Institutional Buyers May Break Bitcoin's Four-Year Cycle

Cathie Wood, CEO of Ark Invest, believes that Bitcoin's four-year cycle pattern may be weakening due to institutional investors accumulating supply through spot ETFs. This shift could reduce price volatility and change investment strategies built around halving events.

The traditional pattern of rallies following halvings, then significant crashes, is facing growing skepticism from banks and crypto firms. Standard Chartered recently slashed its 2025 price target for Bitcoin from $200,000 to $100,000, citing ETF inflows that dilute the halving's impact.

Wood points out that large financial firms and spot ETFs are absorbing coins that previously cycled through retail traders' hands. The April 20, 2024 halving reduced miner rewards to 3.125 BTC, cutting daily supply by roughly 450 Bitcoin. Some analysts consider this reduction modest against the asset's market capitalization and the billions flowing into ETFs.

Analysts now project future drawdowns between 25% and 40% rather than the severe declines of past cycles. Glassnode data shows that long-term holder behavior still resembles previous market swings, suggesting the cycle remains relevant within longer trends.