Compilation: Vernacular Blockchain

Bitcoin (BTC) is soaring.

An all-time high of $122,000 was set in the previous two days:

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Image: Bitcoin price, source: TradingView

If you are still asking yourself "What stage are we in the Bitcoin cycle", I have news to tell you:

The four-year cycle of Bitcoin has been broken

Since Bitcoin's inception, it has followed a solid four-year cadence.

This pre-programmed event—automatically halving the new supply of Bitcoin (—is therefore referred to as "halving" ). Each time it occurs, it triggers a predictable bullish cycle.

Cryptocurrency prices typically bottom out 12-18 months before a Bitcoin halving. They then start to rise before the halving... and surge even more in the 12 months following the halving.

Source: RiskHedge, Yahoo Finance

After the first halving, Bitcoin soared by 8000%... Within a year after the second halving, it increased nearly 30 times... The third halving brought a return of 6 times.

But this time, the situation has changed.

The fourth Bitcoin halving will occur on April 20, 2024. However, the price of Bitcoin has only increased by 90% since then.

According to past patterns, we should currently be in a full-blown cryptocurrency frenzy. But that is not the case.

Following the playbook of the four-year cycle, money flows should also start flowing into smaller tokens. I'm referring to the so-called "altcoin season". However, Bitcoin remains firmly in the driver's seat.

Clearly, the Bitcoin cycle has been broken.

ETFs Break the Four-Year Cycle

BlackRock's Bitcoin ETF - iShares Bitcoin Trust ETF(IBIT) - has rewritten history.

In just 11 months, it has accumulated over $50 billion in assets, surpassing the issuance speed of any ETF in history. The assets currently held by IBIT exceed those of BlackRock's gold ETF, which is the second largest gold fund in the world.

Why is this important?

This means that large institutions have entered the cryptocurrency market.

Wall Street, pension funds, banks, and even 401(k) accounts can now gain exposure to Bitcoin with just a click.

This will transform Bitcoin from a niche asset into a global macro asset. Whether you like it or not, cryptocurrency has become a part of the traditional financial system.

In the past, Bitcoin operated at its own pace, adhering to the four-year halving cycle.

Now, it fluctuates in sync with the larger market... reacting to inflation data, interest rates, tariffs, and central bank decisions.

Let's take a look at how closely the price of Bitcoin has tracked the S&P 500 index this year:

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Image: BTC vs S&P 500, Source: Koyfin

ETFs have brought hundreds of billions of dollars in new investor capital to the cryptocurrency market.

Washington's 180-degree turn on cryptocurrency will bring in trillions of dollars in funding

Please remember that just nine months ago, the U.S. government publicly opposed cryptocurrency.

Senators have formed an anti-cryptocurrency "army." The U.S. Securities and Exchange Commission (SEC) has filed lawsuits against every moving crypto project.

Members who have been following Venture for a long time know that regulatory uncertainty is the number one factor hindering the development of cryptocurrency. Bitwise's survey of professional investors for three consecutive years shows that regulatory issues remain the primary reason they avoid cryptocurrency.

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Source: Bitwise

In just a few months, the situation has changed dramatically.

Congress has declared this week "Crypto Week."

The U.S. House of Representatives hopes to advance three significant cryptocurrency bills that have been stalled for years.

This is the most serious and coordinated cryptocurrency policy push to date.

In short, these bills will give the big Wall Street institutions the green light to enter the cryptocurrency market. This means that more money will start flowing into the cryptocurrency.

How high can Bitcoin go?

In August 2023, when the price of Bitcoin was $27,000, I told members of RiskHedge Venture that Bitcoin would reach $150,000. Since then, the price of Bitcoin has more than quadrupled:

Source: Google Finance, RiskHedge Venture

Based on all positive regulatory developments, Bitcoin could reach $200,000 in the next 12 months. **

The breaking of the four-year cycle is a good thing.

This means that cryptocurrencies will no longer be tied to a fixed schedule.

In the future, the cryptocurrency bull market may last for several years, just like the stock market.

Those -80% plunges every four years may well be a thing of the past.

Bitcoin is just digital cash, owning some Bitcoin is wise. But if you are pursuing rapid growth, it is not the best cryptocurrency.

The real upside potential lies in smaller, lesser-known crypto projects.

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