Key conclusions

• Bitcoin’s halving price pattern that shaped Bitcoin’s early history is losing steam. As more BTC enters circulation, each halving has a smaller relative impact.

• According to Grayscale, today’s Bitcoin market is shaped more by institutional capital than the retail speculation that defined previous cycles.

• Unlike the explosive gains in 2013 and 2017, Bitcoin’s recent price rally has been more controlled. Grayscale notes that another 30% drop resembles a typical bull market correction.

• Interest rate expectations, bipartisan cryptocurrency regulatory dynamics in the U.S., and Bitcoin’s integration into institutional portfolios are increasingly shaping market behavior.

Since its inception, the price of Bitcoin (BTC) has followed a predictable pattern. A programmed event cuts the Bitcoin supply in half and causes a shortage. This is often followed by periods of acute price increases and subsequent corrections. The repeating sequence, commonly known as the four-year cycle, has strongly influenced investor expectations since Bitcoin’s inception.

Last analysis from Grayscale, backed by onchain data from Glassnode and market structure insights from Coinbase Institutional, has a different view on Bitcoin’s price path. This indicates that Bitcoin’s price action in the mid-2020s may move beyond the customary pattern. Bitcoin price movements appear to be increasingly influenced by factors such as institutional demand and broader economic conditions.

This article examines Grayscale’s view that the four-year cycle framework is losing its ability to fully explain price movements. Discusses Grayscale’s analysis of Bitcoin cycles, supporting evidence from Glassnode, and why some analysts believe Bitcoin will continue to follow a four-year cycle.

Established four-year cycle

Bitcoin halvings, which take place approximately every four years, reduce the issuance of up-to-date BTC by 50%. Historically, these supply reductions have consistently preceded major bull markets:

• Halving in 2012 – peak in 2013

• Halving in 2016 – peak in 2017

• Halving in 2020 – peak in 2021

This pattern results from both the built-in scarcity mechanism and investor psychology. Retail traders were the main demand drivers, with reduced supply leading to robust buying.

However, with most of Bitcoin’s fixed supply of 21 million already in circulation, each halving has less and less relative impact. This raises questions about whether supply shocks alone can continue to dominate the cycle.

Did you know? Since 2009, halvings have occurred in 2012, 2016, 2020, and 2024. Each of them permanently lowered Bitcoin’s inflation rate and brought annual issuance closer to zero, while reinforcing the BTC digital scarcity narrative among long-term holders and analysts.

Grayscale Bitcoin Cycle Assessment

Grayscale stated that the current market is significantly different from previous cycles in three respects:

Demand dominated by institutions, not retail geeks

Previous cycles depended on robust buying by individual investors on retail platforms. Today, capital flows are increasingly driven by exchange traded funds (ETFs), corporate balance sheets and professional investment funds.

Grayscale notes that institutional vehicles attract patient, long-term capital. This is contrary to the fast-paced, emotion-driven retailing seen in 2013 and 2017.

No pre-cash growth

Bitcoin’s peaks in 2013 and 2017 were characterized by extreme, unsustainable price increases followed by crashes. In 2025, Grayscale has he noticedprice increases were much better controlled, and the subsequent 30% decline looks more like a typical bull market correction than the beginning of a multi-year bear market.

A macro environment that matters more than halvings

In Bitcoin’s earlier years, price movements were largely independent of global economic trends. In 2025, Bitcoin has become sensitive to liquidity conditions, fiscal policy, and institutional risk sentiment.

Key influences cited by Grayscale include:

• Expected changes in interest rates

• Growing bipartisan support for US cryptocurrency legislation

• Bitcoin’s inclusion in diversified institutional portfolios.

These macro factors have an impact regardless of the halving schedule.

Did you know? When block rewards are halved, miners will receive less BTC for the same work. This can prompt higher cost miners to temporarily halt operations, often leading to short-term hashrate drops before the network is brought back into balance.

Glassnode data showing a departure from classic cycle patterns

Onchain research conducted by Glassnode shows that the price of Bitcoin has deviated from historical norms several times:

• The supply of long-term holders is at historically high levels: Long-term holders control a larger share of circulating supply than ever before. Continued accumulation limits the amount of Bitcoin available for trade and reduces the supply shock effect typically associated with halvings.

• Reduced volatility despite withdrawals: While significant price corrections occurred in tardy 2025, realized volatility remained well below levels seen at the turning points of previous cycles. This is a sign that the market can cope with huge movements more efficiently, often thanks to the greater participation of institutions.

• ETFs and custody demand are changing the supply distribution: Onchain data shows rising transfers to custodial wallets linked to ETFs and institutional products. Coins stored in these wallets tend to remain dormant, reducing the amount of Bitcoin actively circulating in the market.

A more elastic, macro-linked Bitcoin cycle

According to Grayscale, Bitcoin price behavior is gradually moving away from the four-year model and becoming more sensitive to:

• Steady long-term institutional capital

• Improving the regulatory environment

• Global macroeconomic liquidity

• Continued demand for ETFs

• A growing group of committed long-term holders.

Grayscale highlights that adjustments are inevitable and can still be grave. However, they do not automatically signal the beginning of a prolonged bear market.

Did you know? After each halving, Bitcoin’s inflation rate drops dramatically. Following the 2024 halving, annual supply inflation has fallen below the level of many major fiat currencies and strengthened compared to rare commodities such as gold.

Why some analysts still believe in halving patterns

Some analysts, often citing historical overlaps with Glassnode cycles, still believe that halvings remain the main driving factor. They claim that:

• The halving continues to represent a fundamental and irreversible supply constraint.

• The activity of long-term bondholders continues to focus around halving periods.

• Retail-based businesses may continue to re-emerge even as institutional participation increases.

These different views show that the debate is far from resolved. The arguments and counter-arguments regarding Bitcoin ignoring the four-year cycle reflect an evolving market.

An evolving framework for understanding Bitcoin

Grayscale’s argument against the dominance of the customary four-year cycle is based on clear structural changes. These include growing institutional commitment, deeper integration with global macro conditions, and lasting changes in supply dynamics. Supporting data from Glassnode and Coinbase Institutional confirms that today’s Bitcoin market operates under more sophisticated forces than the retail-dominated cycles of the past.

As a result, analysts place less emphasis on time models based on a fixed halving. Instead, they focus on chain metrics, liquidity trends, and institutional flow metrics. This more sophisticated approach better captures Bitcoin’s ongoing transformation from a marginal digital asset to a recognized part of the global financial landscape.