Author: Mark Mason, Bitcoin Magazine; Translator: Deng Tong, Jinse Finance
For a long time, the Bitcoin market has been characterized by its seemingly immutable four-year cycle: three years of price surges followed by significant corrections. However, a major shift in Washington's policies under President Donald Trump could disrupt this cycle and usher in a new era of long-term growth for the cryptocurrency industry.
Matt Hougan, CIO of Bitwise Asset Management, recently posed an interesting question: Can Trump's executive order break the four-year cycle of cryptocurrencies? His answer, though nuanced, leans towards a yes.
Four-year cycle
Hougan clarified his personal view that the four-year Bitcoin market cycle is not driven by Bitcoin's halving events. He stated, 'People try to link it to Bitcoin's quadrennial 'halving,' but these halvings are inconsistent with the cycle, occurring in 2016, 2020, and 2024.'
Source: Bitwise Asset Management. Data range from December 31, 2010, to December 31, 2024.
Bitcoin's four-year cycle has historically been driven by a combination of factors such as investor sentiment, technological breakthroughs, and market dynamics. Typically, bull markets emerge after significant catalysts (whether infrastructure improvements or institutional adoption), attracting new capital and fueling speculation. Over time, leverage accumulates, excesses occur, and major events (such as regulatory crackdowns or financial fraud) trigger sharp corrections.
This pattern has played out repeatedly: from the early days of the 2014 Mt. Gox crash to the rise and fall of ICOs in 2017-2018, and the recent deleveraging crisis caused by the collapse of FTX and Three Arrows Capital in 2022. However, each winter has been followed by a stronger recovery, culminating in the latest Bitcoin bull market stimulated by the mainstream adoption of Bitcoin ETFs in 2024.
Executive order: A game-changing factor
The fundamental question Hougan explores is whether Trump's recently issued executive order will disrupt the established cycle, prioritizing the development of America's digital asset ecosystem. The order outlines a clear regulatory framework and even envisions the establishment of a national digital asset reserve, representing the most optimistic stance on Bitcoin from a sitting or former U.S. president.
Its impact is profound:
Regulatory clarity: By eliminating legal uncertainties, the executive order paves the way for institutional capital to flow into Bitcoin at an unprecedented scale.
Wall Street integration: With the SEC and financial regulators now supporting cryptocurrencies, major banks can enter the field, offering clients Bitcoin custody, loans, and structured products.
Government adoption: The concept of a national digital asset reserve suggests that in the future, the U.S. Treasury could hold Bitcoin as a reserve asset, solidifying its status as digital gold.
These developments won't happen overnight, but their cumulative effect could fundamentally change Bitcoin's market dynamics. Unlike previous cycles driven by speculative retail frenzy, this shift is supported by institutional adoption and regulatory endorsement—creating a more stable foundation.
The end of the cryptocurrency winter?
If history repeats itself, Bitcoin will continue to rise until 2025, then face a significant correction in 2026. However, Hougan notes that this time might be different. While he acknowledges the risks of speculative excess and leverage-driven bubbles, he believes the sheer scale of institutional adoption will prevent the kind of prolonged bear markets seen in the past.
This is a crucial distinction. In previous cycles, Bitcoin lacked a strong value-oriented investor base. Now, with ETFs making it easier for pensions, hedge funds, and sovereign wealth funds to allocate to Bitcoin, the asset no longer relies solely on retail enthusiasm. What will the outcome be? Corrections may still occur, but they could be smaller in magnitude and shorter in duration.
What happens next?
The price of Bitcoin has surpassed the $100,000 mark, with industry leaders like BlackRock CEO Larry Fink predicting that the price could reach $700,000 in the coming years. If Trump's policies accelerate institutional adoption, the typical four-year cycle may be replaced by growth trajectories more akin to traditional asset classes—similar to gold's response after the end of the gold standard in the 1970s.
While risks still exist—including unforeseen regulatory reversals and excessive leverage—the direction of development is clear: Bitcoin is becoming a mainstream financial asset. If the four-year cycle was driven by Bitcoin's early and speculative nature, its maturation could render this cycle obsolete.
Conclusion
For over a decade, investors have viewed the four-year cycle as a roadmap for Bitcoin's market movements. But Trump's executive order could be a decisive moment in breaking this pattern, replacing it with a more durable and institutionally-driven growth phase. As Wall Street, corporations, and even governments increasingly embrace Bitcoin, the question is no longer whether a cryptocurrency winter will arrive in 2026, but whether it will come at all.
