What Is Bitcoin's 4-Year Cycle?
The cryptocurrency market is known for its volatility, but long-term patterns are beginning to emerge. One of the most studied is the so-called"Bitcoin 4 year cycle", also closely linked to the event ofhalving. This cycle describes a recurring pattern where the price of BTC tends to present phases of cumulative growth for approximately three years, followed by a year of correction or consolidation, before restarting the process.
Recently, Anthony Scaramucci of SkyBridge Capital reignited the debate by stating that this cycle is still in effect and predicted a significant rally for the fourth quarter of 2024. This perspective is based on the historical observation that, after a halving, the market enters a period of accumulation that often precedes a strong appreciation.
The Intrinsic Relationship with Halving
O halvingis an event programmed into Bitcoin's code that halves the reward miners receive for validating blocks. This happens every 210,000 blocks mined, approximately every four years. The last one occurred in April 2024. The economic theory behind the cycle suggests that the reduction in new BTC supply, combined with constant or increasing demand, creates upward pressure on prices with atime lagfrom a few months to a year.
Recent Volatility and the Current Market Context
To understand where we are in the cycle, it is crucial to analyze the present moment. The market went through a phase ofsharp volatility. Over the recent weekend, a sharp drop in the price of Bitcoin to the US$68,000 region triggeredwaterfall settlementswhich approached US$400 million across the entire cryptocurrency market, according to derivatives data.
These corrections, although abrupt, are considered by many analysts to behealthy and typicalof a market in an upward trend. They serve to remove excess leverage and reset support levels. Interestingly, despite this short-term turmoil, long-term technical indicators such as the formation of a new"golden cross"(golden crossover) on the moving averages, continue to point to an underlying bullish trend.
The Paradoxical Case of XRP and Regulation
The Bitcoin cycle does not operate in a vacuum. Regulatory and market dynamics specific to other assets also influence overall sentiment. A recent example is theXRP. Ripple's digital currency scored a historic victory before the SEC, with a court essentially classifying it as acommodity(commodity) and not as a security. Despite this crucial legal advance, which could attract new institutional investments, the price of XRPretreatedin the short term.
This paradoxical movement illustrates how, in times of general market pressure, even positive news can be overshadowed. It also highlights that theclear regulation, although fundamental for mass adoption, does not always translate into immediate price gains, operating over longer time frames.
Technological Innovation and the Future of Cycles
While Bitcoin establishes macro cycles, innovation at the application layer (Layer 1 and Layer 2) continues at full steam. Projects like theQubic, which is preparing for Paris Blockchain Week 2026, promise to revolutionize areas such asDecentralized Artificial Intelligenceand reach absurd transaction capacities, such as 15.5 million TPS (transactions per second).
Your model"Useful Proof of Work"(Useful Proof of Work) proposes directing computational energy from mining toward useful tasks beyond network security, such as training AI models. This evolution of blockchain technology could, in the long term, change the value and utility dynamics that underpin price cycles, integrating real utility with security.
The Rise of Tokenized Assets and Implications
Another trend that is gaining strength and could influence future cycles is thetokenization of real-world assets, such as stocks, bonds and real estate. This movement, which already raises practical questions about thetaxation of these gainsin jurisdictions like Germany, it represents a monumental channel of traditional capital inflow into the crypto ecosystem.
Integrating these assets into blockchains could create new correlations and liquidity transfers between markets, potentially smoothing or amplifying Bitcoin cycles in the future as the sector matures.
Perspectives for Brazil and Conclusion
For the Brazilian investor, understanding the 4-year cycle is a valuable tool forexpectations and risk management. History suggests that periods of patience and strategic accumulation, especially after halvings, can be rewarded. However, it is vital not to treat the cycle as absolute determinism.
External factors such asglobal monetary policy, institutional adoption via ETFs, regulatory advances in Brazil and around the world, and technological evolution itself, will play crucial roles. Volatility, such as seen recently with sell-offs, should be expected and planned for.
The current scenario, with the 2024 halving recently concluded and analysts projecting a strong fourth quarter, places the market in a potentially promising phase of the cycle. However, the journey is rarely linear. The combination ofmacro analysis, attention to innovation and a disciplined investment strategyremains the most sensible approach to navigating the cryptocurrency market's next chapters.