Grayscale Analysis Suggests Bitcoin May Be Breaking Free From Traditional Four-Year Cycle

Institutional Forces Reshape Bitcoin Market Dynamics

Bitcoin's traditional four-year price cycle, long considered a reliable framework for understanding the cryptocurrency's market behavior, may be losing its predictive power as institutional capital and macroeconomic factors take center stage, according to recent analysis from investment firm Grayscale.

Since Bitcoin's inception, the cryptocurrency has followed a relatively predictable pattern tied to its programmed halving events, which occur approximately every four years and reduce new BTC issuance by 50%. These supply shocks historically preceded major bull markets in 2013, 2017, and 2021 ^[1]. However, Grayscale's latest research, supported by onchain data from Glassnode and market insights from Coinbase Institutional, suggests the mid-2020s market operates under fundamentally different conditions.

Three Key Structural Shifts

Grayscale identifies three primary differences distinguishing the current market from previous cycles. First, institutional investors now dominate demand rather than retail traders who drove earlier rallies. Capital flows increasingly come from exchange-traded funds (ETFs), corporate balance sheets, and professional investment funds, bringing patient, long-term capital contrary to the emotion-driven retail trading of past cycles ^[1].

Second, Bitcoin's recent price rise has been notably more controlled than the explosive rallies of 2013 and 2017. The subsequent 30% decline "resembles a typical bull-market correction" rather than signaling the beginning of a multi-year bear market, Grayscale notes ^[1].

Third, macroeconomic factors now exert significant influence on Bitcoin's price. Interest-rate expectations, bipartisan US crypto regulatory momentum, and Bitcoin's integration into institutional portfolios increasingly shape market behavior independent of the halving schedule ^[1].

Onchain Data Supports Structural Change

Glassnode's onchain research reveals several departures from historical norms. Long-term holders now control a larger proportion of circulating supply than ever before, limiting available trading supply and reducing the supply-shock effect typically associated with halvings ^[1].

Despite significant price corrections in late 2025, realized volatility has remained well below levels seen at previous cycle turning points, suggesting more efficient market handling of large moves due to greater institutional participation ^[1].

Onchain data also shows growing transfers into custody wallets tied to ETFs and institutional products, where coins tend to remain dormant. Over the past two weeks, more than 25,000 BTC left exchange order books, with Glassnode data putting two-week exchange outflows closer to 35,000 BTC ^[2].

"Bitcoin ETFs and corporate treasuries now collectively hold more BTC than exchanges, a meaningful shift that signals supply migrating into longer-term custody and tightening the available float," noted trading firm QCP Capital ^[2].

Recent Price Action Reflects New Dynamics

Bitcoin's recent price movements illustrate these changing dynamics. Having passed $92,000 during the Asia trading session, BTC/USD quickly lost upward momentum and abandoned a potential retest of the yearly open at $93,500 ^[2]. Even Strategy's announcement of purchasing nearly 10,624 BTC—worth almost $1 billion at an average cost just over $90,000 per coin—failed to significantly boost market confidence ^[2].

Debate Continues Among Analysts

Not all analysts agree the four-year cycle has lost relevance. Some continue arguing that halvings remain the primary driver, noting that the halving represents a fundamental and irreversible supply cut, and that long-term holder activity continues clustering around halving periods ^[1].

Nevertheless, Grayscale emphasizes that analysts are increasingly focusing on onchain metrics, liquidity trends, and institutional flow indicators rather than fixed halving-based timing models. While corrections remain inevitable and can still be severe, they no longer automatically signal prolonged bear markets in this evolving framework ^[1].