Is Bitcoin’s 4-Year Halving Cycle Finally Breaking Down?

Ever since the days of the first Bitcoin (BTC -1.15%) exchanges like BitcoinMarket and Mt.Gox, traders have scoured every bit of data in hopes of finding patterns. While most of these efforts were in vain, the 4-Year Halving Cycle emerged as the gold standard for market timing.

However, the 2024-2025 cycle has behaved differently. With the October 2025 peak of ~$126,000 now behind us and prices correcting into the high $80,000s, many investors are asking if the cycle is broken. Is Bitcoin still a slave to the halving, or has it graduated to a new macro-economic reality?

Here is everything you need to know about the history, mechanics, and potential death of the 4-year cycle.

What is the 4-year Cycle?

The 4-year cycle is a term that refers to the market movements that occur leading up to and following a halving event. Halving events occur every 210,000 blocks on the Bitcoin mainnet, or roughly every 4 years. Historically, this created a predictable rhythm: a supply shock, followed by a bull run 12-18 months later, and finally a correction.

The Mechanics: Why the Cycle Existed

Halvings are hardcoded into Bitcoin’s main SHA-256 hash algorithm, providing a predictable emission schedule that cannot be altered. This created two primary drivers for price action:

1. Miner Economics (The Supply Shock)

Halvings get their name because they reduce the mining rewards by half. In the early days, this was a massive deal. When miners’ income was cut by 50%, the supply of new coins hitting the market dropped instantly. This “Supply Shock” forced prices up simply because there was less Bitcoin available to buy.

Source – Datacenter Knowledge

2. Scarcity & Inflation

This mechanism allowed Bitcoin to act as a hedge against inflation. Unlike fiat currencies where governments can print more money, Bitcoin’s inflation rate is programmed to decrease. Historically, this scarcity narrative drove immense “Fear Of Missing Out” (FOMO) immediately following a halving event.

The 4 Phases of the Bitcoin Cycle

Analysts have successfully broken the traditional cycle into 4 distinct phases. Understanding these helps explain why the current market feels so different.

1. Breakout Phase

This stage usually begins 2-4 months before the halving event. Traders strengthen their positions in anticipation of the supply cut. The narrative of “scarcity” begins to take hold in the media, driving early volume.

2. Hype Phase (Bull Run)

Usually taking 10-12 months to kick in post-halving, this is the trader’s favorite phase. Demand far outweighs supply, driving prices to new all-time highs. In this phase, retail investors typically enter the market, and major news networks cover Bitcoin daily.

3. Correction Phase (Crypto Winter)

Following the peak comes the crash. In the past, Bitcoin has lost up to 90% of its value during this stage as sellers rush to offload coins. This period tests the “diamond hands” of investors, as the asset can remain in a bear market for over a year.

4. Accumulation Phase

The final step is accumulation, where prices stabilize and “smart money” (institutions) begins buying quietly. The market goes from cold to lukewarm, signaling that another 4-year cycle is approaching.

Bitcoin Halving History and Market Impact

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To gain a deeper understanding, here is how the past cycles reshaped the Bitcoin economy:

• November 2012: The first halving dropped rewards to 25 BTC. Bitcoin climbed from $12 to a peak of $1,100, proving the “Supply Shock” thesis worked.
• July 2016: Rewards dropped to 12.5 BTC. After a long crypto winter, Bitcoin rallied from $650 to its famous $20,000 peak in 2017, driven largely by retail hype and ICOs.
• May 2020: Rewards dropped to 6.25 BTC. Coinciding with COVID stimulus checks, Bitcoin rallied from $8,800 to $69,000, as investors treated it as a hedge against money printing.
• April 2024: The latest cycle saw Bitcoin reach a pre-halving high before peaking at $126,000 in October 2025. However, this cycle introduced a new variable that changed the math forever: Spot ETFs.

Is the Bitcoin 4-Year Cycle Dead?

When you examine the 2024-2025 cycle, the pattern has shifted. The “Crypto Winter” has been milder, volatility has decreased, and the correlation to the halving seems weaker. This has led to two major new theories: The Liquidity Thesis and the Structural Thesis.

1. The Liquidity Thesis (Arthur Hayes)

BitMEX co-founder Arthur Hayes argues in his essay “Long Live the King” that Bitcoin has evolved into a proxy for global fiat liquidity. He notes that previous cycle peaks aligned perfectly with Central Bank tightening, while bottoms aligned with money printing.

Hayes points to late 2025 as proof: despite the post-October correction, the Federal Reserve’s 0.25% rate cut on December 10 and China’s continued deflationary stimulus are providing a floor for the asset. Under this view, Bitcoin moves with the M2 Money Supply, not the block height.

2. The Structural Thesis (Matt Hougan)

Just this week, Bitwise CIO Matt Hougan released a memo explicitly stating, “The four-year cycle is dead.” Hougan argues that the market has fundamentally changed structure due to the “Institutional Firewall” provided by ETFs.

Hougan cites three key factors that are breaking the cycle:

• Volatility Compression: In 2025, Bitcoin was notably less volatile than Nvidia stock.
• The ETF Dampener: Institutions rebalance portfolios and hold for the long term. Unlike retail traders who panic-sell 80% drops, these entities act as net buyers during dips, preventing the deep “Crypto Winters” of the past.
• 2026 Prediction: While the traditional cycle dictates that 2026 should be a bear market, Hougan predicts it will be an “up year,” driven by these structural shifts and a decoupling from equities.

3. The Math of Diminishing Returns

Finally, there is the simple math of the halving itself. In 2012, the reward dropped by 25 BTC every 10 minutes. In 2028, it will drop by only 1.5625 BTC.

With daily issuance now hovering around only 450 BTC, miner selling pressure has far less impact on global liquidity than it did in 2016. The “supply shock” is becoming a ripple, meaning external demand (Institutions/ETFs) matters far more than internal supply.

Conclusion: Navigating the New Cycle

In the past, the halving didn’t hold much significance to investors outside the crypto sphere. However, this time around is completely different, with new players and assets helping to push adoption further and stabilize the economy. For these reasons, all eyes are on the Bitcoin 4-year cycle.

What do you think? Is the Bitcoin 4-year cycle dead or simply postponed? Let us know in the comments, and be sure to like, share, and click here for more exciting digital asset insights.