Is Bitcoin’s four-year bull-bear cycle over?

The Bitcoin halving is just around the corner, and there’s no doubt that we seem to be on the brink of a major change. While everyone’s eyes are fixed on the Bitcoin (BTC) price surge and the possibility of new record highs, the ripple effects are far-reaching. They will touch every corner of the cryptocurrency market and may even mark the end of the four-year bull/bear cycle in cryptocurrencies.

However, this isn’t just about numbers; it’s about the potential for a seismic shift in how we perceive and interact with digital currencies. Get ready — this could be the beginning of a whole new era for cryptocurrency.

The rise of Bitcoin

Bitcoin’s value has surged recently, helped by the upcoming halving event in April, as well as the U.S. approval of spot Bitcoin exchange-traded funds (ETFs) and public entry of major financial institutions such as BlackRock into the space. Institutional investor interest has led to unprecedented demand, with Bitcoin hitting a new all-time high of over $73,000 on March 13. This was likely driven by record inflows into ETFs, including $1.045 billion on March 12.

This shift signals wider recognition of cryptocurrency as a legitimate asset class and the beginning of a new phase of institutional investment. It also further enhances Bitcoin’s credibility and accessibility for retail investors.

These milestones allow investors to gain exposure to Bitcoin without the complexity that comes with direct ownership. Increased liquidity and stability are likely to continue to attract a wider range of investors, drive broader mainstream adoption, and further fuel Bitcoin's current surge in valuations.

Of course, there are still bears in the market. However, with Bitcoin price predictions ranging from $150,000 to $250,000, the Bitcoin market is about to see a massive influx of institutional capital. This would signal a potential shift in its historical cycle dynamics, driving new levels of growth and innovation across multiple digital asset sectors.

Things are unpredictable, and often there are pros and cons.

Despite the clear upward momentum in the cryptocurrency market, several factors could disrupt this trajectory. Continued inflation could prompt tighter monetary policy, affecting riskier assets like cryptocurrencies. Slow economic growth could also undermine investor confidence and shift their focus away from speculative investments.

Another short-term concern is the Bitcoin mining industry. The upcoming 2024 halving event is expected to trigger major consolidation and defaults as cash-strapped miners struggle to cope with shrinking profit margins and high operating costs. This could force them to sell Bitcoin as they enter bankruptcy proceedings, curbing price gains. In addition, regulatory scrutiny and a lack of funding also pose challenges that could put downward pressure on prices.

The uncertainty surrounding the 2024 election adds another layer of unpredictability. The political outcome could lead to a variety of regulatory changes, and there could be a potential shift in the U.S. government’s stance on cryptocurrencies. While a Republican administration could provide a more favorable regulatory environment, Democrats could also become more welcoming to the industry due to alignment with values ​​such as financial inclusion and environmental sustainability. This could foster bipartisan support for cryptocurrency regulation.

Is the cryptocurrency boom/bust cycle over?

However, the unexpected secondary effects of the halving event are perhaps the most tantalizing. While halving has historically been a driver of bullish cycles, the impact of halving may be overshadowed by other factors mentioned above, such as the astonishing net inflows of ETFs, which have already exceeded $15 billion in total net inflows.

Strategic intervention by institutional and retail ETF investors, guided by financial advisors more experienced in “buying the dip,” could be an effective factor in dampening the halving-driven market move.

This means that the typical four-year bull/bear cycle of cryptocurrencies may be coming to an end, and it seems that it is no longer closely linked to the Bitcoin halving event, but is heading towards a relatively stable upward growth track, and ETF inflows will become the main catalyst for the popularity of cryptocurrencies. It is worth noting that this is the first time that the price of Bitcoin has soared before the halving, while the previous few years of Bitcoin price surges occurred after the halving.

This shift could have far-reaching consequences for the industry as a whole. Initially, the ethos of cryptocurrency was rooted in a countercultural backlash against centralized money and institutions, with the slogan “without your keys, not your coins.” Now it seems that the dominant power of cryptocurrency may soon be controlled by a few institutions, with ownership dispersed among individuals who cannot access their own keys — a departure from the original decentralized ideal.

The tilt toward institutional ownership could lead to a larger event: sovereign states holding Bitcoin. More countries could follow El Salvador’s lead, kicking off a race to accumulate cryptocurrency that could spark a global supercycle of mainstream adoption.

The change could also result in a departure from the cryptocurrency market’s traditionally violent boom-bust cycles, fostering a more stable environment for growth and development within the industry.

While fewer retail investors will experience the euphoria of a bull market, the good news is that they will also avoid the harsh reality of buying at the top and suffering huge losses when the market plummets.

This new stability could give cryptocurrency companies and projects the opportunity to focus on sustainable long-term development rather than predicting market cycles and facing extreme disadvantages during crypto winters.

As investors and enthusiasts prepare for the upcoming wild swings, it is clear that the market is on the brink of unprecedented growth and a potential fundamental paradigm shift. While this is both gratifying and a little sad, the upcoming period can be seen as cryptocurrency emerging from its infancy, marking a major evolution in its history. Before saying goodbye, we should all be ready to celebrate its "last hurrah".