Bitcoin Four-Year Cycle Now Driven by Politics Instead of Halving Event

TLDR

• Bitcoin’s four-year cycle still exists but is now driven by politics, liquidity, and US elections instead of halving events, according to 10x Research’s Markus Thielen
• Historical market peaks in 2013, 2017, and 2021 occurred in Q4, aligning more with presidential election cycles than Bitcoin halving timing
• Bitcoin struggles to gain momentum after the Federal Reserve’s latest rate cut as institutional investors remain cautious and liquidity conditions tighten
• Capital inflows into Bitcoin have slowed compared to last year, leading analysts to expect consolidation rather than a parabolic rally
• BitMEX co-founder Arthur Hayes argues the four-year cycle ended because Bitcoin has always been driven by global liquidity, not arbitrary timelines

Bitcoin’s four-year cycle continues to exist, but the driving forces behind it have changed. Markus Thielen, head of research at 10x Research, says the cycle is no longer controlled by Bitcoin’s halving events.

Speaking on The Wolf Of All Streets Podcast, Thielen explained that US election timelines, central bank policy, and capital flows now shape the cycle. The halving still happens every four years, but it no longer dictates market movements the way it once did.

Thielen pointed to Bitcoin’s historical price peaks in 2013, 2017, and 2021. All three peaks happened in the fourth quarter of their respective years. These peaks match up more closely with presidential election cycles than with halving dates.

The timing of halvings has shifted throughout the calendar over the years. This makes it harder to link them directly to market peaks. Political uncertainty around elections appears to have a stronger effect on Bitcoin prices.

Thielen noted that political factors create market uncertainty. He mentioned the possibility of Republicans losing seats in the House. This type of political change could affect how much of Trump’s agenda gets implemented.

Fed Rate Cut Fails to Lift Bitcoin

Bitcoin has struggled to gain momentum following the Federal Reserve’s most recent interest rate cut. Rate cuts typically help risk assets like Bitcoin. However, the current market environment is different.

Institutional investors now dominate the crypto market. These investors are acting more cautiously than in previous cycles. The Fed’s policy signals remain mixed, and liquidity conditions are tightening.

Capital inflows into Bitcoin have slowed when compared to last year. This reduction in capital flow removes the upward pressure needed for a strong price breakout. Without a clear increase in liquidity, Thielen expects Bitcoin to stay in a consolidation phase.

This means Bitcoin is unlikely to enter a new parabolic rally in the near term. The market needs more capital flowing in to support higher prices. Right now, that capital flow is not strong enough.

Thielen said investors should change how they think about timing. Instead of watching halving dates, they should focus on political events. US elections, fiscal policy debates, and changes in monetary conditions matter more now.

Arthur Hayes, co-founder of BitMEX, made similar comments in October. Hayes said the four-year crypto cycle is over. He argues that traders using historical timing models will likely be wrong about when the current bull market ends.

Hayes believes Bitcoin cycles have always been driven by global liquidity. Past bull markets ended when monetary conditions tightened. This happened when US dollar and Chinese yuan liquidity slowed down.

Hayes said the halving has been overstated as a cause of Bitcoin’s cycles. He views it as a coincidental factor rather than the main driver. Global liquidity conditions matter much more than the halving schedule.

The shift in what drives Bitcoin’s cycle has real implications for investors. Those who base their strategies on halving dates may miss important signals. Political events and liquidity conditions now provide better clues about where Bitcoin is headed.

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