Four-year Bitcoin cycles are dead, Bitwise CIO says

Bitwise investment director Matt Hougan concluded that four-year cycles are no longer relevant for Bitcoin. The forces that shaped these cycles have weakened in the new environment.

The expert drew attention to the following changes:

• Halvings, which led to ”demand shocks,” have been replaced by steady, incremental purchases of cryptocurrency by institutions and corporations.

• The risk of collapse has been reduced by improved regulation and the institutionalization of the industry.

• The new trend for the next 5–10 years is the influx of funds into BTC ETFs. Traditional financial institutions are only just beginning to participate.

Legislative support, such as the recent passage of the GENIUS Act, is helping bring Wall Street players who will invest “billions in the coming years” in cryptocurrency, Hougan said.

He added that, in the context of macroeconomics, the correlation with changes in Fed interest rates has become positive, not negative as it was in 2018 and 2022.

However, he identified one “significant risk” to watch: a boom in the formation of corporate Bitcoin treasuries.

The day before, CryptoQuant founder and CEO Ki Young Ju admitted that the theory of the first cryptocurrency cycles no longer works. The analyst apologized for his previous erroneous forecasts.