Has the four-year cycle of Bitcoin begun to repeat itself?

Nakamoto 2025-11-25 16:12 75584人围观 BTC

What defines us is not what we say but what we do. Article: William When we look back at the Bitcoin trend chart, the zigzag upward curve is telling a human story about greed and fear. The madness of $20,000 in 2017, the 84% plunge in 2018, the glory of $

It’s not what we say but what we do that defines us

Text: William

When we look back at the Bitcoin trend chart, the zigzag upward curve is telling a human story about greed and fear. The madness of $20,000 in 2017, the 84% plunge in 2018, the glory of $69,000 in 2021, the 77% collapse in 2022, and the new high of $120,000 in 2025 - Bitcoin has completed four thrilling cycles in eight years.

Behind this chart are the laughter and tears of countless investors, and it is a true portrayal of the global economic cycle and monetary policy.

Data doesn't lie

Bitcoin’s cyclical pattern

We can clearly see from the chart that Bitcoin does have cyclical fluctuations of about four years. This cycle is highly consistent with Bitcoin’s halving events: the first halving in November 2012, the second halving in July 2016, the third halving in May 2020, and the fourth halving in April 2024.

After every halving, Bitcoin will usher in a magnificent bull market. Data shows that Bitcoin rose 100 times after the halving in 2012, 30 times after the halving in 2016, and 7 times after the halving in 2020. The increase gradually narrowed, but the absolute price continued to hit new highs.

More importantly, the highs and lows of each cycle are gradually rising. The cycle high in 2013 was $1,163, the cycle high in 2017 was $19,891, the cycle high in 2021 was $69,000, and the cycle high in 2025 has exceeded $100,000. This long-term upward trend highlights the tenacious vitality of Bitcoin as an emerging asset class.

Bitcoin trends are highly consistent with the Nasdaq index, but more volatile

Four major driving forces behind the surge

The halving mechanism is the core engine of the Bitcoin cycle. When Satoshi Nakamoto designed Bitcoin, he wrote the halving mechanism into the genes: every 210,000 blocks generated, the mining reward is halved. This design ensures the scarcity of Bitcoin, making it the first truly absolute scarce asset in human history.

The massive entry of institutions starting in 2020 has completely changed the market structure of Bitcoin. MicroStrategy holds more than 200,000 Bitcoins, worth over 10 billion US dollars ； Tesla once held $4.3 billion in Bitcoin ； Traditional financial giants such as BlackRock and Fidelity have launched Bitcoin ETFs, providing compliant entry channels for ordinary investors.

The global central bank's currency release has provided sufficient fuel for Bitcoin's rise. In response to the impact of the epidemic, the Fed's balance sheet surged from US$4.2 trillion at the beginning of 2020 to US$9 trillion in 2022. The global zero interest rate or even negative interest rate environment makes Bitcoin, which does not generate income, become the first choice for anti-inflation.

The continued development of blockchain technology provides fundamental support for Bitcoin. The improvement of the Lightning Network has made Bitcoin micropayments possible, the Taproot upgrade has improved privacy and smart contract functions, and the development of side chain technology has expanded the application scenarios of Bitcoin. Bitcoin is no longer just digital gold, but is evolving into a decentralized financial infrastructure.

The culprit of the plunge

Who was the straw that broke the camel's back?

Changes in regulatory policies have always been the Sword of Damocles hanging over Bitcoin. In 2017, China banned ICO and cryptocurrency trading, and Bitcoin plummeted 30% in a single day. ； In 2021, China will completely withdraw from the mining industry, and Bitcoin will be cut in half again. The U.S. SEC’s repeated attitudes toward Bitcoin ETFs have repeatedly triggered violent market fluctuations.

Shifts in macroeconomic policies are often the trigger for bull-bear transitions. In 2022, the Federal Reserve started a radical interest rate hike cycle, rapidly raising interest rates from zero to 5.25%. The tightening of global liquidity directly punctured the Bitcoin bubble. Historical data shows that during interest rate hike cycles, Bitcoin drops by more than 70% on average, which is much higher than traditional risk assets.

