Ethereum and Bitcoin: why the four-year cycle is about to break (and what it means for your investments)

The cryptocurrency market is going through a crucial transition period. While many investors have thrown in the towel after the disappointing performance of 2025, the most astute analysts are noticing signals that could herald a structural break from historical price patterns.

During the blockchain conference held in Dubai in early December, Tom Lee and the BitMine team presented a systematic analysis of how the crypto market is entering a new phase. The key point is not just about prices but a fundamental shift in the market’s underlying fundamentals.

Tokenization as the Dominant Theme of 2025

This year’s main theme is not traditional speculation but tokenization. This phenomenon represents what ChatGPT has been for artificial intelligence: a moment of sudden awareness.

Wall Street has realized that simply tokenizing traditional assets — from the dollar to real estate, stocks to bonds — can generate enormous revenue streams. The potential market size is impressive: the global financial sector is worth nearly $10 trillion.

Although pessimism has permeated the market since October, the underlying fundamentals remain strong. Financial institutions have not slowed down their tokenization plans — in fact, they have accelerated them. This suggests that the timing of the traditional cycle may be less relevant than most analysts believe.

The Market Bottom: Is It Really Here?

According to technical analysis conducted by experts like Tom DeMark — one of the legendary market timers in history — data suggest that Ethereum has reached its bottom. The crypto research team observed a significant change in Ethereum’s accumulation patterns.

Five weeks ago, following technical signals, the buying pace had been drastically reduced to 50,000 units per week. However, in recent weeks, the team has resumed active buying, with volumes doubled — nearly 100,000 ETH last week. This tactical shift reflects renewed confidence in Ethereum’s future price trend.

Insider behavior is often more revealing than analysts’ opinions. When major holders start accumulating aggressively again, it usually means that pessimism has already been priced into the market.

The Break of the Bitcoin Four-Year Cycle

For decades, the Bitcoin market followed an almost perfect cycle of 3.91 years, marking major peaks and troughs. However, this time, data suggest that the cycle may finally be breaking.

The research team identified five variables that traditionally drove the cycle: halving, monetary policy, leverage structure, the copper-gold ratio, and the US ISM economic activity index.

The problem? Several of these variables are no longer following the four-year rhythm. The ISM index, for example, has remained below 50 for three and a half years — breaking the historical pattern. Similarly, the copper-gold ratio was expected to peak this year, but it did not.

If industrial cycles and commodities no longer follow the four-year rhythm, why should Bitcoin? A definitive test will come in January: if Bitcoin establishes a new all-time high in the first month of the year, the four-year cycle will be officially dead.

Price implications are significant. If Bitcoin continues its bullish trend without a drastic correction according to the old cycle, it could easily reach $250,000 in the coming months.

Ethereum as the Future Financial Infrastructure

Ethereum is experiencing its “1971 moment.” In 1971, the US dollar abandoned the gold standard, forcing Wall Street to innovate to keep the dollar as the global reserve currency.

Today, something similar is happening in the world of tokenization: not only is the dollar recreated on smart contracts, but all asset classes — stocks, bonds, real estate — are migrating onto Ethereum as the underlying platform.

Already today, the vast majority of real asset tokenization projects (RWA) are built on Ethereum. Even veteran Bitcoin developers recognize that Ethereum has won the “smart contract war.”

Regarding prices, if Ethereum truly assumes the role of the global financial infrastructure, the Ethereum/Bitcoin ratio could reach 0.25 (compared to the 2021 highs of 0.08). With Bitcoin at $250,000, this would imply an Ethereum price around $62,000 — a 20x increase from current levels.

The Combined Revolution: Tokenization + Prediction Markets

The real innovation does not only come from tokenization but from its combination with prediction markets. Platforms like Polymarket generate incredibly high-quality information — so accurate that they are called “the closest thing to a crystal ball” for price discovery.

Imagine being able to break down a company not only into shares but into its constituent elements: region-specific revenue streams, individual product lines, or even the market-assigned value to specific executives.

Wall Street has not yet fully grasped the hidden value in this structural innovation. It represents a completely new toolkit for price discovery and risk management. Financial institutions are just beginning to build systems to leverage this capability.

Digital Asset Treasury: The Bridge Between Tradition and DeFi

Digital Asset Treasury companies serve as a crucial bridge between traditional finance and decentralized finance. Their logic is simple: Ethereum uses Proof-of-Stake, meaning anyone holding Ethereum can earn yields through staking.

A treasury company can acquire Ethereum for staking purposes, generating predictable revenue streams. These yields — around 2.9% annually in optimized staking programs — translate into hundreds of millions of dollars in annual revenue.

MicroStrategy is currently the 17th most traded stock in the US by volume. BitMine, despite being founded only a few months ago, is already the 39th most active stock — surpassing the trading volume of large industrial companies like General Electric.

Among the approximately 80 crypto-treasury companies, MicroStrategy and BitMine control 92% of total trading volume. This liquidity concentration suggests that Wall Street is building a market structure around these vehicles.

BitMine’s balance sheet reflects its strategy: over $12 billion in Ethereum, high-risk high-reward investments, and about $900 million in cash. Once the staking Maven is fully implemented, revenue generation will be about $1.3 million per day from this flow alone.

Why Some Continue to Persevere While Others Give Up

The difference between those who keep believing in the sector and those who have given up is not about risk tolerance. It’s about understanding the underlying structural dynamics.

Only 4.4 million Bitcoin wallets hold more than $10,000. Meanwhile, nearly 900 million people worldwide have retirement accounts of this size. If Bitcoin adoption approached even remotely the level of retirement accounts, it would mean a 200x growth in the user base.

According to a Bank of America survey, 67% of fund managers still have no exposure to Bitcoin. This means that most institutional capital has not yet entered the market.

Wall Street is not building this tokenization and Digital Asset Treasury infrastructure for a stagnant market. It is building for the eventuality of a market 100 times larger than today. For those who understand this dynamic, price corrections are opportunities, not signs to give up.

The cryptocurrency market has not yet begun its true cycle of maximizing adoption. What we are experiencing today is simply the infrastructural setup for that next phase.