Why the iconic Bitcoin cycle may be ending—and what savvy investors must do to thrive in a new era
The crypto world expected fireworks near the end of 2025. Bitcoin hitting $200,000, whales celebrating a “super cycle,” and the famous 4-year halving cycle delivering another epic bull run. Instead, we got a 30% crash and a surprisingly muted finish to the year. What broke down? Has the halving cycle lost its mojo? Or have institutional forces reshaped crypto’s rhythm altogether? In this article, you’ll learn why 2025’s cycle fizzled, why Wall Street’s growing influence is rewriting the playbook, and how liquidity—more than the calendar—will dictate opportunity by 2026. ---
The Broken Clockwork: Why the 4-Year Cycle Failed in 2025
Bitcoin’s halving cycle, where block rewards halve roughly every 4 years, has been crypto’s most reliable clock. Historically, bull run peaks landed in November or December of halving years: 2013, 2017, 2021. Investors on that pattern expected fireworks late in 2025. Instead, the price peaked early, in October 2025, at around $126,000 before falling 30%. Q4, the usually bullish quarter, logged nearly a 24% loss—the worst since the 2018 bear market. These events ask the hard question: is the halving cycle dead or merely off schedule?
Institutional Entry and the ETF Effect
The primary suspect: institutional investors and, specifically, Bitcoin spot ETFs launched in 2024. They quickly amassed over $100 billion in assets. This new supply of steady, large-scale capital smoothed Bitcoin’s wild price swings.
- Volatility Collapse: Bitcoin’s historical volatility dropped from over 200% in 2012 to around 50% today.
- Why This Matters: In earlier cycles, retail traders drove frenzied buying and selling: FOMO [fear of missing out] caused vertical price surges, followed by sharp crashes. Institutionals rebalance quarterly and trade less emotionally, acting as a price damper.
- This ETF bid wall limited both massive upside and deep downside, capping Bitcoin’s drop to around 30% instead of 70%.
Macro Factors: Liquidity and Federal Reserve Dynamics
Classical bull runs corresponded with easy monetary policies—money printing, low rates. But 2025 defied this script. The Federal Reserve aggressively tightened liquidity through Quantitative Tightening (QT) most of the year. Real yields were high. Even with the BTC rally to $126,000, this liquidity drought ultimately halted further gains and crushed bullish momentum heading into Q4. ---
The New Playbook: Liquidity Cycles Replace the Old Halving Timer
The cycle isn’t dead, but it has evolved. The new clock is driven by liquidity cycles—the flow and availability of global money supply (measured by M2 money supply).
- Overlay Bitcoin price charts with global M2 growth and you’ll see strong correlation.
- Based on these liquidity models, the true Bitcoin cycle peak is now expected in mid-2026—not late 2025. ### What Top Analysts Are Saying
- Tom Lee (Fundstrat) predicts a super cycle where Bitcoin grinds to $200,000 throughout 2026, describing it as a “left translated start, right translated finish.” The rally started early, paused in late 2025, then will resume.
- Major institutions like Citi Bank, Bernstein, and Standard Chartered agree, targeting $150k-200k peaks in 2026.
- Grayscale calls this the “dawn of the institutional era” — transforming crypto from volatile boom and bust into a mature, liquidity-driven market.
What This Means for Investors: Adjust Your Strategy Now
1. Forget the calendar
Stop guessing tops based on four-year halving cycles. Instead, watch liquidity indicators such as:
- The Federal Reserve’s balance sheet changes
- Global M2 money supply trends
As long as these expand in early 2026, the bullish trend is intact.
2. Use On-Chain Metrics Like MVRV-Z Score
- This metric measures market profit and loss relative to realized value.
- Cycle tops typically occur when MVRV-Z hits red zone levels above 5.
- Currently near 2, signals suggest a mid-cycle correction, not a final blowoff top.
3. Embrace Lower Volatility and Dollar-Cost Averaging (DCA)
Gone are the days of 20% one-day gains or 100x altcoins overnight. Volatility is muted. Instead of timing a single exit, scale out of positions gradually as the market grinds higher to safeguard gains without missing out if prices push to $200k.
Answer Box: What Happened to Bitcoin’s 4-Year Halving Cycle in 2025?
Bitcoin’s traditional 4-year halving cycle lost its sharp timing in 2025 due to large-scale institutional buying through ETFs which reduced volatility. Additionally, Federal Reserve tightening drained liquidity, delaying the cycle’s peak. Analysts now expect the real bull run peak in mid-2026 driven by liquidity expansion, not the calendar.
Data Callout: Volatility Is Down but Prices Are Smoother
Bitcoin’s volatility collapsed from over 200% in 2012 to about 50% today. This is largely thanks to institutional holders and spot Bitcoin ETFs controlling nearly 25% of supply. The result: smaller price swings, capped rallies, and cushioned crashes.
Risks / What Could Go Wrong?
- Federal Reserve policy shifts: If the Fed reverses and tightens again, liquidity could dry up, suppressing price gains.
- ETFs turn bearish: Institutions could rebalance more aggressively or exit, increasing volatility and downside risk.
- Macroeconomic shocks: Geopolitical events or global recessions could reduce risk appetite.
- On-chain metrics fail: Even with current metrics suggesting mid-cycle, markets are unpredictable and sentiment-driven.
Stay nimble and avoid overconfidence.
Actionable Summary: What to Do as We Enter 2026
- The 4-year halving cycle faded in 2025 due to institutional influence and macro tightening.
- Liquidity cycles driven by global money supply now dictate Bitcoin’s price rhythm.
- Expect the 2026 bull run peak between $150k-200k, but it will be a grind, not a parabolic spike.
- Focus on liquidity metrics and on-chain data (like MVRV-Z) over calendar dates.
- Embrace DCA and gradual profit-taking to navigate lower volatility conditions.
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FAQ
Q1: Is the Bitcoin 4-year halving cycle dead?
No, it’s not dead but no longer the sole driver of price action. Institutional buying and macro liquidity affect timing now.
Q2: Why did Bitcoin’s price peak early in 2025?
Large ETF inflows and Federal Reserve tightening created valuation and liquidity constraints, causing an earlier, lower peak.
Q3: What is the liquidity cycle and why does it matter?
Liquidity cycles track global money supply changes, influencing asset prices broadly. Bitcoin now follows these cycles more than fixed halving dates.
Q4: How can I tell when the next peak is coming?
Watch Fed policies, global M2 money supply, and on-chain metrics like the MVRV-Z score. Rising liquidity and a high MVRV-Z suggest peaks.
Q5: Should I wait for a blowoff top to sell Bitcoin?
Probably not. Volatility is muted; DCA and scaling out profits gradually is safer than chasing a single top.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Cryptocurrency investing carries risk and you should conduct your own research.
By Wolfy Wealth - Empowering crypto investors since 2016
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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
