The '4-Year Cycle', long viewed as the iron law of Bitcoin's bull and bear cycles, may be approaching its final chapter. Research institution K33 Research states that as the Bitcoin market gradually matures, the cyclical patterns previously influenced by 'halving' are likely no longer applicable.
To reduce the issuance speed and curb inflation, the Bitcoin blockchain undergoes mining reward halving every 4 years, with the most recent halving occurring in April 2024.
Previously, Bitcoin has experienced three halving events in November 2012, July 2016, and May 2020, and all three halvings were regarded as the beginnings of bull markets. Bitcoin often refreshes its historical highs in the year following a halving.
Furthermore, observing the last two bull market peaks, they generally occurred about 1,060 days after the previous bottoms. If following past cycles, Bitcoin should peak this October.
However, K33 Research analysts believe that this narrative no longer reflects the current market landscape and may not be applicable anymore.
The report indicates that the halving effect today is far less significant than in the past. In earlier years, with a limited Bitcoin market size and low circulation, the supply shock from halving could easily trigger a surge in coin prices.
In contrast to the current market landscape, with institutional funds pouring in and sovereign nations also making moves, as Bitcoin gradually enters the mainstream asset system, it is no longer just a simple supply and demand game. Factors like macroeconomics, inflation pressure, and geopolitical risks are the real drivers influencing market trends.
K33 Research asserts that Bitcoin is transitioning from a highly speculative asset with 'reflexivity' (where rising prices attract buyers, further pushing up prices) to a more mature 'reactive' store of value.
"The 'Halving Effect' is no longer effective! K33 Research: Bitcoin's '4-Year Bull and Bear Cycle' law has become invalid" This article was first published on (Blockke).
