For over a decade, Bitcoin's halving event has always been seen by traders as a 'golden' signal indicating a strong price increase ahead. However, this cycle was officially broken in 2024 when Bitcoin peaked before the halving – for the first time in history.

Derivatives trading experts believe that the bullish trend before halving may become a 'familiar scenario' for future cycles. The reason lies not only in the technical aspects of the network but also in the structural changes in the market as Bitcoin has deeply integrated into the traditional financial system.

The 4-Year Cycle and the Decline of a 'Rule'

Since its inception in 2008, Bitcoin operates under Satoshi Nakamoto's principle of scarcity, with a mechanism to halve the block reward every 4 years – known as halving.

In previous cycles, such as 2016 and 2020, Bitcoin's price often peaked a few months after the halving, when the supply shock actually occurred. The popular strategy for investors then was to 'buy the dip' during bear market phases and wait for a breakout post-halving.

But 2024 witnessed a completely different scenario: Bitcoin reached a historical peak in March 2024, before the halving took place in April.

Reasons for the Price Peak Before Halving 2024

Unlike previous instances, this price surge is not driven by a wave of FOMO from retail investors, but is led by a demand shock from a new group of investors – large financial institutions.

According to Gordon Grant, former CEO at Genesis and cryptocurrency derivatives expert, these are the 'top-tier allocators' – including institutional investment funds, corporate treasuries, and long-term funds.

Their differentiating factor:

  • No short-term trading.

  • Do not wait for prices to drop significantly before buying.

  • They accumulate Bitcoin at high prices, with a long-term vision.

  • Some businesses are even raising funds through issuing stocks, convertible bonds… just to increase their Bitcoin holdings.

The goal of this group is to accumulate as quickly as possible, viewing Bitcoin as a strategic reserve asset rather than a short-term speculative tool. The emergence of this massive capital flow has pushed prices to record levels even before the supply reduction.

Halving is Losing Its Appeal as a 'Catalyst'

In the past, halving was a strong psychological factor for investors, as they expected supply shock to drive prices up. But now, institutional investors have gotten ahead – they understand the supply-demand story and accumulate before the event.

Grant states: 'Like many other alpha signals, halving has been 'priced in' by the market, and the surprise effect is no longer there.'

Joshua Lim, Global Markets Director at FalconX, also believes that Bitcoin is now more influenced by the global liquidity cycle than by the halving cycle.

Bitcoin – From Independent Asset to Macro Indicator

The participation of institutional capital has transformed Bitcoin from a non-correlated asset to a part of the global financial market.

  • Now, Bitcoin is increasingly compared to gold, reflecting global liquidity trends and the strength of the USD.

  • Price volatility is influenced by central bank interest rates, inflation, international capital flows, and other macro factors.

  • The risk and return profile of Bitcoin is starting to co-vary with other major asset classes such as AI technology, energy, fintech, or growth stocks.

This marks a turning point: Bitcoin no longer moves independently according to intrinsic cycles, but synchronizes with the 'flow' of the global financial landscape.

Investment Strategies in a New Era

According to Grant and Lim, the halving cycle is not completely 'dead', but has morphed into a more complex phenomenon, primarily influenced by institutional buying power and macro context.

This means:

  • Investors cannot solely rely on the '4-year rule'.

  • Factors such as Fed monetary policy, inflation data, and global liquidity will carry greater weight in the analysis.

  • Long-term strategies need to adapt to the reality that Bitcoin has officially become a macro asset.

Conclusion

The event in 2024 is not just a small deviation in history, but it could mark the beginning of a new cycle – where Bitcoin is valued as a global strategic asset. Investors, whether individual or institutional, must change their perspective and analytical tools if they want to keep up with the new rhythm of the market.