Four-Year Cycles Aren’t Dead — Here’s Why
“Every time we hear ‘this time is different,’ the cycle proves it isn’t.”
Every four years, Bitcoin’s market follows a remarkably consistent rhythm shaped by one mechanical event: the Bitcoin halving. Roughly every 210,000 blocks, the network cuts the mining reward in half, slowing new supply.
Each halving has historically led to the same sequence: accumulation → parabolic rally → speculative peak → collapse and recovery.
2012–2014: The first halving ushered in Bitcoin’s earliest true bull market, pushing prices from double digits to over $1,000 before the Mt. Gox collapse marked the first great crash.
2016–2018: The second halving led to the 2017 mania and Initial Coin Offering (ICO) boom, before the 2018 bear was triggered by China’s crackdown and the overwhelming number of token issuances.
2020–2022: The third halving kicked off crypto’s institutional era—MicroStrategy, Tesla, and ETFs—culminating in the 2021 high. This was shortly followed by the 2022 collapse, fuelled by the downfall of LUNA, Three Arrows Capital (3AC), and FTX.
2024 onward: The most recent halving occurred on 19 April 2024, cutting issuance to 3.125 BTC. We are now midway through this fourth cycle.
The pattern has repeated so precisely that some analysts estimate the peak usually comes 12–18 months after each halving. The mechanism is self-reinforcing: lower supply, rising demand, euphoric speculation, and eventual exhaustion.
We’ve Heard “This Time Is Different” Before — The Supercycle That Wasn’t
If the “Bitcoin cycle is dead” narrative sounds familiar, that’s because we’ve lived through it before.
During the 2020–2021 bull run, the crypto industry rallied behind the so-called “Supercycle” thesis — the idea that Bitcoin and various top cryptos at that time had matured beyond its “dump” characteristics and we would go “up only”. Protocol advancements in blockchain technologies and various sectors like NFT, GameFi, and DeFi with unprecedented liquidity were all proof that this time would be different.
The argument seemed plausible then. Tesla was adding Bitcoin to their balance sheets, Elon Musk was on live TV shilling Dogecoin, and diamond-handed retail traders were all making profits. DeFi and NFTs were rewriting what on-chain finance could be. Many industry influencers predicted that, with so many new participants and applications, Bitcoin and even top altcoins would no longer suffer the same ～70% drawdowns that had defined crypto’s earlier history.
But the “supercycle” collapsed under its own weight. What followed was a brutal reminder of how deeply cyclical crypto remains: the implosion of LUNA/UST, the liquidation of Three Arrows Capital, and the bankruptcy of FTX erased hundreds of billions in market value and sent Bitcoin down nearly 80 percent from its highs.
Today, a subtler version of the same optimism is back; with spot ETFs, institutional flows, and deeper liquidity, the market has finally evolved past the boom-bust rhythm. But history rarely retires so easily. The same confidence that crowned 2021’s peak is echoing once again.
Why the Cycle Still Exists — The Structural Logic of Crypto
Even with ETF inflows and Wall Street infrastructure, crypto remains a deeply cyclical industry by design.
Crypto’s expansion mechanics make this inevitable. When sentiment turns bullish, new coins appear overnight, projects raise millions, and liquidity floods into perpetuals and leverage. That explosion of issuance and leverage drives prices higher — until it doesn’t.
Crypto’s perpetual futures dominate in trading volumes, meaning price action is governed as much by liquidation mechanics as by organic demand. High leverage makes rallies look effortless and crashes catastrophic. The industry’s reflexive nature — narratives feed price and price feeds narrative — guarantees over-extension.
Eventually, new supply of tokens, dilution of attention, and the fatigue of over-leverage erode momentum. When the marginal buyer disappears, the same structural features that built the rally reverse direction. This built-in feedback loop ensures that crypto doesn’t escape cycles — it embodies them.
The Current Cycle — Under-Performance and Cracks Beneath the Surface
Here is why we believe the cycle is playing its magic and the “invisible hand” behind price actions: despite favorable headlines in 2025 — spot ETF approvals, institutional inflows, and record-high gold and equity prices — Bitcoin has underperformed almost every other major asset. The only reasonable explanation seems to be bitcoin’s 4-year cycle.
U.S., Chinese, Korean, and Japanese equities gained roughly 20–30 % YTD, driven by global liquidity and easing inflation fears.
Gold reached repeated record highs, up 50% YTD, reinforcing its safe-haven appeal.
Bitcoin, by contrast, is up only about 9% YTD, still below its 2021 peak.
If the cycle had truly ended, Bitcoin should be leading this risk-on environment — not lagging it. Its relative weakness implies we are approaching the final phase of the cycle — wind down and recovery. Further evidence is the crypto ecosystem is again showing internal “cracks” for a deep correction that is internally only for the crypto market.
On October 10–11 2025, crypto markets suffered the largest liquidation cascade in history, wiping out nearly US $19 billion in leveraged positions in under 24 hours. Market-makers and prop desks were forced to unwind, triggering flash crashes across altcoins. Weeks later, Stream Finance, a DeFi protocol once had hundreds of millions in TVL, disclosed $93 million in losses, froze withdrawals, and watched its xUSD stable-coin collapse over 70%.
These are not macro shocks. They are crypto-native fractures, surfacing precisely when leverage, complacency, and cyclical fatigue converge — just as in past cycles.
The Cycle Persists – A Counter-Perspective
We advise traders to consider an alternative viewpoint: what if the established rhythm still holds? Each halving still matters. Each bull run still tends toward excess. Each crash still offers a reset. Bitcoin’s recent performance and the re-emergence of structural cracks might not be anomalies—they could be confirming that the underlying rhythm is intact.
Whether the next explosive rally comes in six months or a year, the same internal logic may guide it. And when the market once again insists “this time is different,” the historical cycle may, quietly and predictably, offer a strong argument otherwise.
BitMEX Blog
