By Brett Munster
Is bitcoin’s four year cycle over?
For most of its 15-year history, the crypto market has moved to a familiar four-year cadence. Explosive growth one year, a sharp collapse the next, a period of consolidation that stabilizes the market at a higher floor than the previous cycle, and then a buildup of momentum leading into the next surge. Some attribute this “three-up, one-down” rhythm to bitcoin’s programmed halving cycle, while others argue its correlated to fluctuations in macroeconomic liquidity. Regardless of the driver, this pattern had become deeply embedded in the expectations of investors.
However, the past 18 months has thrown a curveball into that script. The launch of U.S. spot-Bitcoin ETFs in January 2024 fundamentally altered how BTC—and thus, the broader crypto market—trades. Rather than unfolding in the classic pattern, price action has since resembled a stair-step—sharp, short bursts of upward appreciation followed by extended periods of consolidation. For example, pent-up demand catapulted bitcoin from $46,000 to over $70,000 in early 2024, a post-election wave lifted it from $60,000 to $100,000 in late 2024, and renewed inflows drove it from $85,000 to $124,000 in mid-2025. In between these leaps we have had months of relatively flat trading ranges.
This isn’t coincidental. Spot-Bitcoin ETFs have radically broadened access to bitcoin for traditional investors and institutions, removing barriers that previously prevented large allocators from entering the space. Regulatory clarity further unlocked a flood of capital that is being deployed methodically: funds are built incrementally, rebalanced, reallocated—not thrown into speculative frenzy.
Today, U.S. spot Bitcoin ETFs hold roughly 1.3 million BTC, while the top 100 corporate treasuries collectively own nearly 1 million BTC—together amounting to over a quarter-trillion dollars in effectively locked capital, much of it held long-term. This represents a fundamental shift from retail-driven “FOMO and meme culture” cycles to a more disciplined, institutionally oriented regime. Market structure today is shaped less by hype than by portfolio management—and that shift manifests in the data.
Bitcoin’s day-to-day volatility has compressed markedly since the ETF era began. Both implied volatility and realized volatility sit near cycle lows, at times trailing even major equity indices. In October 2024, monthly volatility in Tesla, AMD, and Nvidia exceeded that of bitcoin and in April 2025, bitcoin’s short-term realized volatility even dipped below that of the S&P 500 and Nasdaq 100. A growing body of research confirms this link: ETF approvals are associated with reduced volatility, thanks to steady institutional inflows that both dampen spikes and provide support on the downside.
Think of it this way: instead of riding euphoric waves fueled by retail momentum, bitcoin’s current rally is built on more measured, portfolio-based demand.
On-chain signals reinforce this, too. Transaction counts remain moderate compared to prior highs, while total transaction volume has surged—implying fewer trades moving much larger sums. Institutional investors, corporations, and even sovereign entities now play a central role in price formation, with retail participation a shrinking share of activity so far this cycle.
The data over the past 18 months clearly suggests that current rallies are institutionally powered. ETF and corporate demand are today’s primary short-term price drivers—and if this trend endures, bitcoin’s role in global markets could evolve in several meaningful ways.
First, a sustained decline in volatility would transform bitcoin’s risk profile. Historically, its volatility dissuaded financial advisors, pension funds, and endowments from making allocations—until now. If volatility converges with that of equities or gold, bitcoin might be seen not as a speculative side bet, but an alternative core asset. That shift could open the door to allocations of 3% – 10% in most model portfolios (with some prominent financial advisors recommending upwards of 40%), elevating bitcoin’s role in mainstream finance.
Lower volatility would also unlock new financial products. Bitcoin becomes a more attractive collateral when sharp drawdowns are rare—lowering borrowing costs on BTC-backed loans. It enables insurers to underwrite BTC custody and launch crypto-denominated policies with confidence. Banks and asset managers could structure mainstream products—such as bitcoin notes or hybrid yield instruments—expanding crypto’s financial footprint.
