## The Four-Year Cycle Argument and Crisis: Can the Halving Algorithm Still Dominate the Crypto Market?

Since Bitcoin's inception, the "four-year cycle" has almost become the cornerstone of cryptocurrency belief. Halving → Supply tightening → Price increase → Altcoin explosion—this narrative not only explains historical price fluctuations but also profoundly influences investor positioning, project funding rhythms, and even the industry's understanding of "time." But based on the performance after the April 2024 halving, the story seems to be changing.

**The gains brought by halving are far below expectations.** From the halving event (April) to the all-time high (December), Bitcoin only rose from $60,000 to $126,000, an increase of about 110%. This stands in stark contrast to the 2000%+ gains in the previous two halving cycles. More worryingly, altcoins are showing weak performance, lacking the previous hype enthusiasm. Instead, macro liquidity changes and political cycles have become more sensitive reference indicators—especially as spot ETFs see large inflows and traditional financial instruments flood in, making this trend even more apparent.

**A fundamental question emerges: Does the four-year cycle still exist?**

## The Decline of Supply-Side Logic

Deeper analysis reveals that the mathematical foundation of the four-year cycle is crumbling.

Traditionally, halving events (block algorithm adjustments, reduction in new coin supply) are the core drivers of the cycle. In earlier halving cycles, newly issued Bitcoin supply surged, miner behavior was clear, and supply-demand relationships could polarize easily. But now, the situation is different:

**The current cycle (2024-2028) is expected to add only about 600,000 BTC,** relative to the 19 million already issued, this increment seems negligible. The new selling pressure might not exceed $60 billion—this size is easily absorbed by Wall Street.

As the market scales up, the price change resulting from unit capital inflow diminishes. Simply put, going from $100 million to $1 billion requires explosive growth; from $1 trillion to $2 trillion, the required increase is already exponential. This is the fate faced by all mature assets.

Mining costs also hint at changing dynamics. At the previous peak, mining costs were about $20,000 per BTC, with Bitcoin priced at $69,000, yielding a profit margin of up to 70%. **At this cycle's peak of $126,000, post-halving mining costs have risen to $70,000, with profit margins only around 40%.** The declining return rate reduces miners' incentives, breaking the traditional logic chain of halving → reduced miner sell-off → price support.

## Institutional Entry Has Changed the Game

The influx of spot ETFs and institutional capital fundamentally alters the price formation mechanism.

**In the past, Bitcoin's price rises concentrated within one or two time windows—parabolic increases in the months following halving.** Retail sentiment and FOMO created peaks. These extreme behaviors are easy to identify and predict, forming a clear "four-year cycle" outline.

**Now, over $50 billion in ETF funds have already flowed in before the halving,** and price increases are spread over a longer timeline, losing the previously steep profile. Institutional entry means:

- Funding sources are diversified, no longer relying on retail enthusiasm cycles
- Trading rhythm shifts from speculation to allocation (more stable, rational)
- Pricing logic moves from supply-side to macro liquidity factors

Macro liquidity becomes the new dominant variable. When central banks loosen monetary policy and global M2 growth accelerates, Bitcoin, as the "most liquidity-sensitive sponge," often performs strongly. Conversely, tightening cycles suppress it. From this perspective, **the four-year cycle is merely a manifestation of macro liquidity cycles in the crypto market.**

## Cycles or Narratives? Both Are Valid

This raises a philosophical question: Is the four-year cycle an objective economic law or a self-fulfilling collective expectation?

The answer may be **both, but with shifting weights over time.**

In the early stages of extreme scarcity (2012-2016), halving events were indeed hard constraints. But as market participant structures change—institutions replacing retail, long-term holders increasing—this constraint gradually softens. Today, the four-year cycle is more of a "psychological anchor": because everyone believes in it, behaviors revolve around it, ultimately creating a self-fulfilling prophecy.

However, this self-fulfillment is also waning. **As the total number of altcoins surpasses 1 million+ and regulatory frameworks increasingly filter out "bad projects," the power of a single narrative will inevitably weaken.** The era of "all coins flying together" is history; now, the focus is on stable blue-chip performance, with long-tail coins struggling to turn around.

