Is the Four Year Bitcoin Cycle Broken?

Lark Davis

Introduction to the Four-Year Crypto Cycle

The four-year crypto cycle is a phenomenon where Bitcoin's price increases over three years, followed by a year of decline. This cycle has been observed in the past, allowing investors to "load up" on Bitcoin when it's cheap and sell at the top.

Changes in the Crypto Market

The crypto market has changed significantly, with Bitcoin now operating at a scale of over $2 trillion in market capitalization. Institutional buyers, such as corporate and government bodies, are investing in Bitcoin, which can lead to a slower and more stable market.

Factors Affecting the Four-Year Cycle

Several factors may contribute to the end of the four-year cycle:

  • Market scale: Bitcoin's increased market capitalization and institutional investment may lead to a more stable market.
  • Sample size: The four-year cycle is based on a small sample size, with only four cycles observed since Bitcoin's launch in 2009.
  • Bitcoin halving: The impact of Bitcoin halving may diminish as the market cap and distribution grow.
  • Perez Technological Surge Cycle: Bitcoin may be entering a stable period, characterized by an S-curve trajectory.

Market Psychology and Cycles

Market psychology plays a significant role in shaping the crypto market. The four-year cycle is widely recognized, which may lead to crowded trades and accelerated cycles. Smaller, more volatile cycles are already observed in the market, particularly in altcoins.

Future Cycles

Future cycles may be different from the traditional four-year cycle:

  • Less predictability: The market may become less predictable, with Bitcoin breaking away from the rest of the crypto market.
  • More stability: Bitcoin's price may become more stable, with less likelihood of devastating catastrophes.
  • Tamer cycles: Bitcoin's cycles may become more like gold trades, with shallower pullbacks and less sell pressure.

Conclusion

The crypto market is changing, and investors need to adapt to new conditions. The theory of a different crypto cycle remains to be proven, but it's an interesting perspective to consider.