Breaking the Cycle: Why Bitcoin’s Future Might Not Be Tied to Its Four-Year Pattern

For years, Bitcoin’s price has been closely tied to its four-year cycle, with many investors and analysts expecting the cryptocurrency to follow a predictable pattern of boom and bust. However, Matt Hougan, Chief Investment Officer at Bitwise, is challenging this conventional wisdom. He believes that Bitcoin is poised to break free from its historic cycle and achieve significant profits in 2026, a prediction that deviates from the mainstream expectation of a cycle top later this year.

The Case for a New Cycle

Hougan’s argument is based on several factors that he believes are overriding the influence of the halving cycle. For one, he notes that the effects of halving are weakening over time, as the reduction in rewards becomes less significant in absolute terms. Additionally, he points to improvements in regulation and the increasing institutionalization of the space, which are reducing the risk of market shocks. The continued adoption of Bitcoin by traditional companies could also extend the cryptocurrency’s bull run beyond its historical schedule.

Risks and Challenges

While Hougan is optimistic about Bitcoin’s future, he also acknowledges the potential risks and challenges. The rise of Bitcoin financial companies, which buy BTC with debt or equity issuances, could be a source of vulnerability if the market turns. Asset manager Vaneck has also expressed similar concerns, warning that such companies could be overexposed if the market declines. Despite these risks, Hougan remains confident that the progress made so far will continue, describing the future as “more of a steady boom” rather than a super cycle.

Contrasting Views

Not everyone shares Hougan’s optimism, however. Crypto analyst Rekt Capital has warned that if the 2020 cycle repeats, Bitcoin could peak in October, just 550 days after the halving in April 2024. This would suggest that Bitcoin is still firmly tied to its historical rhythm, and the debate about its future trajectory is far from settled. Meanwhile, other analysts, such as Tom Lee, are making bold predictions about Bitcoin’s long-term price, with some forecasting a potential price of $1 million or more.

A New Era for Bitcoin?

Lee’s prediction is based on Bitcoin’s growing reputation as a store of value, which he believes could challenge gold’s dominance. With regulatory progress, such as the approval of the ingenious law, and increasing institutional adoption, the stage may be set for a new era in Bitcoin’s history. Whether or not the cryptocurrency can break free from its four-year cycle remains to be seen, but one thing is clear: the future of Bitcoin is looking increasingly uncertain – and potentially very bright.