Beyond the Four-Year Cycle: How Bitcoin Halving, NFTs, and Institutional Capital Are Reshaping Market Cycles

The traditional “four-year cycle” theory—once considered the cornerstone of crypto market understanding—is undergoing a fundamental transformation. Seven industry veterans recently convened to dissect whether Bitcoin’s historical halving-driven cycle still holds relevance in an era dominated by spot ETFs, institutional allocation, and evolving market narratives. Their discussion reveals a market in transition, where hard mathematical constraints are giving way to soft expectations shaped by macroeconomic forces and structural adoption patterns.

The Cycle’s Evolution: From Supply-Side Mathematics to Liquidity-Driven Expectations

The four-year cycle traditionally rested on a simple supply-and-demand equation: Bitcoin’s halving events, occurring roughly every four years, reduce new supply, influence miner behavior, and create mathematical support for price appreciation. However, this foundation is crumbling as Bitcoin’s market capitalization expands exponentially.

Experts now argue the cycle is transitioning from a “hard constraint” (objective supply reduction) to a “soft expectation” (narrative-based market behavior). Jason, founder of NDV Foundation, reframes the entire concept: the four-year cycle isn’t primarily about halving code patterns—it’s a dual-driven model intertwining U.S. election cycles with global central bank liquidity expansion. When Bitcoin’s annual issuance adds only 600,000 coins to a supply of nearly 19 million, the $60 billion additional selling pressure becomes easily absorbed by Wall Street capital flows.

This observation reshapes how we understand market mechanics. The halving’s impact diminishes logarithmically with each cycle, yet its cultural significance persists. CryptoPainter, a quantitative analyst, points out that if miners historically generated substantial new supply, their market influence was proportional. Today, that leverage has evaporated, making macroeconomic variables—Federal Reserve balance sheet expansion, global M2 growth, and interest rate cycles—the true cycle drivers.

Why the Current Cycle Looks Weaker: Natural Diminishing Returns, Not Cycle Failure

April 2024’s Bitcoin halving saw prices rise from $60,000 to an all-time high of $126,000—impressive by most standards, yet historically modest. Altcoins performed worse, and spot ETF inflows ($50 billion+) appeared to dampen volatility rather than trigger explosive rallies.

This pattern reflects diminishing marginal returns, a principle applicable to all growth markets. As Bitcoin approaches trillion-dollar valuations, exponential returns become mathematically impossible. Doubling a $1.3 trillion asset would require capital inflows dwarfing those needed to double a $50 billion asset. Jack Yi notes this is the inevitable price of “mainstream assetization”—higher market cap equals lower volatility, a characteristic shared with traditional assets like gold and government bonds.

The deeper structural change stems from how institutional capital now absorbs supply shocks. Joanna Liang, founding partner of Jsquare Fund, explains: in previous cycles, retail marginal liquidity drove post-halving parabolic surges. In 2024, institutional ETF inflows arrived before and after halving, spreading gains over months rather than concentrating them in weeks. This fundamentally altered price formation patterns without signaling cycle failure.

Bruce, founder of Maiton MSX, offers a counter-perspective: halving still increases Bitcoin’s production cost—from $20,000 in the previous cycle to $70,000 post-halving. This cost floor remains a long-term price constraint, though expressed through smoother price dynamics rather than dramatic volatility spikes.

Are We in a Bull Market, Bear Market, or Something Else? The Data Conflict

The fragmentation of expert opinion mirrors market ambiguity. Bruce takes a distinctly bearish stance, citing declining miner profit margins (from ~70% in the previous cycle to ~40% today) and capital flowing toward AI assets rather than crypto. In mature industries spanning nearly two decades, declining cycle returns are normal. His timeframe suggests a probable severe economic crisis in 2026–2027.

CryptoPainter employs a technical lens: the market has already entered a technical bear phase (weekly close below the 50-week moving average), but hasn’t confirmed a true cyclical bear market. The distinction matters—technical weakness can precede multiple bull rally attempts. True bear confirmation requires macroeconomic recession signals. He notes stablecoin supply growth remains positive; only when stablecoin expansion stalls for two+ months would he declare cycle-level bearishness.

Conversely, most participants argue the four-year cycle has become increasingly irrelevant, replaced by a mid-to-late bull market correction phase transitioning toward a “slow bull” or fluctuating bull market. Jason and Ye Su base this on global liquidity dynamics: the U.S. possesses limited alternatives to monetary easing for debt management. Interest rate cuts have only begun, the liquidity “tap” remains open, and global M2 continues expanding. As long as central banks maintain loose conditions, crypto—the most liquidity-sensitive asset class—cannot sustain a true bear market.

The divergence itself is instructive: the four-year cycle’s predictive power has eroded enough that industry veterans reach contradictory conclusions from overlapping data.

The NFT Question: Why Altcoins and Digital Assets Lost Their Seasonal Momentum

One striking absence defines this cycle: the traditional “altcoin season,” where secondary tokens dramatically outperform Bitcoin. NFTs and altcoins remain historically weak, raising a crucial question about whether such phenomena are permanently obsolete or merely dormant.

Consensus emerged that traditional broad-based altcoin booms are unlikely to recur. Several factors converge: Bitcoin’s rising dominance created a “safe haven” status within risky assets, channeling institutional funds toward blue-chip holdings. Simultaneously, clearer regulatory frameworks now favor altcoins with real utility and compliance paths. Notably, this cycle lacks a killer app equivalent to DeFi or NFTs’ previous dominance—no new narrative sufficiently compelling to redirect capital flows.

