Does the four-year Bitcoin cycle theory still hold? Divergent opinions from industry professionals

Over the eighteen years since the emergence of Bitcoin, the four-year cryptocurrency cycle theory has become almost a bible for investors. Block reward halvings, reduced supply, price increases, altcoin seasons – this scenario not only explained historical trends but also shaped portfolio decisions and investment pace across the industry. However, after the halving in April 2024, reality proved to be less dramatic: Bitcoin rose from $60,000 to $126,000 – a much more modest increase than in previous cycles, and altcoins performed even worse.

Now the key question is: Is the four-year cycle in the cryptocurrency market really losing its power?

From theory to reality: what really drives halving?

Traditionally, it is believed that the four-year cycle is primarily driven by Bitcoin halving – the reduction of new supply and support for the price. This is the most important part of the narrative because it is based on mathematics. However, more and more analysts recognize a broader context: the crypto cycle is not just an algorithm but an interaction between political cycles, global central bank liquidity, and investor behavior.

Bitcoin, which was once a speculative asset, has become a typical macroeconomic instrument since the approval of spot ETFs. The pace of Fed balance sheet expansion, the growth of global M2, institutional capital flows – these are now as important variables as the halving itself. In the current cycle (2024-2028), only about 600,000 BTC are added, representing minimal selling pressure easily absorbed by Wall Street.

The conclusion is surprising: halving still exists, but its impact diminishes as market capitalization grows.

Smaller gains: natural effect or structural change?

Almost all market observers agree: the current cycle produces smaller percentage gains – this is not a sudden loss of power but a natural effect of diminishing marginal returns. As Bitcoin’s market cap grows into the trillions of dollars, each subsequent increase requires an exponential influx of capital. This is a logical consequence of market maturation.

However, behind the change in pace lies a deeper transformation of market structure. Spot ETFs and institutional capital flows arrived before the main supply shock, causing growth to spread over a longer period instead of a parabolic explosion. In previous cycles, retail investors drove the peaks; now Wall Street systematically allocates positions from the back, building long-term portfolios without dramatic surges and crashes.

This change has consequences: halving becomes a secondary catalyst, while truly significant factors are institutional flows, tokenization of real assets (RWA), and global liquidity.

Where are we now – bull or bear market?

This question divides the industry. Some analysts see early signs of a bear market: Bitcoin mining costs have risen to around $70,000 after the halving, and miners’ margins are just over 40% at a peak of $126,000 (compared to 70% margin in the previous cycle when costs were $20,000). The decline in returns over nearly two decades is a fact.

Others point out that technical indicators show weakening, but macroeconomic fundamentals remain solid. Observing stablecoin flows, M2 growth, and especially the upcoming cycle of interest rate cuts – the scenario indicates an still-active “liquidity fountain.” When the dollar is weak and global central banks release money, assets sensitive to liquidity like cryptocurrencies do not enter a deep bear market but consolidate and slowly grow.

Divergence of opinions is symptomatic: part of the market has already confirmed a bear, the rest awaits final data, but most agree that the traditional bull-bear structure is weakening.

Is the altcoin season returning?

The traditional altcoin season – when hundreds of smaller tokens explode in price – seems to be a thing of the past. In this cycle, altcoins were noticeably weaker for several reasons:

• Bitcoin’s rising dominance created a “safe haven” among risky assets, prompting institutions to concentrate on blue chips
• Growing regulatory frameworks favor altcoins with real utility, while speculative tokens find it harder
• The number of projects hits record highs, causing capital dispersion even as overall liquidity increases

A more realistic scenario is a limited altcoin season, focused on sectors (DeFi, stablecoins, RWA), and selected tokens with proven utility. The retail economy based on “attention economics” is shifting to an institutional economy based on “financial reporting economics.”

From emotional bull runs to structural ones

If traditional cycles weaken, where does the main driving force of the future crypto market come from?

Likely from two sources:

First – systematic shift in institutional allocation. Bitcoin as “digital gold” is appearing on the balance sheets of states, pension funds, hedge funds. This growth logic does not depend on one-time events but resembles gold: a long-term hedge against fiat currency depreciation. Prices will spiral upward over years.

Second – stablecoins as an infrastructure layer. Compared to Bitcoin, they have greater user potential and are closer to the real economy. From payments to cross-border capital flows – stablecoins are becoming the foundation of a new financial system, driving adoption not through speculation but through real use cases.

Result: future growth will be a slow, dispersed bull run over years – less dramatic but more sustainable than traditional cycles.

Practical implications for portfolios

What does this mean for investors? Most experienced market participants have adopted a noticeably more cautious stance. Instead of aggressive buying at lows, they build positions from the back through systematic dollar cost averaging (DCA). The core of the portfolio is Bitcoin and Ethereum, with altcoin exposure falling below 10%.

The best time to build positions is below $60,000 – a level representing a 50% drop from the peak, a historically tested strategy. However, in the short term, we do not expect this. Instead: gradual capital allocation, avoiding leverage, discipline more important than forecasting.

One consensus unites all participants: the market is changing structurally, the four-year cycle is losing significance, but the long-term trend remains upward – provided that global liquidity does not undergo drastic changes.