Bitcoin’s four-year cycle used to be a comfort blanket. Even people who claimed they didn’t believe in it still traded as they did.
The halving would cut new supply, the market would spend months pretending nothing happened, then liquidity would show up, leverage would follow, retail would rediscover its password, and the chart would start a new race to a new all-time high.
21Shares lays out the “old playbook” in blunt numbers: 2012’s run from about $12 to $1,150 and an 85% drawdown, 2016’s move from about $650 to $20,000 and an 80% drawdown, 2020’s climb from about $8,700 to $69,000 and a 75% drawdown.
So when the “cycle is dead” discourse hit full volume in late 2025, it landed because it wasn’t just coming from the crypto retail market. It traveled through allocator channels: Bitwise saying 2026 could break the pattern, Grayscale leaning into a new “institutional era,” and 21Shares explicitly asking whether the four-year rhythm still holds.
The part worth rescuing from the hot takes is simple: the halving is still real and will continue to be a relentless, unyielding force, but it no longer has monopoly power over Bitcoin’s timetable.
That doesn’t mean it’s the end of cycles. It just means the cycle now has more clocks on the wall, and they don’t all tick at the same speed.
The old cycle was a calendar, and a way to be lazy
The halving cycle was never magic, and it worked simply because it bundled three ideas into one neat date: new supply fell, narratives got an anchor, and positioning had a shared focal point. The calendar did the coordination problem for you.
You didn’t need a deep model of liquidity, cross-asset plumbing, or who the marginal buyer was. You could just point at a quadrennial scarlet letter and say: “Give it time.”
That’s also why it became a trap. The cleaner the script, the more it invited a single-trade worldview: front-run the halving, wait for the melt, sell the top, buy the winter. When that approach stopped producing a clean, cinematic payoff on schedule, the reaction was binary: either the cycle still rules everything, or it’s dead.
Both camps seem to miss what’s actually happened to Bitcoin’s market structure.
The investor base is broader, the access rails are more familiar, and the dominant arenas for price discovery now look a lot more like mainstream risk markets. State Street’s own framing of institutional demand leans heavily on exactly that: we’ve got regulated ETP access and a “familiar vehicle” effect on the market, with Bitcoin still in the center of gravity by market cap.
And once the force that drives the market changes, the timetable changes with it. Not because the halving stopped working, but because it’s now competing with forces that can overpower it for long stretches.
The policy clock and the ETF clock now set the tempo
To get a better understanding of why the old cycle is now basically irrelevant, we need to start with the least “crypto” part of the story: the price of money.
On Dec. 10, 2025, the Fed cut the target range for the federal funds rate by 25 bps to 3.50%–3.75%. A few weeks later, Reuters reported Fed Governor Stephen Miran arguing for more aggressive cuts in 2026, including talk of 150 bps over the year. China’s central bank, in parallel, talked about lowering the RRR and interest rates in 2026 to keep liquidity ample.
This tells us that when global financing conditions tighten or loosen, it changes the set of buyers who can, and want to, hold volatile assets. That sets the background temperature for everything else.
Now layer in spot Bitcoin ETFs, which is where the four-year story really starts to look reductionist.
ETFs certainly added a new set of buyers to the market, but more importantly, they changed the shape of demand. In the ETF wrapper, buying pressure shows up as creations, and selling pressure shows up as redemptions.
Those flows can be driven by things that have nothing to do with the halving: portfolio rebalances, risk budgets, cross-asset drawdowns, tax considerations, advisory platform approvals, and the slow grind of distribution.
That last piece matters more than people admit, because it’s boring and therefore decisive. Bank of America is expanding advisors’ ability to recommend crypto ETPs starting Jan. 5, 2026, which is exactly the kind of gatekeeping step that alters who can buy, how they buy, and under what compliance constraints.
This is why the strongest version of the “cycle is dead” argument is also the most limited version. It’s not saying the halving has no effect, just that it no longer dictates the tempo by itself.
Bitwise’s framing and broader 2026 outlook lean on that intuition: macro matters, access matters, and the market’s behavior can look different once the marginal buyer comes from traditional channels instead of native crypto rails. 21Shares makes the same general point in its cycle-focused writing and its Market Outlook 2026, which sees institutional integration as a core driver of how crypto trades going forward.