CryptoPainter articulates the structural problem: the absolute number of altcoins and NFT projects has reached unprecedented, continuously expanding levels. Even massive macroeconomic liquidity cannot trigger broad-based price appreciation across thousands of tokens and NFT collections. Future asset outperformance will be highly selective, resembling the U.S. stock market’s “Magnificent Seven” concentration—blue-chip altcoins and projects with verifiable revenue streams will outperform, while countless small-cap tokens will experience occasional breakouts with negligible sustainability.

This represents a market structure shift from retail attention-driven dynamics to fundamentals-driven asset allocation. When institutions dominate capital deployment, financial metrics and long-term utility determine asset selection, not social sentiment and FOMO cycles. The corollary: both altcoin seasons and broad NFT booms require retail domination and limited quality assets—conditions that no longer exist.

What Experts Are Actually Holding: The Defensive Positioning Consensus

Despite surface-level disagreements about market phase, one consistent finding emerges: most senior practitioners have substantially liquidated altcoin exposure and maintain elevated cash/stablecoin allocations.

Jason favors a defensive-plus-long-term approach, preferring gold over U.S. dollars for cash management to hedge fiat currency depreciation. His digital asset allocation concentrates heavily in BTC and ETH, with cautious ETH positioning and preference for high-conviction assets (hard currency and exchange equity). CryptoPainter maintains a strict “50% minimum cash” policy, with core holdings in BTC and ETH (altcoins below 10%), and has exited gold positions entirely.

Jack Yi, displaying higher risk appetite, runs a nearly fully-invested fund, yet maintains concentrated structure: ETH as core, supplemented by stablecoin-based yields and major exchange assets. His thesis isn’t cyclical speculation but long-term blockchain adoption, stablecoin infrastructure growth, and exchange-based asset appreciation.

Bruce presents the starkest positioning: nearly complete crypto liquidation (including BTC sales around $110,000) with expectations to repurchase below $70,000 within two years. His U.S. stock holdings emphasize defensive/cyclical positions, with plans for substantial liquidation before next year’s anticipated macroeconomic shifts.

This positioning data matters more than rhetoric: when industry veterans collectively de-risk, they implicitly signal equilibrium between bullish narratives and bearish conviction.

Bottom-Fishing or Dollar-Cost Averaging? The Consensus on Capital Deployment

The most actionable question concerns buying strategy. Bruce’s pessimism extends here: the true bottom arrives when “no one dares to buy anymore”—a contrarian timing signal suggesting considerably further downside.

CryptoPainter advocates disciplined dollar-cost averaging below $60,000, employing the historical principle that buying after 50%+ declines from peaks has succeeded in every previous bull market. This target appears distant in the medium term. His scenario: 1-2 months of volatility, possible $100,000+ tests next year without new highs, followed by exhausted monetary policy tailwinds and reduced liquidity, culminating in formal bear market confirmation.

Most participants endorsed a middle position: avoid aggressive bottom-fishing, but embrace gradual position building through disciplined, phased allocation. The singular consensus: leverage and frequent trading destroy long-term returns; disciplined capital deployment and patience outweigh timing precision.

The Structural Driver of Long-Term Growth: From Sentiment to Adoption

If the four-year cycle weakens and future markets enter prolonged oscillating growth phases with compressed bear markets, what sustains the uptrend? The answer increasingly points to structural adoption replacing cyclical sentiment.

Jason emphasizes Bitcoin’s transition from speculative asset to institutional “digital gold.” As sovereign wealth funds, pension plans, and hedge funds normalize Bitcoin allocation on balance sheets, its performance trajectory mirrors gold—spiraling upward independent of halving cycles. Critically, stablecoins represent the infrastructure layer enabling this shift. Compared to Bitcoin’s limited user base expansion, stablecoins penetrate real economy payment, settlement, and cross-border capital flow infrastructure. This embeds crypto into actual financial commerce rather than pure speculation.

Joanna Liang echoes this perspective: institutional continued allocation—whether through spot ETFs or RWA tokenization—creates “compound interest” upward dynamics. Volatility smooths while trend direction persists upward. CryptoPainter grounds this in currency terms: as long as global liquidity remains loose and U.S. dollar weakness persists, BTCUSD trading dynamics (USD as the measured unit) preclude deep bear markets. Instead, successive technical corrections within broader bull patterns create gold-like “long-term oscillation, rise, repeat” rhythms.

Bruce remains unconvinced, citing unresolved structural economic problems: deteriorating employment, youthful complacency, wealth concentration, and persistent geopolitical risks. A severe 2026–2027 crisis probability is material, potentially ensnaring crypto in broader systemic collapse.

The slow-bull narrative itself is conditionally valid only if liquidity remains loose—a prerequisite increasingly questioned as fiscal pressures and geopolitical uncertainties mount.

Beyond the Cycle: A New Framework Emerges

Seven industry veterans debated whether a conceptual cornerstone of crypto investing—the four-year cycle theory—retains relevance. Their discussion reveals not a sudden failure but gradual obsolescence through market structure transformation.

From supply-constrained mathematics to macro liquidity dependency. From halving-driven narratives to institutional adoption foundations. From retail sentiment cycles to fundamentals-driven allocation. From broad altcoin seasons to selective blue-chip outperformance. These shifts don’t negate Bitcoin’s long-term value proposition; they recalibrate how we identify cycles, deploy capital, and measure conviction.

The traditional four-year cycle isn’t dead—it has evolved into something less predictable, more dependent on variables beyond token issuance schedules, yet potentially more sustainable as a long-term asset class. For investors, the takeaway isn’t to abandon cyclical thinking entirely, but to recognize that structural adoption, institutional flows, and macroeconomic liquidity now matter more than any single mathematical event.