The long-standing narrative of Bitcoin’s four-year cycle is now obsolete, according to Matt Hougan, CIO at Bitwise. Hougan argues that the driving forces behind the historic cycle—such as the supply “shock” after each halving—have been eclipsed by new market realities. Chief among them is the steady influx of capital from institutions and corporations, which now dominate demand.
Why is the four-year cycle dead?
— Matt Hougan (@Matt_Hougan) July 25, 2025
1) The forces that have created prior four-year cycles are weaker:
i) The halving is half as important every four years;
ii) The interest rate cycle is positive for crypto, not negative (as it was in 2018 and 2022);
iii) Blow-up risk is… https://t.co/F9ybjHEeB5
Hougan highlights that risk factors for catastrophic crashes have faded, thanks to improved regulation and a maturing, institutionalized crypto industry. The multi-year trend of growing allocations to BTC ETFs by traditional Wall Street players marks a foundational shift. Recent legislative support, like the GENIUS Act, has paved the way for financial giants to pour “billions” into Bitcoin in the years ahead.
Macro Forces: Rate Correlation Flips and ETF Inflows Dominate
A critical macroeconomic shift has emerged: Bitcoin now shows a positive correlation to changes in the Federal Reserve’s interest rates, reversing the negative relationship observed in 2018 and 2022. This new environment, fueled by legislative clarity and institutional entry, is poised to crush the classic drivers of the four-year cycle—if they even still exist.
“2026 will be a favorable year. I could be wrong, but what lies ahead is significant volatility—yet I believe we’ll see a ‘sustained, stable boom’ rather than a supercycle,” Hougan stated. He emphasizes that the steady march of institutional capital is fundamentally altering Bitcoin’s growth curve.
The Key Risk: Corporate Bitcoin Treasuries
Hougan does caution that the next “significant risk” to monitor is the rapid formation of corporate Bitcoin treasuries. Such concentrated holdings could introduce new forms of volatility, especially if treasury management practices evolve or unwind at scale.
His perspective aligns with recent admissions from CryptoQuant founder and CEO Ki Young Ju, who publicly acknowledged that traditional cycle theory is no longer reliable. Ju apologized for earlier forecasts that relied on now-obsolete cyclical models.
Bitcoin’s Target Market: Gold and Treasuries
Bitwise CEO Hunter Horsley places Bitcoin’s long-term target addressable market at the combined value of the global gold and U.S. Treasury bond markets—estimated at $16 trillion and $30 trillion, respectively. The implication: institutional flows are just beginning.