Grayscale goes even further and frames 2026 around deeper integration with the US market structure and regulation, which is another way of saying: this market now lives closer to the financial system’s daily machinery.
The cleanest way to update the cycle idea is to treat it like a small set of dials that move every week.
One dial is the policy path: not just whether rates are up or down, but whether financial conditions are loosening or tightening at the margin, and whether that narrative is accelerating or stalling. Another is the ETF flow regime, because creations and redemptions are a direct read on how demand is actually arriving or leaving through the dominant new wrapper.
A third is distribution, meaning who is allowed to buy in size and under what constraints. When a large advisory channel, brokerage platform, or model-portfolio gatekeeper opens access, the buyer base expands in a slow, mechanical way that can matter more than a one-day burst of enthusiasm, and when access is restricted, the funnel narrows just as mechanically.
Two final dials capture the market’s internal state. Volatility tone answers whether price is being set by calm two-way trades or by stress, with fast selloffs and air pockets that usually come from forced risk reduction.
The cleanliness of market positioning shows whether leverage is being added patiently or stacked in a way that makes the market fragile. A market can look fine on spot price alone while becoming dangerously crowded underneath, or it can look messy while leverage is quietly being reset and risk is being cleared.
Taken together, these checks don’t discard the halving. They just put it in its proper place as a structural backdrop, while the timing and shape of major moves are increasingly governed by liquidity, flow plumbing, and how much risk is concentrated in the same direction.
Derivatives turned the climax into a risk-transfer market
The third clock is the one most cycle talk ignores because it’s harder to explain: derivatives.
In the old retail-dominant boom-bust model, leverage behaved like a party that got out of hand at the end.
In a market with deeper institutional participation, derivatives are less a side bet and more a core venue for risk transfer. That changes where stress shows up and when it gets resolved.
Glassnode’s Week On-Chain for early January 2026 frames the market as having gone through a year-end reset, with profit-taking easing and key cost-basis levels becoming the line to watch for confirming a healthier upswing.
That’s a very different vibe from the classic cycle climax, where the market is usually busy inventing new ways to justify vertical candles.
Derivatives don’t remove these manias, that’s for sure. But they significantly change the way they start, progress, and die.
Options allow large holders to express views with a defined downside. Futures allow hedging that can mute spot selling. Liquidation cascades still exist, but they can arrive earlier in the narrative, clearing positioning before the market ever gets to the blow-off top chapter. The result is a path that can feel like a series of risk cleanups punctuated by bursts of velocity.
This is also where the public disagreement among large financial voices becomes useful instead of confusing.
On one side, you have Bitwise’s “break the four-year pattern” stance in late 2025, and on the other, you have Fidelity’s Jurrien Timmer arguing the cycle still looks intact, even if 2026 could be a “year off” in his telling.
That split doesn’t mean one camp is right and the other is clueless. It’s safe to say that the old pattern is no longer the only usable model, and reasonable frameworks can disagree because the inputs are richer and they now include policy, flows, positioning, and market structure.
So what does a nuanced future of the cycle actually look like?
Think of it as three lanes, none of them dramatic enough for a meme, but all of them practical enough to trade and invest around:
- Cycle extension: the halving still matters, but the peak timing drifts later because liquidity and distribution take longer to work through traditional channels.
- Range then grind: Bitcoin spends longer digesting supply and positioning, then moves when flows and policy stop fighting each other.
- Macro slap: policy and cross-asset stress dominate for a stretch, and the halving becomes trivia in the face of redemptions and de-risking.
If there’s a clean moral we can distill this to, it’s this: calling the four-year cycle dead is a shortcut that sounds smart and means nothing.
The better and frankly only reasonable way to approach this is to say that Bitcoin now has multiple calendars, and the winners in 2026 won’t be the people who memorize one date.
They’ll be the people who can read the pipes: the cost of money, the direction of ETF flows, and the parts of the derivatives market where risk gets quietly piled up, then loudly unwound.
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