Bitcoin Has Reached the End of the 4-Year Cycle: What’s Next?

Market Outlook - The traditional four-year Bitcoin cycle may be ending, potentially leading to a final blowoff top followed by a market crash, although this outlook is not universally agreed upon [1] - Bitcoin is at a pivotal point, with its structural bull market intact but at risk; a drop below $107,000 raises fears of falling below $100,000, while exceeding $118,000 suggests new all-time highs are possible [1][4] - Galaxy Digital initially predicted Bitcoin could reach $185,000 by the end of 2025, but now considers $130,000 to $150,000 a more likely range [3] - The four-year cycle may no longer be in place, as the price trend since November 2022 resembles a slow, steady climb rather than previous cycles with blowoff tops and troughs [18][19] - A potential bear market is expected to be less severe than previous ones, with a drop to $95,000 representing a 25% decline from all-time highs, which is mild compared to historical drawdowns of 70-90% [22][23] Market Factors - Bitcoin's recent drops are not due to fundamental issues but rather to macro factors and anxiety in equity markets, trading like a macro asset [9] - Concerns about AI capital expenditure (capex) and its potential impact on equity markets could negatively affect all markets, including Bitcoin [8] - Government investment in AI resembles a space race or Manhattan project, with significantly more funding than was allocated to the internet in the 1990s [8] - Negative tariff headlines or squishiness in equity markets could negatively impact Bitcoin [17] Institutionalization and Demand - Significant selling of older Bitcoin coins has been absorbed by buyers at higher prices, indicating strong demand and bullish sentiment [11][12] - The ability of the Bitcoin market to absorb a $10 billion sale (80,000 Bitcoin) from an OG is incredibly bullish, with ETFs, advisors, and institutions being the primary buyers [13] - Morgan Stanley is allowing its 10,000 registered investment advisors to recommend Bitcoin allocations up to 4% in client portfolios, signaling increased institutional adoption [15] - The fair price for Bitcoin is being agreed upon at or near $100,000, supported by a realized cap of over $1 trillion and substantial Bitcoin purchases above $100,000 [26]