Shift in Bitcoin’s Four-Year Cycle According to Ark Invest CEO
Cathie Wood, the CEO of Ark Invest, has expressed that the traditional four-year cycle associated with Bitcoin may no longer dictate its long-term performance. During an interview with Fox Business, Wood highlighted that institutional adoption is changing key factors such as volatility and the severity of future market downturns. She noted that the significant price drops previously seen—often between 75% and 90%—are becoming less frequent as large financial institutions accumulate Bitcoin. “The volatility is decreasing,” she stated, suggesting that institutional involvement “will mitigate further declines.” Wood also indicated that a recent low in Bitcoin’s price could potentially mark a turning point.
Changing Market Dynamics Post-Halving
Traditionally, Bitcoin’s price movements have been closely linked to its halving events, which occur approximately every four years and reduce the miner’s reward. The latest halving took place on April 20, 2024, lowering the reward to 3.125 BTC, a historical moment often associated with supply shortages and significant price rallies. However, Wood believes the market dynamics have evolved, with Bitcoin now behaving more like a risk-on asset, correlating more closely with stock markets and real estate rather than acting solely as a hedge. She pointed out that gold has transitioned into being a more risk-off asset, utilized by investors seeking protection against geopolitical turbulence. Ark Invest has continued to increase its cryptocurrency holdings by purchasing additional shares in Coinbase, Circle, and its own Ark 21Shares Bitcoin ETF (ARKB).
Debate on the Relevance of the Four-Year Cycle
Wood’s remarks come amid a broader discussion within the cryptocurrency sector, with various analysts suggesting that Bitcoin’s price is no longer influenced by halving cycles as it used to be. Recently, Standard Chartered noted that investments in Exchange-Traded Funds (ETFs) have diminished the halving’s historical impact on prices. Analyst Geoffrey Kendrick commented that the longstanding pattern of price peaks occurring 18 months post-halving is now “invalid,” prompting the bank to revise its 2025 price forecast from $200,000 to $100,000. The ongoing discourse on social media has intensified since late July, with prominent figures such as Bitwise Chief Investment Officer Matt Hougan and CryptoQuant founder Ki Young Ju asserting that institutional investments have effectively disrupted the traditional cycle. Ju stated bluntly, “The cycle is dead.”
A New Era for Bitcoin’s Market Behavior
For years, Bitcoin’s market has followed a predictable pattern: accumulation, a price surge connected to halving events, a peak, and then a prolonged downturn. However, after reaching a high of $122,000 in July, analysts observe that Bitcoin’s current behavior is more stable, gradual, and less influenced by retail speculation. Patrick Heusser from Sentora pointed to the concept of the Bitcoin Power Law, which suggests that price growth is a function of time rather than rigid four-year intervals. While Heusser acknowledged the importance of halvings, he argued they serve as minor disruptions in a larger, ongoing trend. The daily reduction in supply, he noted, is only 450 BTC—a trivial figure compared to Bitcoin’s overall market capitalization and the significant inflow into spot ETFs.
Institutional Accumulation as a Market Reshaper
The surge in institutional accumulation, through vehicles like ETFs, corporate treasuries, and newly regulated products, is widely recognized as a major factor reshaping the Bitcoin market. These institutional investors typically maintain their positions long-term, which helps to stabilize supply and reduce volatility in the market.
Contrasting Views on Bitcoin’s Cycle Integrity
Despite the growing trend of institutional investment, some analysts argue that the traditional four-year cycle remains relevant. In August, Glassnode released findings suggesting that the current market cycle’s structure is consistent with previous cycles, particularly in terms of the behavior of long-term holders and the softening of demand in late cycles. They contend that Bitcoin’s timing still aligns with historical peaks, challenging the narrative that the cycle has ended. Most experts agree, however, that investors should brace for a market characterized by prolonged trends rather than sharp fluctuations. They predict that any future crashes might be shallower, ranging from 30% to 50%, in contrast to the severe declines seen in the past, although price rallies might extend over longer durations. Macro analyst Lyn Alden recently observed that the current market lacks the exuberance typically associated with major downturns and emphasized that broader economic factors will likely dictate Bitcoin’s trajectory. She anticipates that Bitcoin could reach the $100,000 mark by 2026, albeit with an uneven path to that milestone.
