for the movement of all assets.

Adding the impact of spot Bitcoin ETFs, the narrative of the four-year cycle appears increasingly one-sided.

Spot ETFs undoubtedly introduce a new group of buyers to the market, but more importantly, they change the form of demand. Under the ETF product structure, buying power is reflected in the creation of fund shares, while selling pressure manifests as the redemption of fund shares.

The factors driving these capital flows may have nothing to do with Bitcoin halving: asset portfolio rebalancing, risk budget adjustments, cross-asset price declines, tax considerations, approval processes for wealth management platforms, and slow distribution processes.

The importance of this last point far exceeds people's understanding. Bank of America announced that starting January 5, 2026, it will expand the authority of financial advisors to recommend cryptocurrency ETP products. This seemingly ordinary access adjustment actually changes the scope of potential buyers, investment methods, and compliance constraints.

This also explains why the rhetoric of "the cycle is dead," even in its most forceful expressions, has clear limitations. This rhetoric does not deny the impact of halving; it merely emphasizes that it can no longer independently determine the market's operational rhythm.

Bitwise's overall outlook for the 2026 market is based on this logic: macro policy is crucial, investment channels are vital, and when marginal buyers come from traditional financial channels rather than crypto-native channels, market performance will be entirely different. 21Shares expressed a similar view in its analysis report focusing on cycles and the "2026 Market Outlook," believing that institutional integration will become the core driving force for future crypto asset trading.

Grayscale goes further, defining 2026 as a year of deep integration between the crypto market and the structure and regulatory system of the U.S. financial market. In other words, today's crypto market is more closely integrated into the daily operations of the traditional financial system.

If we were to redefine the cyclical logic of Bitcoin, the simplest way would be to view it as a set of "regulatory indicators" that change weekly.

The first indicator is the policy path: not only focusing on the rise and fall of interest rates but also considering the marginal tightening or loosening of the financial environment, as well as whether the pace of related market narratives is accelerating or slowing.

The second indicator is the ETF capital flow mechanism, as the creation and redemption of fund shares directly reflect the real inflow and outflow of market demand through this mainstream new channel.

The third indicator is the distribution channel, which determines which entities are allowed to buy in large quantities and what constraints they face. When the entry barriers for large wealth management channels, brokerage platforms, or model portfolios are lowered, the buyer group will expand in a slow, mechanical manner, and its impact far exceeds the enthusiasm of a single day's market surge; conversely, when access is restricted, the channels for capital inflow will also narrow accordingly.

Additionally, there are two more indicators to measure the internal state of the market. One is the volatility characteristics, determining whether prices are driven by stable two-way trading or dominated by market pressure, the latter usually accompanied by rapid sell-offs and liquidity exhaustion, often triggered by forced deleveraging.

The second is the health of market positions, observing whether leveraged funds are being patiently accumulated or whether excessive piling up is leading to increased market vulnerability. Sometimes, the spot price of Bitcoin may seem stable, but the underlying position layout may be overly crowded, hiding risks; at other times, the price movement may appear chaotic, yet leverage is quietly resetting, and market risks are gradually being released.

In summary, these indicators do not deny the role of halving; they merely place it in a more appropriate structural context. The timing and shape of Bitcoin's major price movements are increasingly determined by liquidity, capital flow systems, and the concentration of risks in a single direction.

Derivatives Transform Cycle Peaks into Risk Transfer Markets

The third clock is often overlooked by most cyclical theories because it is harder to explain: derivatives.

In the past, the "surge - crash" model dominated by retail investors saw leverage acting like a party that spiraled out of control at the end.

In a market with higher institutional participation, derivatives are no longer a secondary investment choice but the core channel for risk transfer. This changes the timing and resolution of market pressure.

On-chain analytics company Glassnode pointed out in its "On-Chain Weekly Report" released in early January 2026 that the crypto market has completed its year-end position reset, profit-taking behavior has eased, and key cost benchmark levels have become important indicators for confirming whether the market can rise healthily.

This stands in stark contrast to the market atmosphere during the traditional cycle peak phase; at that time, the market often racked its brains to find reasons for the vertical price surge.

Indeed, derivatives have not eliminated market frenzy, but they have greatly changed the initiation, development, and conclusion of that frenzy.

Options tools allow large holders to express their views while locking in downside risks, while futures tools can alleviate spot selling pressure through hedging. Although clearing chain reactions can still occur, their timing may come earlier, completing position clean-up before the market reaches its final euphoric peak. Ultimately, Bitcoin's price movements may present a repeated cycle of "risk release - rapid surge."

For this reason, public disagreements among large financial institutions have become valuable rather than confusing.

On one hand, Bitwise proposed at the end of 2025 the idea of "breaking the four-year cycle pattern"; on the other hand, Fidelity Investments believes that even if 2026 may become a "year of consolidation," the cyclical pattern of Bitcoin has not been broken.

This disagreement does not mean that one side is correct and the other is foolish. What we can be certain of is that the old cycle is no longer the only available analytical model, and the existence of reasonable differences among different analytical frameworks is due to the increasing richness of market influencing factors, now encompassing multiple dimensions such as policy, capital flow, position layout, and market structure.

So, what complex appearance will the future of the Bitcoin cycle present?

We can summarize it into three potential scenarios, which, while too mundane to become market memes, possess actual trading and investment reference value:

• Extended Cycle: Halving still has an impact, but the timing of price peaks will be delayed because liquidity injection and product distribution will take longer to transmit to the market through traditional financial channels.
• Range-bound Fluctuation Followed by Gradual Uptrend: Bitcoin will take longer to digest supply shocks and position adjustment pressures, and only when capital flow and policy direction form a synergy will the price initiate a trend.
• Macro Shock Dominance: Policy adjustments and cross-asset market pressures will dominate for a period, and in the face of fund redemptions and market deleveraging, the impact of halving will become negligible.

If we were to extract a clear conclusion from all this, it would be: Claiming that the four-year cycle is dead is merely a seemingly clever but ultimately meaningless shortcut assertion.

The better and only reasonable approach to the Bitcoin cycle is to acknowledge that today's market has multiple clocks. The winners in the 2026 market will not be those who rigidly memorize a single time node, but those who can understand the "operational context" of the market: grasping changes in capital costs, tracking ETF capital flow directions, and detecting the quiet accumulation and concentrated release of risks in the derivatives market.

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