Matt Hougan, Bitwise’s chief investment officer, has noticed a significant change in Bitcoin’s previously consistent four-year pattern. The old drivers such as supply cuts, rate fluctuations, and crash threats are no longer the dominant factors. The dynamics are now being shaped by new elements.

Halving’s Diminishing Importance Over Time

Hougan explains that while Bitcoin halving continues to slash new coin production by 50%, its relevance is waning. In the past, this event led to exponential price surges. However, as Bitcoin’s market cap grows into the hundreds of billions, the same supply cut grows less impactful every four years. For instance, halving events in 2016 and 2020 saw price increases of over 150%. In recent times, such events have led to less than 50% price jumps.

Hougan’s analysis from Bitwise shows a friendlier interest rate environment this time. In 2018 and 2022, the US Federal Reserve’s tightening led to severe crypto drops, with Bitcoin plunging 72% and 69% from its peak. Now, as rates are easing or on hold, cryptocurrencies are more likely to trade upwards.

Emergence of Institutional Trends Outpacing Old Cycles

Hougan identifies ETFs as the new crypto growth driver with a 5-10 year timeline. Spot Bitcoin ETFs launched in 2024 have attracted over $10 billion in net inflows. This consistent inflow can’t be attributed to a single four-year cycle.

Big investors such as pensions and endowments are also preparing to enter the fray. Many of them only started considering crypto last year, and the process to overcome internal barriers can take months or even years. However, their entry could significantly reshape markets.

Regulatory Clarity On the Rise

Hougan notes that regulatory clarity has improved since January 2025 with new custody rules, tax guidelines, and licensing regimes. This progress reduces systemic risk and allows banks and asset managers to offer crypto services.

Moreover, the recent Genius Act has unlocked opportunities for prime-broker platforms, allowing trading desks, clearing houses, and research teams to invest billions in a short time. This expansion might take time, but it’s here to stay.

The Unpredictable Role of Treasury Firms

However, Hougan points out a new cyclical risk: the rise of Treasury firms providing short-term lending and yield products. If these firms grow too rapidly without adequate controls, they could still trigger a market crash, introducing a new potential hazard that didn’t exist in previous cycles.

Featured image from Unsplash, chart from TradingViewCryptoNewsBTC

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