The long-standing '4-year cycle' that has been seen as the iron law of Bitcoin bull and bear markets may be approaching its final chapter. Research institution K33 Research indicates that as the Bitcoin market matures, the cyclical patterns once driven by 'halving' events affecting price fluctuations may no longer apply.
To reduce issuance speed and curb inflation, the Bitcoin blockchain undergoes a mining reward halving approximately every four years, with the most recent halving occurring in April 2024.
Previously, Bitcoin experienced three mining reward halvings in November 2012, July 2016, and May 2020, all of which were regarded as the beginnings of bull markets. Bitcoin often reaches new historical highs the year following a halving.
Further observation shows that the peaks of the last two bull markets roughly occurred about 1,060 days after the bottoms of the previous cycles. If we extrapolate based on past cycles, Bitcoin should ideally peak in October this year.
However, K33 Research analysts believe that this script can no longer reflect the current market landscape and may not be applicable anymore.
The report points out that today's halving effect is far less significant than in the past. In the early years, the Bitcoin market was limited in scale and circulation, making it easy for the supply shock from halving to trigger a surge in coin prices.
In contrast, the current market landscape, with institutional funds pouring in and sovereign nations also making moves, indicates that as Bitcoin gradually enters the mainstream asset system, it is no longer just a simple supply and demand game. Factors such as the overall economy, inflationary pressures, and geopolitical risks are the true driving forces affecting trends.
K33 Research bluntly states that Bitcoin is transitioning from a highly speculative asset marked by 'reflexivity' (where rising prices attract buyers, further driving up prices) to a more mature 'reactive' store of value.
This article is republished with permission from: (Blockke)
Original title: ('Halving Effect' No Longer Valid! K33 Research: The '4-Year Bull and Bear Cycle' Law of Bitcoin Has Failed)
Original author: Block Sister MEL
'The Bitcoin Halving Effect Is No Longer Valid! Expert Analysis: Why the 4-Year Bull and Bear Cycle Has Failed?' This article was first published in 'Crypto City'.
