A New Institutional Era for Bitcoin, According to Cathie Wood

Cathie Wood, CEO of Ark Invest, believes that Bitcoin's traditional four-year cycle may be losing its influence as major financial players begin to acquire and hold a greater share of the supply. This shift, according to Wood, could reduce volatility and change the way investors strategize.

Key Takeaways

Cathie Wood suggests that Bitcoin's classic four-year cycle may be losing its influence due to increased institutional involvement.
Large institutions and ETFs are locking in a greater share of Bitcoin, potentially stabilizing prices.
Recent halving reduced daily Bitcoin supply, raising questions about market sensitivity.
Some analysts predict less severe price drops moving forward, while others see traditional patterns continuing.
Economic factors like interest rates and institutional demand are increasingly impacting Bitcoin's price dynamics.

Cathie Wood, CEO of Ark Invest

The Impact of Institutional Purchases on the Market

Cathie Wood asserts that large institutions and spot ETFs are increasingly locking in a larger proportion of the circulating Bitcoin, coins that once quickly exchanged hands among retail investors. The last halving on April 20, 2024, has decreased the block reward to 3.125 BTC, which translates to nearly 450 fewer Bitcoin being added to the supply daily. Some analysts view this reduction as modest in comparison to the trillions attributed to market value and the billions flowing into ETFs.

Ark Invest has also been proactive by purchasing shares of Coinbase, Circle, and its own Ark 21Shares Bitcoin ETF (ARKB), indicating that institutional demand is no longer merely speculation. Reports from banks and crypto firms suggest that Bitcoin’s traditional cycle—characterized by significant price increases following halvings followed by drops of 75–90%—is now up for debate. For example, Standard Chartered has revised its 2025 price prediction from $200,000 to $100,000, arguing that the influx of ETF investments minimizes the halving's impact on prices.

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Analysts like Matt Hougan of Bitwise and Ki Young Ju, founder of CryptoQuant, concur that institutional flows have modified—or possibly even erased—the classic rhythm of the Bitcoin market. The market hit a peak near $122,000 in July, and some analysts believe that future drawdowns might be more contained, ranging from 25% to 40%, instead of the dramatic falls seen in previous years.

However, not all indicators imply the end of the traditional cycle. Reports from on-chain analysis firms like Glassnode indicate that the behavior of long-term holders resembles patterns from past cycles, displaying accumulation and distribution dynamics typical of historical bull and bear markets.

BTC Price Chart
Source: BTC-USD on TradingView

According to these analyses, the demand from typical buyers in the final phases of a cycle has weakened similarly to past occurrences. The argument remains that halvings continue to represent significant turning points within a broader trend, rather than inconsequential events. Macroeconomic observers highlight that larger economic forces—including interest rates, liquidity in fiat systems, and institutional appetite—are becoming increasingly significant in shaping price movements.