Bitcoinâs Four-Year Cycle May Be Over soon - says Bitwise CIO
Hello Readers,
I hope all of you are doing well in life and enjoying an amazing day with your loved ones while keeping an eye on the crypto market. Bitcoin is still maintaining a strong position above $100k and alt-coins are still holding gold as well. Though is this pump due to global incidents like Trumpâs inauguration as US President or a long expected bull Season? If you are a crypto enthusiast and have looked closely at Bitcoinâs historical price chart, you may have noticed a 4-year cycle repeating itself. As shown in the chart, Bitcoin has followed a predictable pattern for years, where first there come three years of price surges then followed by a major crash. This well-known four-year cycle has been the very core foundation of countless investment strategies around Bitcoin, as it is very useful in helping traders navigate Bitcoinâs volatile market. But according to Matt Hougan, the Chief Investment Officer of Bitwise, he says that this cycle may soon be a thing of the past.
Trumpâs Crypto Policies Could Change Everything
The recent inauguration of Donald Trump as the 47th President of the United States has already created a major impact on the crypto market. On the very first day of his swearing ceremony, Bitcoin soared to an all-time high of $109,036, which is currently being traded around $104,000. Trumpâs policies and well-known pro-crypto stance have boosted the optimism in crypto and not to mention, his newly signed executive orders on crypto tokens, NFTs and coins could push the market further into a whole new territory. The executive orders from Trump also established a task force called D.O.G.E., which is dedicated to exploring and strengthening the U.S. digital asset reserve possible by adding Bitcoin in the future, further showing the governmentâs increasing commitment to Bitcoin. Hougan believes that institutional investors, banks, financial corporations and even governments could flood the crypto market with capital, potentially reshaping Bitcoinâs price trends permanently in the near future.
Why This Time Is Different
Historically, Bitcoinâs boom-and-bust cycles have been mainly driven by a selective no. of speculative retail investors. However, this is changing in the current time as institutional investors and world governments and joining the club.
Institutional Involvement- Major firms like MicroStrategy are borrowing heavily to buy Bitcoin, which is a clear sign of growing corporate confidence. Additionally, Wall Streetâs biggest players are now also entering the crypto space.Leveraged Financial Products- No wonder that the introduction of Bitcoin ETFs to the public and other complex financial products has made Bitcoin certainly way more accessible and attractive to mainstream investors.
Regulatory Clarity- With Donald Trumpâs executive order and the recent shift in SEC policies, such as the repeal of Staff Accounting Bulletin 121, banks can now start holding crypto without classifying it as a liability, removing a long and significant barrier for institutional adoption.
All these factors suggest that the Bitcoin is no longer just a speculative asset or the internet magic money, it is actually maturing into the coin of global finance breaking down boarders and limitations.
Bitcoin at $200k | A Real Possibility?
Matt Hougan is also playing hard and loud on his bullish outlook, maintaining a whooping $200,000 price target for Bitcoin by the end of year 2025. His confidence in Bitcoin shines further from increasing institutional interest and a favorable regulatory environment. But will Bitcoinâs historical cycle of sharp crashes continue to happen in the future as well? Well traditionally, Bitcoinâs price as we have seen has collapsed by up to 74% after prolonged bull runs, leading to what we all traders call - the âcrypto winter.â
If history were to repeat itself which I think is very needed and expected, a major drop could be expected in 2026 in Bitcoinâs price. However, Hougan argues that this time, it is different. He believes that institutional adoption and improved regulation will make future downturns less severe than what we saw in the past. While corrections will still continue to happen, they are likely to be less scary, smaller and shorter-lived.
The Future of Bitcoin
It is believed that the crypto market is evolving at a rapid speed, and the four-year cycle that has governed Bitcoinâs past may be coming to an end. With increasing institutional participation, regulatory clarity and the U.S. governmentâs growing involvement, Bitcoinâs future looks more stable and also potentially more lucrative than ever before. So one thing is clear, whether Bitcoin hits $200,000 this year or not, one thing is certain the rules of the game are changing and those who adapt will reap the rewards.
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I hope you liked reading my post regarding Bitcoinâs 4-year cycle change. Let me know your thoughts on this topic in the comment section below and I will be seeing you all in my next post.
Posted Using INLEO
very good!
I can't wait for all those reserve plans of the different US states and other nation states.
It feels like every state of the US is currently working on a bill to create $BTC reserve.
I'm still very bullish on $BTC - 450k by #thanksgiving would a very nice present đ
4-year cycle will continue, halving will continue - if I understand correctly only lower #mining efforts would slow it down or stretch the time to the next halving.
We'll see - stay vigilant
optimal analysis of the scenario