## What Stage Are We At Now?

This is the most controversial question.

**Pessimists' view:** Based on the ratio of mining costs to price, we are in the early stages of a bear market. This view is based on a fact— in mature industries, returns decline with each cycle. When miner profit margins fall from 70% to 40%, industry attractiveness diminishes significantly. Plus, in the past two years, U.S. venture capital has heavily flowed into AI rather than crypto, hinting at a shift in risk capital enthusiasm.

**Neutral view:** The technical picture has entered a weak phase (weekly chart breaking MA50), but macro data has not yet confirmed a true bear market. The key indicator is stablecoin supply—if stablecoins do not grow for two consecutive months, only then can the bear market be truly confirmed. Currently, we are in a "wait-and-see" phase: the structure has weakened, but the final verdict has not yet arrived.

**Optimists' view:** Global central banks have no choice but to continue easing policies to ease debt burdens. The rate-cutting cycle has just begun, and the "tap" is not closed. As long as M2 continues to grow, Bitcoin's long-term trend as a risk asset remains intact. Current volatility is just wide-ranging consolidation, not a bear market. The real bear market signal would be actual tightening by central banks or systemic economic crises.

**Consensus is vague, but most lean toward:** The traditional four-year cycle has failed; we are entering a "post-cycle era."

## From Emotional Bull Market to Structural Bull Market

If the four-year cycle no longer dominates, where does Bitcoin's long-term value support come from?

The answer points to **institutional adoption and structural growth**.

Historically, Bitcoin's rise was driven by retail emotional releases—an "emotional bull market." Today, the growth driver is:

**A systemic hedge against fiat devaluation.** As Bitcoin becomes "digital gold," incorporated into sovereign wealth funds, pensions, and risk-averse portfolios, its growth logic resembles that of traditional precious metals—slow, steady, linked to macro risks rather than cyclical explosions.

**The infrastructure of stablecoins.** Stablecoins have evolved from speculative tools to financial interfaces—from payment settlement to cross-border transfers, and even RWA (real-world asset tokenization). This means the crypto ecosystem is no longer just a virtual game but gradually woven into the real economy. When stablecoin flows are tied to real transactions, the market will exhibit "compound growth" characteristics rather than cyclicality.

**Institutional allocation becoming normalized.** Each policy shift triggers new institutional allocations, creating platform-like growth. This is not a one-time event but a recurring structural increment.

## The Investment Logic of the New Era

In this context, the traditional "four-year cycle hype method" is outdated. The new strategic framework includes:

**Defensive allocation:** Core holdings of Bitcoin and Ethereum, with caution on Ethereum. Use gold rather than USD to manage cash risk. Seek yields in stablecoins (e.g., WLFI and other new products).

**Selective risk-taking:** Altcoins are no longer "rotation fireworks" but are evaluated individually based on fundamentals, revenue, and compliance. Only projects with genuine business models are worth holding. Most coins are in a "big elephant died, flies didn't" situation.

**Avoid leverage and frequent trading:** This era tests holding discipline, not timing skills.

**Key buy signals:** The real sign of market bottoms is "no one dares to buy the dip"—fear has reached its extreme. From a technical perspective, if prices fall below $60,000, accumulated value will become apparent. But short-term (1-2 months) such a retracement is unlikely.

## Hidden Risks

It is important to be aware that **the above "structural bull market" thesis relies on the assumption that liquidity remains ample.**

If between 2026-2027, a real economic recession occurs, central banks are forced to tighten aggressively, or geopolitical black swan events happen, the crypto market will also face difficulties. Wealth concentration intensifies, employment markets worsen, and demographic imbalances grow—these macro headwinds are building up.

Under such risks, the "safe-haven" attribute of cryptocurrencies will also be tested. It may not be insurance but rather a risk asset among risk assets.

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**The final balanced view:** The mathematical foundation of the four-year cycle has been broken, but this does not mean the crypto market has lost its growth logic. The drivers are shifting from supply-side to demand-side, from cyclical to structural. Investors need to upgrade from "chasing cycles" to "grasping structures," from "emotion-based trading" to "allocation mindset." In the face of uncertainty, cautious and sustained capital accumulation is more important than precise timing predictions.