The traditional cycle of the four -year cryptography market, formerly closely linked to events in half Bitcoin, is no longer as predictable as in the past. According to Sandeep Nailwal, co-founder of Polygon, the cycle has changed due to the growing maturity of the cryptocurrency market and the growing involvement of institutional investors. Nailwal noted that although the events of half of Bitcoin always influence the market, their effect has become less pronounced. He explained that speculative activity has slowed down due to high interest rate and low liquidity conditions, but once these factors change, a market rebound could occur. However, it expects the market to behave more stable, the corrections being less serious than in previous cycles, where drops up to 90% were typical. Instead, he predicts that the prints will be around 30 to 40%.
While the reduction in half of Bitcoin remains an important event, its influence on the market has become less mechanical. Nailwal stressed that market corrections in the past often followed predictable models, but the current cycle is evolving due to factors such as institutional adoption and macroeconomic pressures. The increase in institutional investment has contributed to reducing the volatility of the cryptography market, also helped by new financial products like Bitcoin ETF.
These ETFs, which allow investors to expose themselves to Bitcoin without really holding cryptocurrency, also played a role in the disruption of the traditional market cycle. By limiting the capital flow to underlying assets, these products prevent funds from spinning freely in the wider cryptography ecosystem. This has changed the usual dynamics, with greater capitalization assets such as Bitcoin and Ethereum absorbing most of the capital, leaving smaller assets with less attention.
Geopolitical events and macroeconomic factors have also contributed to the changing landscape of the cryptography market. American government policies, including the executive order of President Trump to create a Bitcoin strategic reserve, have legitimized cryptographic space in the eyes of institutional investors. Consequently, the capital took place in the established assets, contributing to a concentration of wealth in Bitcoin and Ethereum. Analysts noted that Bitcoin domination has increased, now approaching 54%, a level not seen since 2021.
Despite these changes, some analysts, including Miles Deutscher, argue that the classic four -year cycle always has relevance, although it can no longer follow the same scheme. Deutscher stressed that if the market is less volatile, the typical sequence of accumulation, rise, distribution and fall becomes less predictable. He suggested that market behavior becomes more and more desynchronized, Bitcoin and Ethereum leading the charge before altcoins see significant gains. This change, combined with the broader economic environment, suggests that the cryptography market enters a new phase where older cycles may no longer be a guide so reliable for investors.
