Bitcoin price has long followed a familiar rhythm: every four years, a halving slashes the new supply of coins, setting off a bull run. Then, when the price gets too frothy and sentiment a pinch too euphoric, traders take profit and the price nosedives into a bear market.
That playbook is now dead, according to Matt Hougan, chief investment officer at Bitwise.
But not everyone agrees with him.
“The forces that have created prior four-year cycles are weaker,” Hougan said on X on Friday. “The halving is half as important every four years, the interest rate cycle is positive for crypto, and blow-up risk has attenuated.”
For Hougan, the structural forces behind Bitcoin’s classic boom-and-bust cycles — like the halving’s impact on supply — are weakening. Meanwhile, a new macro and regulatory environment is working in Bitcoin’s favour.
The ETF boom
The launch of spot Bitcoin ETFs in the US in January 2024 kicked off a multi-year inflow trend that could reshape the entire asset class, said Hogan.
And institutions are only just beginning to pile in. Pension funds, endowments, and national wealth platforms are still onboarding.
At the same time, regulation is gaining clarity, Wall Street is laying infrastructure, and billions in capital are entering the space — fuelled by legislative breakthroughs like the Genius Act passed earlier this month.
And that’s not to mention the frothy Bitcoin treasuries, which have been on a shopping spree like none other. According to Bitcointreasuries.net, in the past 30 days, 22 public companies have joined the 138 that already held Bitcoin as a reserve asset. The total is now 160 and counting.
“The long-term pro-crypto forces will overwhelm the classic ‘four-year cycle’ forces,” said Hougan, “and they don’t sync with halving cycles.”
New territory
But some disagree.
“When we’re in the depths of a bear market, the treasury companies are not going to operate like die-hard bitcoiners that continue to stack bitcoin.”
If Bitcoin suffers a 50% drawdown, treasury companies will be hard pressed to find capital like they do today, explained Hansen. They also have operational costs, and could face shareholder pressure to liquidate their holdings if their shares plummet alongside the Bitcoin they hold.
And that’s not to mention the potential for Bitcoin ETF holders to start selling, which “would further decimate the price,” he said.
Some agree with Hougan, but take a more tempered approach.
“I’m somebody who thinks it’s intact, but it’s going to be muted,” James Seyffart, an ETF analyst at Bloomberg Intelligence said on the Kyle Chasse podcast on July 24.
The hallmark boom-and-bust swings — like Bitcoin’s 80% crash in 2018, or its post-all-time-high dive in 2022 — are now being tempered by a maturing investor base, a growing roster of institutional allocators, and a more permanent class of buyers.
Indeed, traditional volatility cycles, driven by speculative hype and harsh corrections, are being dampened by new forms of capital.
“Institutions are coming in, more stable money, more forced buyers like Bitcoin treasuries,” he said. “Instead of 80% drawdowns, maybe we see 50%.”
One open tap? Financial advisors buying Bitcoin exchange-traded funds.
Bitcoin ETFs buyers are relentless, even in the face of geopolitical tension. These now hold 1.2 million Bitcoin worth about $147 billion, according to a Dune Analytics dashboard.
Seyffart explained that these wealth managers make up the bulk of spot ETF buyers, and have been allocating up to 5% of client portfolios. But those weights can balloon fast.
What happens when Bitcoin’s price rises and their allocations swell to 10%?
“Maybe they’re not ready for that,” he said. “They’re going to sell.”
Talk of Bitcoin escaping its boom-and-bust fate isn’t entirely new.
In fact, former Kraken executive and long-time Bitcoiner Dan Held has been championing a “super cycle” thesis since 2020.
That’s the idea that Bitcoin would eventually break free from its four-year halving rhythm and enter a prolonged, parabolic expansion driven by unprecedented global demand.
Held argued that a unique mix of macro conditions — institutional interest, rampant money printing, global instability, and rising distrust in fiat — would combine to create a once-in-a-generation bull run with no dramatic bust on the other side.
“Never before has Bitcoin had so many tailwinds at once,” Held wrote at the time. “This cycle could be the one that breaks the pattern.”
But that theory hasn’t fully materialised. Bitcoin peaked in late 2021, then collapsed more than 75% during the 2022 bear market, mirroring previous cycles almost exactly.
Still, even believers in the four-year cycle reckon the Bitcoin economy is evolving. Fast.
