Key takeaways
The pricing pattern influenced by halving events is losing its effectiveness as increased BTC supply diminishes the relative impact of each halving.
Grayscale indicates that institutional investment currently shapes the Bitcoin market more than preceding cycles characterized by retail speculation.
Unlike the volatile surges seen in 2013 and 2017, Bitcoin’s most recent price increase has been more stable, with a 30% decline reflecting a typical bull-market correction.
Market dynamics are increasingly influenced by interest-rate expectations, bipartisan US regulatory efforts, and Bitcoin’s role in institutional investment portfolios.
Since its inception, Bitcoin’s (BTC) pricing has adhered to a predictable pattern, wherein programmed events halve Bitcoin supply, creating scarcity that often leads to sharp price increases followed by corrections. This cycle, known as the four-year cycle, has significantly shaped investor expectations since Bitcoin’s early days.
Recent analysis from Grayscale, supported by onchain data from Glassnode and insights from Coinbase Institutional, suggests a departure from this traditional model. Price fluctuations in the mid-2020s may increasingly reflect institutional demand and broader economic conditions.
This article delves into Grayscale’s perspective that the four-year cycle framework may no longer adequately explain Bitcoin’s price movements. It examines Grayscale’s insights on Bitcoin cycles, evidence from Glassnode, and arguments from analysts who believe in the continued relevance of the four-year cycle.
The traditional four-year cycle
Bitcoin halvings, occurring roughly every four years, cut the issuance of new BTC in half. Historically, these supply reductions have consistently preceded significant bull markets:
2012 halving — peak in 2013
2016 halving — peak in 2017
2020 halving — peak in 2021.
This pattern emerged from both a built-in scarcity mechanism and investor psychology, where retail traders primarily drove demand and reduced supply sparked robust buying.
However, with an increasing proportion of Bitcoin’s fixed 21 million supply already circulating, each halving exerts a diminishing relative impact, leading to questions about the sustained dominance of supply shocks in dictating the cycle.
Did you know? Since 2009, halvings have occurred in 2012, 2016, 2020, and will next occur in 2024. Each event has permanently decreased Bitcoin’s inflation rate and moved annual issuance closer to zero, while reinforcing BTC’s narrative of digital scarcity for long-term holders and analysts.
Grayscale’s assessment of Bitcoin cycles
Grayscale argues that the present market diverges significantly from previous cycles in three key areas:
Institutional-dominated demand, not retail mania
Earlier cycles heavily relied on strong purchasing by individual investors through retail platforms. Currently, capital flows are increasingly driven by exchange-traded funds (ETFs), corporate balance sheets, and professional investment funds.
Grayscale notes that institutional investment vehicles attract patient, long-term capital, contrasting with the impulsive retail trading patterns of 2013 and 2017.
Absence of a rally preceding the drawdown
The significant price peaks of 2013 and 2017 were characterized by extreme, unsustainable surges followed by dramatic drops. In 2025, Grayscale has noted that the recent price increase has been more controlled, and the subsequent 30% decline appears more like a standard correction in a bull market, rather than signaling the start of a prolonged bear market.
Macro environment that matters more than halvings
In Bitcoin’s earlier years, price fluctuations were largely insulated from global economic trends. By 2025, Bitcoin’s price has grown sensitive to liquidity conditions, fiscal policies, and institutional risk sentiment.
Grayscale cites key factors such as:
Anticipated shifts in interest rates
Increased bipartisan support for US crypto legislation
Bitcoin’s integration into diversified institutional portfolios.
These macro factors exert influence independently of the halving schedule.
Did you know? When block rewards are halved, miners earn fewer BTC for the same amount of work. This can prompt miners facing higher costs to temporarily pause operations, often leading to short-term hashrate declines before the network adjusts.
Glassnode data showing a break from classic cycle patterns
Glassnode’s onchain research indicates that Bitcoin’s price has deviated from historical patterns in several ways:
Long-term holder supply is at historically high levels: Long-term holders now control a larger share of circulating supply than ever, with continued accumulation limiting the Bitcoin available for trading, thus diminishing the supply-shock effects usually linked to halvings.
Reduced volatility despite drawdowns: While late 2025 saw significant price corrections, realized volatility remains well below earlier cycle turning points. This suggests the market is managing large moves more efficiently, likely due to greater institutional participation.
ETFs and custodial demand reshape supply distribution: Onchain data reveals increasing transfers into custody wallets associated with ETFs and institutional products. Coins in these wallets tend to remain inactive, limiting the Bitcoin circulating in the market.
A more flexible, macro-linked Bitcoin cycle
Grayscale asserts that Bitcoin’s price behavior is gradually diverging from the four-year cycle model, becoming more attuned to:
Steady long-term institutional capital
Improving regulatory environments
Global macroeconomic liquidity
Sustained ETF-related demand
An expanding base of committed long-term holders.
Grayscale emphasizes that while corrections remain a certainty and can be significant, they do not automatically herald the beginning of a lengthy bear market.
Did you know? Post-halving, Bitcoin’s inflation rate declines sharply. Following the 2024 halving, annual supply inflation dipped below that of many major fiat currencies, further enhancing its comparison to scarce assets like gold.
Why some analysts still believe in halving patterns
Certain analysts, referencing Glassnode’s historical cycle overlays, maintain that halvings continue to be the primary influence. Their arguments include:
Halvings represent a fundamental and irreversible supply reduction.
Long-term holder activity tends to concentrate around halving events.
Retail-driven trading could re-emerge, even with growing institutional participation.
These varying perspectives illustrate that the debate remains unresolved. Discussions around Bitcoin potentially bypassing the four-year cycle indicate a dynamically shifting market.
An evolving framework for understanding Bitcoin
Grayscale’s argument against the supremacy of the traditional four-year cycle is supported by distinct structural shifts, including increasing institutional involvement, deeper integration with global macro conditions, and lasting supply dynamics changes. Supporting evidence from Glassnode and Coinbase Institutional confirms that today’s Bitcoin market is influenced by more sophisticated mechanisms compared to the retail-driven cycles of the past.
As a result, analysts are shifting focus away from rigid halving-based timing models toward onchain metrics, liquidity trends, and institutional flow indicators. This refined approach captures Bitcoin’s ongoing evolution from a niche digital asset to a prominent component of the global financial landscape.
This article does not constitute investment advice or recommendations. Every investment and trading decision carries risk, and readers should conduct their due diligence before making choices. While we aim to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any data in this article. It may contain forward-looking statements that are subject to risk and uncertainty. Cointelegraph will not be liable for any loss or damage resulting from reliance on this information.
