Bitcoin across paradigms: how CIOs see the change in market dynamics

The transition of Bitcoin from a speculative asset to an institutional commodity is completely redefining the strategies that CIOs (Chief Investment Officers) have used for decades. The “four-year cycle” theory based on halving events, which has guided many investors over the years, now faces a market reality profoundly altered by the massive entry of institutional capital.

The End of the Traditional Cycle According to Major Players

During a recent CNBC broadcast dedicated to the crypto sector, Matt Hougan, CIO of Bitwise Asset Management, put forward a provocative thesis: the four-year Bitcoin cycle no longer represents the main driver of price movements. According to Hougan, this dynamic has been progressively replaced by a “decadal bullish trajectory” fueled by structural factors different from those of the past.

The evidence supporting this view is significant. The approval of spot Bitcoin ETFs in early 2024, along with regulatory progress and the expansion of the stablecoin ecosystem, have created much stronger institutional foundations compared to historical cyclical forces. Hougan highlighted an intriguing fact: Bitcoin has become even less volatile than Nvidia over the past twelve months, an indicator that institutional adoption is still in its early stages.

The Balanced Perspective: Market Structure Transformed

Sebastian Bea, CIO of ReserveOne, offered a slightly more nuanced perspective. While agreeing that it is premature to declare the four-year cycle completely over, Bea emphasized a crucial element: the very architecture of the market has radically transformed.

The fundamental difference lies in the behaviors of market participants. Retail investors operate mainly on a speculative and (momentum-driven) basis, while institutions follow disciplined strategic asset allocation principles. Institutions, buying Bitcoin to maintain portfolio balance when prices fall, act as market stabilizers. This mechanism produces more gradual and controlled corrections, replacing the brutal 60-80% drawdowns that characterized previous cycles.

How the Conversation Between CIOs and the Market Has Completely Evolved

A revealing element emerges from both professionals’ testimonies: the very quality of discussions with institutional investors has undergone a radical transformation in the last five years.

Five years ago, questions during meetings were extremely rudimentary: “What exactly is Bitcoin?” or “How does the mining process work?” Today, conversations have reached a level of professional sophistication: CIOs discuss Bitcoin’s impact on portfolio correlations, its role as an inflation hedge, and its optimal allocation within multi-asset strategies.

The New Regulatory and Liquidity Context

The discussion then addressed the broader macroeconomic environment, including the impact of the new U.S. administration and Federal Reserve monetary policy. Bea noted that Bitcoin has received explicit recognition as a “commodity” from a regulatory standpoint, significantly reducing the regulatory uncertainty that characterized previous periods.

However, the market focus is no longer solely on political statements. Liquidity decisions and Fed actions have become variables just as, if not more, relevant. This reflects Bitcoin’s maturation as a complex financial instrument integrated into global institutional ecosystems, where simple cycle dynamics give way to more sophisticated multifactor interactions.