If history is anything to go by, then Bitcoin should plunge next year—and crypto markets will be in the red. But just because it’s happened before doesn’t mean it will happen again.
One of the hottest debates raging right now across the crypto industry is whether or not Bitcoin will stick to its usual four-year cycle. Experts have been chiming in from both sides of the spectrum, and Crypto X is rife with hot takes (as ever).
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Last year, Bitcoin did something it hadn’t done before when it hit a new high ahead of the halving, following the approval of spot Bitcoin ETFs. This has led some analysts and observers to believe that Bitcoin’s typical cycle—when the coin hits a high the year after its halving, only to plunge by 70-80% the following year—is finished.
“It’s just common sense,” Bloomberg Intelligence Senior ETF Analyst Eric Balchunas told Decrypt. “More stable owners, more stable price,” he added, referring to the ETF investors.
The approval of ETFs in January 2024 allowed millions of dollars in capital previously locked out of the markets to flood into the space. Months after they started trading, the leading cryptocurrency hit a new all-time high. The coin has since broken new highs off the back of crypto-friendly President Donald Trump’s victory, rising yet again to a fresh peak last week.
Investors in the space are now more sophisticated, too: Institutions from Harvard University and Goldman Sachs have bought Bitcoin—and via the ETFs, no less. Such investors are less likely to panic-sell, and are buying to hold for the long term, Balchunas said.
“I think the ETF kicked off this new phase, and I don’t know if the four year cycle would apply. I don’t want to say never, but again, you have to use common sense,” he said. “Volatility is based on the people who hold it.”
Bitcoin was recently trading for $115,492 per coin, up more than 2% over the past day and by 22% year-to-date, according to CoinGecko. It broke a new record of $124,128 on August 14.
In the previous bull run, Bitcoin peaked at a high of $69,044 in November 2021. But the hype didn’t last and a brutal correction occurred, leading Bitcoin to crash below $16,000 in November 2022 after a long list of crypto companies went bankrupt following the collapse of Terra—most notably the prominent digital asset exchange, FTX.