The foundational four-year cycle, long considered a bedrock principle of the crypto market, is now “dead,” according to Matt Hougan, Chief Investment Officer at Bitwise. This bold declaration signals a significant shift in how digital assets are influenced, moving away from traditional internal mechanics like Bitcoin halvings towards the formidable currents of institutional finance.
For years, the crypto world has operated on a roughly quadrennial rhythm, largely dictated by Bitcoin’s halving events. These pre-programmed reductions in the supply of new Bitcoin have historically triggered major price rallies, creating a predictable boom-and-bust pattern. However, 2024 has proven to be a pivotal year, irrevocably altering this established cycle.
Institutional Influx Reshapes the Landscape
The primary catalyst for this paradigm shift, Hougan contends, is the surge in institutional adoption. The approval of spot Bitcoin Exchange-Traded Funds (ETFs) in the US in January 2024 unleashed a torrent of traditional capital into the digital asset space. This influx was so powerful that Bitcoin defied historical precedent, reaching a new all-time high before its April halving event. This unprecedented move underscores how traditional market forces are now dictating Bitcoin’s price trajectory more than its own embedded scarcity mechanism.
“The forces that have created the prior four-year cycles are weaker,” Hougan noted on social media, emphasizing that larger, more sophisticated players now dominate the market narrative. He posits that the market’s previous reliance on a combination of halving events, macroeconomic interest rates, and extreme volatility is giving way to a more mature, institutionally-driven environment.
A “Sustained, Steady Boom” on the Horizon
Bitwise’s CIO believes that institutional engagement is still in its nascent stages. He points out that the full shift of assets into ETFs typically unfolds over a five to ten-year period. This suggests a prolonged period of growth rather than the sharp, volatile “super-cycles” of the past. Hougan optimistically predicts 2026 to be “a good year for crypto,” envisioning a “more sustained, steady boom.”
The influence of these large players is already evident. US-listed spot Bitcoin ETFs collectively manage a staggering $154 billion in assets, with BlackRock’s iShares Bitcoin Trust (IBIT) alone surpassing 700,000 BTC in assets under management earlier this month. This significant capital absorption by traditional financial vehicles has contributed to a noticeable decrease in Bitcoin’s infamous volatility, a hallmark of its earlier, more speculative days.
Furthermore, Hougan highlights improving macroeconomic conditions and regulatory progress as additional tailwinds. He notes that the current interest rate cycle is now “positive for crypto,” a stark contrast to previous periods of tightening that negatively impacted the market. Recent legislative milestones, such as President Trump signing the GENIUS bill, are encouraging Wall Street giants like JPMorgan, Standard Chartered, and Charles Schwab to explore offering crypto products, signaling deeper integration into mainstream finance. Even national agencies like Fannie Mae and Freddie Mac are reportedly considering cryptocurrencies for loan considerations.
While the outlook is largely positive, Hougan does flag one “emergent cyclical-style risk”: the rise of treasury companies accumulating significant Bitcoin holdings. Their potential movements could introduce new dynamics, albeit different from the historical patterns.
In essence, the crypto market is shedding its youthful, erratic skin. As institutional capital deepens its roots, the industry is transitioning into a more predictable, yet still dynamic, phase, where the old rules of the game are being rewritten.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Always conduct thorough research before making investment decisions.
