CHONGQING, CHINA – JULY 17: In this photo illustration, a person holds a physical representation of a Bitcoin (BTC) coin in front of a screen displaying a candlestick chart of Bitcoin’s latest price movements on July 17, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)
Cheng Xin | Getty Images News | Getty Images
Bitcoin‘s historical “cycle” is showing signs that it might be breaking as a changing profile of investors and supportive regulation reshapes market dynamics.
If this often predictable pattern is broken, it would have significant implications for the way investors assess the cryptocurrency’s price action and the potential timing of when to invest in bitcoin.
“It’s not officially over until we see positive returns in 2026. But I think we will, so let’s say this: I think the 4-year cycle is over,” Matthew Hougan, chief investment officer at Bitwise Asset Management, told CNBC.
What is the bitcoin cycle?
Generally, the bitcoin cycle refers to a four-year pattern of price movement that revolves around a key event known as the halving, a change to mining rewards that is written in bitcoin’s code.
The halving happens roughly every four years, with the last one taking place in April 2024 and the one before that was in May 2020.
When the halving occurs, the rewards in the form of bitcoin that are given to so-called miners — entities that keep the bitcoin network functioning — are cut in half. This reduces the supply of bitcoin into the market. Therefore, there will only ever be 21 million bitcoin in existence.
Typically, bitcoin would rally in the months after halving to eventually reach a fresh all-time high. Then bitcoin would plunge, dropping roughly 70% to 80% from its peak leading to the onset of a “crypto winter,” a prolonged period of depressed digital coin prices. The price of other cryptos would also fall dramatically in this period. Bitcoin would then trade within a range for a while, and as the next halving approaches, it generally sees its price appreciate. Then the cycle repeats.
Bitcoin’s price typically has moved in 4-year cycles.
What’s happened to the bitcoin cycle?
There was unprecedented market reaction around the last halving as bitcoin hit a fresh all-time high of above $73,000 in March 2024, about a month before the halving, rather than reaching new heights after the celebrated event as expected.
“In every previous cycle, new all-time highs came 12-18 months after the halving,” Saksham Diwan, research analyst at CoinDesk Data, told CNBC.
The main factor was the U.S. approval of bitcoin exchange-traded funds which began trading in January 2024. ETFs track the price movement of bitcoin without an investor actually having to own the cryptocurrency itself.
Big inflows into ETFs, and the hope that this could bring more traditional institutional investors who had previously stayed away from crypto, helped boost the price of bitcoin.
“This time, spot Bitcoin ETF demand essentially front-ran the typical post-halving price discovery. This was indeed the first clear indication that institutional flows could alter traditional cycle dynamics,” Diwan said.
What factors have helped alter the bitcoin cycle?
The ETF was the first major factor that disrupted bitcoin’s four-year rhythm. It brought in investors with deep pockets who were interested in holding the cryptocurrency longer term.
But a number of other market factors have changed.
Bitwise Asset Management’s Hougan points to “blowups in crypto” that often preceded the crypto winters. He referenced the crash of so-called initial coin offerings, or ICOs, in 2018 and the collapse of crypto exchange FTX in 2022.
Meanwhile, the macroeconomic environment and regulation are becoming more supportive.
“Interest rates are more likely to go down than up in the next year, and the fact that regulators and legislators are now willing to engage with crypto rather than steadfastly refusing to deal with it will dramatically reduce the risk of future blow-ups,” Hougan said.
Gary Gensler, former leader of the U.S. Securities and Exchange Commission, had cracked down on the sector and opened a number of cases against crypto firms. Those in the industry said they were being unfairly targeted. Under the current administration of U.S. President Donald Trump, the SEC has dropped some cases against crypto firms. Washington has looked to introduce new laws around crypto and has even launched a bitcoin strategic reserve.
Meanwhile, public companies are accumulating cryptocurrencies, especially bitcoin, as part of a new strategy.
“With increasing market maturity, long-term holder accumulation at all-time highs, and dampened volatility, the traditional 4-year rhythm is being replaced by more liquidity-sensitive, macro-correlated behavior,” Ryan Chow, co-founder of Solv Protocol, told CNBC.
Where are we in the cycle now?
One key point to note is that historically the most significant price appreciation for bitcoin occurred between days 500 and 720 post-halving, according to Diwan of CoinDesk Data. Bitcoin peaked during this window in the 2016 and 2020 cycles, Diwan noted.
“If this pattern was to repeat, then we should watch for potential acceleration between Q3 2025 and early Q1 2026,” Diwan said, adding that “price action [in] this cycle has been notably subdued compared to previous post-halving periods.”
Hougan, of Bitwise Asset Management, said the four-year cycle is over, but for it to officially be dead, bitcoin would need to have a good 2026, which he expects will happen.
“I don’t think we’ve repealed volatility, but I think a) the forces that have historically created the four-year cycle are weaker than they were in the past and b) there are other very strong forces moving on a different timeline that I think will overwhelm our four-year tendency,” Hougan said in an emailed comment.
Bitcoin’s latest record high was hit on July 14 as it pushed above $123,000.
Are 80% crashes a thing of the past?
One prominent feature of previous cycles is that bitcoin would plunge roughly 70% to 80% from its record high following the halving.
Crypto industry insiders told CNBC this won’t happen anymore, given the reasons they’ve outlined to support a changing four-year cycle.
“We believe the era of brutal 70–80% drawdowns is behind us,” Chow, of Solv Protocol, said.
He noted the largest correction this cycle has seen was around 26% on a closing basis compared with around 84% post-2017 and 77% post-2021 all-time highs.
Long-term holders of bitcoin as well as “steady institutional inflows are contributing to greater downside absorption, Chow said. He added that there may be corrections in the range of 30% to 50% “in reaction to macro shocks or regulatory surprises, but they’re likely to be shorter and less violent than in previous cycles.”
Hougan also said that 30% to 50% falls are possible but: “I bet 70% pullbacks are a thing of the past.”