The leverage bubble within the market is an intrinsic factor that amplifies the decline. At the peak of the bull market, the funding rate for Bitcoin perpetual contracts was often as high as over 0.1%, and the market leverage was at extreme levels. Once prices start to fall, a vicious cycle of serial liquidations will accelerate the decline of assets. The collapse of the LUNA/UST algorithm in 2022 has triggered a crisis of trust in the entire cryptocurrency market.

Technical security incidents also impact market confidence from time to time. 850,000 Bitcoins were stolen from the Mt.Gox exchange, and 120,000 Bitcoins were stolen from Bitfinex. These security incidents not only caused huge losses to investors, but also raised deep questions in the market about the security of cryptocurrency.

Cycle judgment

where are we

From the charts and data analysis, we are currently in the top area of the fourth cycle. After the halving in April 2024, Bitcoin reached a high of around $120,000 in June 2025 and then began to correct. According to historical rules, the peak will be 12-18 months after the halving, and the bottom will be 12-18 months after the top. Then the next important low may appear from the end of 2026 to the beginning of 2027.

It is worth noting that compared with the previous three cycles, there are new changes in this cycle. The approval of Bitcoin spot ETFs provides convenient allocation channels for traditional funds. The in-depth participation of institutional investors has changed the investor structure of the market. The continued global inflation environment has strengthened Bitcoin’s anti-inflation narrative. These factors may make this cycle's adjustment smaller than historical levels.

future outlook

Bitcoin’s Opportunities and Challenges

In the short term, Bitcoin may continue to correct, with strong support in the $40,000-$50,000 range. This range is the support level that is converted after breaking through the important resistance level in the early stage. It is also the location where many miners shut down their prices. The direction of the Federal Reserve's monetary policy, the flow of Bitcoin ETF funds, and macroeconomic data will be the key variables that affect the short-term trend.

In the medium term, 2026-2028 will be an important stage for Bitcoin to accumulate power. The next halving event is expected to occur in 2027-2028. According to historical rules, the end of 2026 to the beginning of 2027 may be an important layout window period. Clarification of regulatory policies, further maturity of technology, and expansion of application scenarios will lay a solid foundation for the next round of bull market.

In the long term, Bitcoin's underlying value support remains solid. The total limit of 21 million coins makes it a scarce asset in the digital era. Its decentralized characteristics make it an important supplement to sovereign credit currencies. Global liquidity makes it a safe haven option for emerging markets. As the younger generation becomes more accepting of digital currencies, Bitcoin’s user base and network effects are expected to continue to grow.

Investment inspiration

How to deal with highly volatile markets

For ordinary investors, it is crucial to understand the cyclical patterns of Bitcoin. Regular fixed-amount investment is an effective strategy to deal with high volatility and can smooth costs by diversifying investment timing. Position management is key to long-term survival, avoiding the use of leverage and lifeline funds to invest in high-risk assets.

The long-term perspective is the core magic weapon for navigating through fluctuations. Historical data shows that no matter whether you buy Bitcoin at any high point and hold it for more than four years, you will achieve positive returns. Diversification can reduce overall portfolio risk by using Bitcoin as part of your asset allocation rather than the entire portfolio.

Most importantly, a deep understanding of Bitcoin's underlying logic is a source of confidence for long-term holding. Only by truly understanding the unique value of Bitcoin as a non-sovereign value storage tool can we remain rational and patient amid violent market fluctuations.

Bitcoin’s next four-year cycle is unfolding, and historical experience tells us that every deep bear market is accumulating energy for the next bull market. In this highly volatile market, survival is more important than making quick money, and rationality is more precious than fanaticism. After all, in this investment product disguised as a digital world, the real test is still anti-human wisdom and restraint.

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——About the author of the public account——

Professional financial management consultant for overseas assets

RFP US Certified Financial Planner

Professional enterprise risk consultant

Zhejiang University Computer Science

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