The widely recognized “four-year cycle” theory in Bitcoin investing, a cornerstone strategy within the crypto market, is currently undergoing significant scrutiny as institutional investors increasingly enter the space.
During an appearance on CNBC’s Crypto World show, Matt Hougan, Chief Investment Officer of Bitwise Asset Management, alongside Sebastian Bea, CIO of ReserveOne, shared compelling perspectives on Bitcoin’s future and evolving market trends.
Matt Hougan challenged the traditional notion that Bitcoin’s price movements follow a four-year pattern tied to halving events. He proposed that this cycle is giving way to what he describes as a “decade-long bull market.”
Hougan highlighted several factors driving this shift: the approval of ETFs in early 2024, advancements in regulatory frameworks, and the growing prominence of stablecoins. He pointed out that over the past year Bitcoin has demonstrated even less volatility than tech giant Nvidia. Despite this progress, Hougan emphasized that institutional adoption remains at an early stage. Typically, institutional investors undergo about eight meetings—or roughly two years—of evaluation before committing capital to Bitcoin.
Sebastian Bea offered a nuanced view by suggesting it might be premature to declare the end of cyclical patterns entirely but acknowledged fundamental changes in market structure. He explained how retail investors tend to react based on price momentum while institutions focus on strategic asset allocation principles.
This approach by institutions acts as a stabilizing mechanism; they purchase Bitcoin during price dips to maintain portfolio balance which results in smoother corrections instead of steep declines ranging from 60% to 80%, commonly seen previously.
Both experts agreed there has been a profound transformation over five years regarding how institutional investors engage with Bitcoin. Matt Hougan recalled earlier days when questions centered around basic concepts like “What is BTC?” or “How does mining work?” Today’s conversations are far more sophisticated — addressing topics such as portfolio correlation impacts and inflation hedging roles for digital assets.
The dialogue also touched upon influences from recent U.S. government policies and Federal Reserve interest rate decisions. Sebastian Bea remarked that Bitcoin is now firmly classified as a commodity with reduced regulatory ambiguity; however,the focus has shifted towards liquidity conditions and Fed interventions rather than solely political rhetoric.
*This content does not constitute investment advice.*