Grayscale Insights: Is Bitcoin Breaking Free from the Four-Year Cycle?

Grayscale's recent analysis suggests that Bitcoin's traditional four-year pricing cycle, influenced heavily by supply halving events, is becoming less relevant. As institutional investment grows and the economic landscape evolves, Bitcoin appears to be moving beyond its established patterns. This article delves into Grayscale's viewpoint, highlighting the changing dynamics of Bitcoin's market influence and the factors shaping this new environment.

Key Takeaways

The historical halving-driven pricing pattern of Bitcoin is weakening as more BTC enters circulation, resulting in smaller price impacts from each halving.
Today, institutional capital plays a more significant role in the Bitcoin market compared to the retail speculation that previously dominated.
Unlike the volatile price spikes seen in 2013 and 2017, Bitcoin’s recent price increases are more stable, with corrections resembling typical market adjustments.
Market behavior is increasingly shaped by interest rates, US regulatory developments, and Bitcoin’s role in institutional investment portfolios.

Bitcoin’s price journey has typically followed a clear pattern: halving events cut the supply of Bitcoin in half, creating scarcity and often leading to a surge in prices followed by corrections. This cycle, known as the four-year cycle, has significantly influenced market expectations since Bitcoin's inception.

However, Grayscale’s recent analysis, supported by data from Glassnode and Coinbase Institutional, proposes that Bitcoin’s price behavior in the mid-2020s may deviate from this established model. They suggest that Bitcoin is increasingly influenced by institutional demand and wider economic factors. This article examines Grayscale's view on the fading relevance of the four-year cycle, alongside complementary data from Glassnode and insights into why some analysts still support the traditional cycle.

Grayscale Insights: Is Bitcoin Breaking Free from the Four-Year Cycle?

Understanding the Four-Year Cycle

Bitcoin halvings—events occurring roughly every four years—reduce the generation of new BTC by 50%. Historically, these supply reductions have foreshadowed significant bull markets:

2012 halving led to the peak in 2013
2016 halving saw the peak in 2017
2020 halving resulted in the peak in 2021

These patterns emerged from a combination of Bitcoin’s scarcity mechanism and investor psychology; retail traders heavily drove demand, with reduced supply leading to pronounced buying activity. However, with a larger portion of the capped 21 million Bitcoin already mined, subsequent halvings have less influence, raising doubts about the ongoing dominance of supply shocks in price movements.

Understanding the Four-Year Cycle Did you know? Since its inception in 2009, Bitcoin has experienced halvings in 2012, 2016, 2020, and the next expected in 2024. Each event has reduced Bitcoin’s inflation rate, reinforcing its narrative of digital scarcity.

Grayscale’s Evaluation of Bitcoin Cycles

Grayscale identifies currently significant differences in the Bitcoin market compared to past cycles:

Previous cycles were fueled by retail investor activity; today, capital flows are predominantly from exchange-traded funds (ETFs), corporations, and institutional investment funds.
Institutional investments favor long-term stability over the rapid, emotion-driven trading characterized in earlier cycles.
Unlike the drastic price spikes seen in past years, the price increase in 2025 appears much more measured, with any declines being viewed as typical market corrections rather than the onset of an extended bear market.

Moreover, Bitcoin's price movements in earlier years were often independent of broader economic conditions, whereas in 2025, it is increasingly sensitive to elements like liquidity, fiscal policies, and institutional sentiment.

Key influences mentioned by Grayscale include:

Anticipated shifts in interest rates
Growing bipartisan efforts toward US crypto regulation
Bitcoin being included in diverse institutional portfolios

These macroeconomic factors shape Bitcoin's market behavior beyond the halving schedule.

Did you know? When Bitcoin block rewards are halved, the rewards for miners diminish, which may lead some miners with elevated operational costs to temporarily halt activity, resulting in brief declines in network hashrate before it stabilizes.

Glassnode Evidence of Changing Cycle Trends

Data from Glassnode supports the notion that Bitcoin's price is deviating from historical patterns:

Long-term holder supply has reached unprecedented levels: A larger share of the circulating Bitcoin is now held by long-term holders, limiting the supply available for trading and diminishing the typical supply-shock impact during halvings.
Lower volatility during drawdowns: Although significant price corrections emerged in late 2025, the market's volatility remains lower than during prior turning points, indicating improved market efficiency, likely due to increased institutional engagement.
ETFs and custodial demand influencing supply: Onchain data shows a growing influx of Bitcoin into custodial wallets associated with ETFs and institutional products, leading to dormant coins that reduce the active supply in the market.

A More Adaptive, Macro-Influenced Bitcoin Cycle

Grayscale suggests that Bitcoin's price behavior is gradually detachimg from the traditional four-year cycle, leaning more towards responsiveness to:

Persistent long-term institutional investment
Enhanced regulatory landscapes
Global economic liquidity shifts
Sustained demand from ETFs
A broader base of dedicated long-term holders

Grayscale acknowledges that price corrections will still occur and can be severe, but these do not necessarily indicate the beginning of a lasting bear market.

Did you know? Each halving drastically reduces Bitcoin's inflation rate. After the predicted 2024 halving, its annual inflation rate will drop below that of many major fiat currencies and strengthen its comparison to scarce commodities like gold.

Why Some Analysts Still Believe in Halving Trends

Some analysts, referencing Glassnode's cycle data, argue that halvings continue to be crucial:

The halving events still represent fundamental and irreversible supply reductions.
Activity among long-term holders tends to cluster around halving events.
Retail interest might resurge even amid growing institutional investment.

This ongoing debate reflects an evolving market where divergent views on Bitcoin's relationship with the four-year cycle persist.

A New Perspective on Bitcoin Understanding

Grayscale's argument against the traditional four-year cycle highlights major structural changes in the Bitcoin market, including increased institutional involvement, integration with global macroeconomic trends, and new supply dynamics. Supporting findings from Glassnode and Coinbase Institutional validate that today's Bitcoin market is influenced by more sophisticated factors than the retail-driven cycles of previous years.

Consequently, analysts are shifting away from strict halving-based timing models, placing greater emphasis on onchain metrics, liquidity trends, and institutional flow indicators. This refined approach captures Bitcoin's transformation from a niche digital asset to a recognized part of the global financial landscape.