Bitcoin’s four-year cycle has long been a key benchmark for investors, with a direct link between halving and subsequent price increases. This cycle, which relies on miners reducing their rewards every four years, has historically led to a decrease in supply and a subsequent increase in demand, pushing the price of Bitcoin to new highs. However, some industry experts, such as those at Outlier Ventures, have recently questioned the validity of this theory for the future. Here is the link to the report.
The main argument against the four-year cycle is based on the evolution of the market. Over time, Bitcoin ‘s market has matured and diversified, reducing the impact of events such as halving on price. For example, one can see how, after 2016, the effect of halving became less and less pronounced. In 2020, despite the event, the price of Bitcoin did not reach the expected peaks, leading some analysts to declare that halving had already been priced out of the market.
Another theory opposing the four-year cycle concerns the entry of new institutional investors. As interest from large funds and corporations has increased, the Bitcoin market has become more similar to that of other traditional asset classes. This means that price movements could be driven more by macroeconomic factors and less by halving supply and demand dynamics.
But is this really the case? On the other hand, there are other theories that argue the opposite, more mathematical ones, such as the PowerLaw theory also discussed in this tweet that will see the price of Bitcoin rise in 2025 to $200,000 and beyond:
🚀The Bitcoin Power Law is a fascinating model that attempts to describe Bitcoin’s price behaviour over time using mathematical principles commonly found in nature and physics.
The theory is based on the concept of a “power law,” which in this context suggests that Bitcoin’s… pic.twitter.com/QBi8zzqhKJ– Tiz Steve (We Are Blockchain “WAB”) (@Tiz_Steve) September 4, 2024
However, there is no questioning Bitcoin’s strength as a valuable asset, net of price predictions and its unique ability to decentralise.
