Written by: Matt Hougan, Chief Investment Officer of Bitwise
Compiled by: Luffy, Foresight News
In the past few weeks, during meetings with institutional investors, the question I was asked the most was: Does the four-year cycle of Bitcoin still hold relevance?
The so-called four-year cycle refers to the historical trend of Bitcoin showing "three years of price increases followed by a year of sharp decline."
This question is crucial because, according to the logic of the four-year cycle, next year will be a challenging year for Bitcoin and the entire cryptocurrency market.
Although I cannot accurately predict the price trends of cryptocurrencies next year, I believe that blindly trusting the idea that the four-year cycle will mechanically repeat is unwise. After all, the four-year cycle is not a dogma carved in stone by the gods of cryptocurrency; its formation actually stems from three specific driving factors:
Bitcoin halving event: The mining rewards on the Bitcoin blockchain are halved every four years.
Interest rate fluctuations: The two spikes in interest rates in 2018 and 2022 both became catalysts for corrections in the cryptocurrency market.
Boom and bust market cycles: The years of cryptocurrency crashes (2014, 2018, 2022) invariably followed strong years of growth. For example, Bitcoin rose 5530% in 2013, 1349% in 2017, and 57% in 2021. During market frenzy periods, fraudulent activities and speculative bubbles continuously proliferate, and the bursting of bubbles, such as the regulatory crackdown on ICOs in 2018 and the collapse of the FTX exchange in 2022, directly triggered market crashes that year.
Today, these three major driving factors have either significantly weakened in influence or moved towards a completely opposite cycle compared to the past. The impact of Bitcoin halving is not as strong as it was four years ago; interest rates in 2026 are likely to trend downward rather than upward; and the cryptocurrency market in 2025 has not experienced the kind of frenzied surge seen in previous cycles.
At the same time, more decisive forces, especially the large-scale entry of institutional investors and the gradual improvement of regulatory policies, are gearing up for 2026. In our latest report (2026 Market Forecast), we predict that Bitcoin will hit an all-time high next year. Currently, I still believe this is the most likely outcome.
What will replace the four-year cycle?
If the four-year cycle has indeed come to an end, then a reasonable question arises: what new thinking framework should we establish for the cryptocurrency market in 2026 and beyond?
The four-year cycle once provided clear guidance for investors. Understanding whether we are currently in a market recovery phase, a bull market, or a cryptocurrency winter can help investors hold firm in a bear market and remain rational in a bull market.
So, what kind of thinking framework can replace it today?
The answer is: a decade-long protracted battle.
I know this statement sounds far less eye-catching than the four-year cycle. But please hear me out, as I firmly believe this is the essence of the current market.
The so-called protracted battle refers to the long-term tug-of-war between two forces: one is a strong, persistent, and gradual positive driving force; the other is an intermittently exploding, aggressive but insufficient negative shock.
The positive driving forces currently gaining momentum include: accelerated positioning by institutional investors, the continuous improvement of regulatory frameworks, concerns about the devaluation of fiat currencies, and the realization of practical application scenarios such as stablecoins and asset tokenization.
The goal of these trends is to disrupt entrenched traditional systems such as capital markets, global payment systems, and international monetary systems, which will inevitably take over a decade to fully form. Early signs of this process are already visible: billions of dollars flowing into cryptocurrency ETFs, cryptocurrency-related bills steadily advancing in Congress, and the rapid expansion of stablecoin and tokenization market sizes, among others.
But progress will inevitably encounter resistance. Possible negative shocks include: macroeconomic shocks, a wave of leveraged fund liquidations, as well as malicious events like hacking, fraud, and capital flight. The impact cycle of such negative shocks usually spans several weeks, months, or quarters.
Overall, the long-term impact of positive driving forces far exceeds that of negative shocks, but the speed of negative shocks can be very rapid, potentially suppressing positive forces in the short term. The market crash on October 10, 2025, is a typical case: a macro shock triggered massive liquidations of cryptocurrency leverage positions, directly leading to a cliff-like market decline.
It is precisely this pattern of a protracted battle that has caused the severe divergence in the current cryptocurrency market: retail investors are in deep despair, while many institutional investors are filled with bullish confidence. The root cause lies in the starkly different time dimensions that each is focusing on. Retail investors are concerned with the aftermath of the October liquidation event; while institutions are looking towards the scenario where stablecoin assets exceed $3 trillion by 2030.
Both viewpoints have their rationality, but they are based on different time scales.
The significance of a protracted battle for investors.
In recent months, I have been using the framework of a 'protracted battle' to analyze the market, and it has proven to be extremely valuable. The pattern of a protracted battle indicates that the market will exhibit the following characteristics:
In the long run, returns are substantial but not exaggeratedly so.
Overall volatility has decreased.
Periodic corrections of 20%-40%.
This means that investors must take every market correction seriously, as they can last quite a long time. However, as long as the fundamentals remain strong, one can firmly believe that prices will eventually rebound.
Looking back, I believe the cryptocurrency market officially entered the protracted battle phase when the Bitcoin spot ETF was approved in January 2024. This milestone event opened the floodgates for institutional investment, and I believe this trend will last a full decade. And indeed it has: since the ETF launched, the price of Bitcoin has risen a cumulative 93%, experiencing three corrections of over 20% during that time.
I believe that for a long time to come, the market will maintain such return characteristics. A protracted battle may not be as thrilling as the previous boom and bust cycles, but it marks a deeper transformation in the cryptocurrency industry. When an asset class matures, the era of protracted battles has arrived.