We may also see a sharper bifurcation in the crypto market, with major assets like bitcoin and Ethereum—the only cryptoassets currently with U.S.-listed ETFs—evolving into highly liquid, lower-volatility instruments that are increasingly integrated with traditional financial markets. Conversely, the long tail of smaller cryptoassets is likely to remain far more volatile and speculative, capable of delivering eye-catching gains during bull runs but equally prone to brutal drawdowns in downturns. This growing divergence points to the emergence of a two-tiered market structure: “blue-chip” institutional assets that behave more like established alternatives and a broader ecosystem of high-beta tokens where both risk and opportunity remain elevated.
So the question now is whether we’re on the verge of another parabolic rally that ends in a sharp 2026 correction—or if the familiar four-year cycle has finally been left behind. How the next several months unfold will be critical, and we’re watching a few key scenarios closely as we shape our strategy heading into 2026.
In Scenario 1, history holds: a parabolic rally takes shape in the second half of 2025, mirroring prior cycles that have typically peaked in Q3 or Q4. Notably, volatility has been falling even as prices climb—a pattern that preceded the 2017 bull run, as highlighted by Semler Scientific’s Joe Burnett. Combined with strong institutional inflows, supportive macro liquidity, and the recent outperformance of Ethereum, Solana, and other altcoins, the setup suggests we may be entering the early stages of a broader “crypto mania.” In this environment, the prudent approach is to ride the momentum strategically while preparing for the inevitable turn—systematically rebalancing and locking in gains as warning signals emerge. The goal isn’t to call the exact top, but to preserve capital and protect profits when the cycle shifts.
Scenario 2 envisions another institutional inflow leg followed by prolonged consolidation—a stair-step rather than a spike. This trajectory supports the thesis of sustainable, measured growth. As Blockware’s Mitchell Askew puts it, bitcoin’s market before ETFs and the market today are “entirely different assets.” We’re entering an era of “oscillation between pump and consolidate that will bore everyone to death,” but steadily builds toward higher valuations—possibly even as high as $1 million over time.
In that scenario, traditional cycles lose much of their predictive power. Instead, investors would look to ETF flows and global liquidity as the primary signals of demand pressure and market sustainability. The resulting step-ladder pattern of growth—sharp upward moves followed by extended consolidations—may actually prove to be a healthier, more sustainable trajectory than the boom-and-bust cycles of the past, with the potential to carry well into 2026 and even 2027. In this environment, it makes sense to maintain our current portfolio allocation, allowing our algorithms to capitalize on range-bound opportunities while keeping us positioned for the next breakout whenever it arrives.
By the end of 2025, we will likely know whether the traditional four-year cycle still holds sway or whether the ETF era has rewritten the rules. If bitcoin delivers another parabolic run into late 2025, history will be repeating itself—the familiar boom-and-bust rhythm playing out once again, likely followed by a sharp correction in 2026. But if instead we see the step-ladder growth pattern continue, the implications go far beyond price. A measured, lower-volatility advance would mark a profound structural shift: bitcoin evolving into a mainstream portfolio asset, integrated into model allocations, and unlocking new financial products.
Until then, our edge lies not in guessing the outcome but in preparing for both. Our strategies are designed for multiple scenarios, stress-tested against real-time data, and adaptive to shifting conditions. Whether bitcoin soars in speculative mania or grinds steadily upward on institutional flows, we will act on data—not hype, not headlines, and not hope. In a market as dynamic as crypto, discipline and adaptability aren’t just virtues; they are the foundation of survival and success.
In Other News
Harvard endowment invests $116M into bitcoin ETF.
SEC Chair Paul Atkins says agency is mobilizing to update custody and other guidance for crypto.
Bitcoin and Strategy lead risk-adjusted returns as volatility falls.
The Bitcoin boom hiding in Americans’ retirement savings.
Wyoming state debuts U.S. dollar stablecoin on seven blockchains.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
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