Bitcoin’s super cycle
The cryptocurrency world is witnessing a seismic shift as bitcoin, the pioneer in digital assets, appears to be breaking free from its long-established four-year cycle in favor of a so-called “super cycle.” This departure from the norm is not just relevant—it’s potentially revolutionary.
Traditionally, bitcoin’s price movements have been closely tied to its halving events, creating a predictable pattern that investors have come to rely on. Recent developments, however, suggest that we’re entering uncharted territory. In late 2023, bitcoin’s price trajectory took an unexpected turn, surging from the $20,000 range to over $30,000. What’s remarkable is the timing—this bullish momentum coincided with anticipation of bitcoin ETF approvals, rather than the approaching halving event.
This shift isn’t merely a blip on the radar. Cryptocurrency analyst Lark Davis highlighted the unique character of this cycle, noting bitcoin’s unusually smooth upward trend and reduced volatility. The price chart, typically a rollercoaster of peaks and troughs, now bears a striking resemblance to the early stages of tech giants like Apple when they entered their “super cycle” phase. Bitcoin, or crypto at large, has previously followed the 4-year price cycle influenced by the BTC halving schedule. BTC is now increasingly trading like a financial instrument, syncing up with the global markets, and we may experience a continuous upward price trend without significant bearish markets that were mainly pre-determined by the halving schedule.
Adding fuel to this intriguing development is Metcalfe’s law—the principle that a network’s value grows exponentially with its user base. As bitcoin adoption continues to surge, as BTC hits historic 741 EH/s milestone, pushing closer to the zettahash era, we may be on the cusp of witnessing value growth that defies previous expectations. To further illustrate the significance of bitcoin’s evolving cycle, consider the comparison to gold during the 1970s when it transitioned from a fixed price to a free market asset. Like bitcoin today, gold faced skepticism and volatility but ultimately established itself as a global financial benchmark. The key drivers—rising institutional interest and political considerations—are similarly at play with bitcoin, suggesting that we could be witnessing the early stages of a comparable shift in market dynamics.
Several key factors are driving this potential paradigm shift:
- Institutional Adoption: Gone are the days when bitcoin was the playground of retail investors and tech enthusiasts. Major players like MicroStrategy and Semler Scientific are now significant stakeholders, while hedge funds increasingly view bitcoin as a critical performance differentiator.
- Political Considerations: The notion of bitcoin as a strategic reserve asset, raised by presidential candidate Donald Trump, is gaining traction in high-level discussions. Should this idea materialize, it could catapult bitcoin from “digital gold” to an essential component of global finance.
- ETF Impact: The introduction of bitcoin ETFs is reshaping the asset’s behavior, potentially diluting the impact of halving events and aligning bitcoin more closely with traditional financial assets.
While it’s premature to declare the definitive end of the four-year cycle, the evidence strongly suggests that bitcoin is entering a new phase in its market evolution. As we stand on the brink of this new era, one thing is certain: the Bitcoin story is far from over. In fact, the most exciting chapters may be yet to come.
For investors, analysts, and enthusiasts alike, the message is clear: stay alert, stay informed, and be prepared for a bitcoin market that may soon operate by a new set of rules. The game is changing, and those who adapt quickly will be best positioned to thrive in this brave new world of digital finance.
